Implementation of Executive Order 13658: With the signing of Executive Order 13658 on February 12, 2014, President Obama solidified his efforts to increase the United States’ economy and provide more opportunity for Americans. US Secretary of Labor Thomas E. Perez stated, “Raising the minimum wage for workers on federal contracts will provide a much needed boost to many who are working hard, but still struggle to get by, and it will also benefit taxpayers with improved employee retention and productivity.” This proposed increase will help pave the way for efficiency and cost effective measures aimed to benefit both federal contractors and their employees.
To implement this order, Secretary Perez submitted a proposed regulation to raise the federal minimum wage to $10.10 an hour for federal contractors. Public comments are welcome within thirty days once published in the Federal Register; please visit www.regulations.gov to submit your statements. As mentioned by the department, final rulings will be issued by October 1, 2014. If approved, federal contracts that are signed and/or modified on or after January 1, 2015 will be required to abide by Executive Order 13658.
Under the proposed rule, who is entitled to the minimum wage increase?
Contractors subject to Executive Order 13658 will be limited to contracts that are governed by the FLSA, the SCA, or the DBA. The Department’s proposed rule explains that the following categories of workers are entitled to the Executive Order minimum wage for all time spent performing on covered Federal contracts:
- Employees who are entitled to the minimum wage under FLSA section 6(a)(1), employees whose wages are calculated pursuant to special certificates issued under FLSA section 14(c),1 and tipped employees under FLSA section 3(t);
- Service employees who are entitled to prevailing wages under the SCA; and
- Laborers and mechanics that are entitled to prevailing wages under the DBA.
It is estimated that Executive Order 13658 will increase wages for 183,814 workers with an initial impact to federal contractors of approximately $100.2 million (2015) to $501 million (by 2019).
For more information:
For additional guidance about Executive Order 13658 and the proposed law to increase minimum wage, please refer to www.dol.gov/whd/flsa/nprm-eo13658/ or view the full Notice of Proposed Rulemaking (NPRM) here: www.regulations.gov/#!documentDetail;D=WHD-2014-0001-0001