An Executive Order, signed by President Obama in February, directed the U.S. Department of Labor (DOL) to develop guidelines to increase the minimum wage for federal contractors. On June 12, the DOL, in conjunction with the White House, released its proposed rule that raises the minimum wage for workers on federal service and construction contracts to $10.10 per hour.
The 181-page proposed rule (found here as published in the Federal Register) would increase wages for nearly 200,000 workers, according to an economic analysis included in the proposal.
The Executive Order applies to new and renegotiated federal contracts starting January 1, 2015.
The proposed rule would apply to all construction contracts covered by the Davis-Bacon Act; service contracts covered by the Service Contract Act; concessions contracts, such as contracts to furnish food and lodging on federal property; and contracts to provide services, such as child care or dry cleaning, in federal buildings. Tipped employees of government contractors and their subcontractors would also receive a raise under the proposed rule.
The DOL’s Wage and Hour Division will be responsible for enforcing the proposed rule. The proposed rule contains a mechanism for investigations and informal complaint resolution as well as remedies for violations, including the payment of back wages and debarment as well as an anti-retaliation provision to protect whistle blowers or complainants.