President Biden’s Aug. 27 executive order required certain federal contractors to pay workers at least $15 per hour and increased the minimum wage for tipped federal contractors to $10.50 per hour.
The new rates go into effect Jan. 30, and the U.S. Department of Labor’s Wage and Hour Division has released a field assistance bulletin that clarifies the requirements of the new standard.
What contracts are covered by the order?
The bulletin lays out four categories of contracts covered by the executive order:
- Procurement contracts for construction covered by the Davis-Bacon and Related Acts
- Service contracts covered by the Service Contract Act
- Concessions contracts
- Contracts entered with the federal government in connection with federal property or lands and related to offering services for federal employees, their dependents or the general public
Where does the order apply?
The bulletin also defines the geographic scope of the order’s application, which includes:
- All 50 states
- American Samoa
- Commonwealth of the Northern Mariana Islands
- District of Columbia
- Johnston Island
- Puerto Rico
- Virgin Islands
- Wake Island
What else does the bulletin explain that employers need to know?
Additionally, the bulletin provides information on worker notice requirements, subcontractor requirements, record-keeping requirements and anti-retaliation provisions and remedies.
The new standard under the executive order has no direct impact on minimum wage requirements for employers who are not federal contractors.
In 2022, federal contractors also will be prohibited from asking job applicants about their criminal history, with certain limited exceptions. The new measure is intended to make it easier for people with criminal records to gain employment. The “ban the box” provision of the Fair Chance Act was included in the National Defense Authorization Act of 2020, and went into effect Dec. 20, 2021. Guidance as to the new provision is expected to be issued later this month by the federal Office of Personnel Management, which will include a reporting process and penalties for violations by federal contractors.