Minimum Wage for Federal Contractors Set to Increase January 1

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Beginning January 1, 2021, the applicable minimum wage rate will increase from $10.80 to $10.95 for employees working on federal contracts covered by Executive Order 13658 (the Order). Contractors working on government contracts should review their payroll records to ensure employees working on current and new contracts reflect the updated employee minimum wage requirement.

The minimum wage requirements apply to the following contractual agreements:

• Procurement contracts for construction covered by the Davis-Bacon Act (DBA);
• Service contracts covered by the Service Contract Act (SCA);
• Concessions contracts, including any concessions contract excluded from the SCA by the Department of Labor’s regulations at 29 CFR 4.133(b); and
• Contracts connected with Federal property or lands, that offer services for Federal employees, their dependents, or the general public.

The Order, Establishing a Minimum Wage for Contractors, was established back in 2014. Provisions of the Order include an annual increase to the minimum wage based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers.

The Order contains a few limited exclusions from minimum wage coverage. Those exclusions include workers employed in a bona fide executive, administrative, or professional capacity and exempt from the FLSA’s minimum wage and overtime requirements are not entitled to receive the Executive Order minimum wage.

The public can find Important information regarding the minimum wage for federal contractors and its implementing regulations here.