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DOL Increases Federal Contractor Minimum Wage for 2016

In the latest development with the federal contractor minimum wage, the Department of Labor finalized a five-cent increase over the previous year’s rate.

As previously reported, President Obama signed Executive Order 13658 establishing a minimum wage for federal contractors in February 2014. Effective January 1, 2015, the minimum hourly wage for workers on covered contractors was $10.10 an hour. As part of the Executive Order, however, the Secretary of Labor was authorized to make annual increases based on inflation.

As a result of this latest wage review by the DOL, the minimum wage for contract workers will increase from $10.10 to $10.15 an hour, effective January 1, 2016. (The minimum wage for tipped employees will increase, as well, to $5.85 an hour.)

The federal contractors covered by Executive Order 13658 include:

  • Procurement contracts for services or construction
  • Contracts for services covered by the Service Contract Act (SCA)
  • Concessions contracts
  • Contracts entered into 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”
  • Contracts where the wages of workers are governed by the Fair Labor Standards Act (FLSA), the SCA or the Davis-Bacon Act
  • The updated wage poster, along with the new “EEO is the Law” supplement, are available as individual, new posters for federal contractors

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