DOL Publishes Final Rule for EO 13658 Raising Minimum Wage for Certain Federal Contractors to $10.10/hour in 2015

Today, the Department of Labor published the final rule implementing Executive Order 13658, which raises the minimum wage for certain employees of certain federal construction and service contractors to $10.10/hour with new and replacement government contracts issued after January 1, 2015.  Interestingly, the EO and final regulation exclude certain employers (including those located outside the U.S.) and employees (such as students, individuals exempt from minimum wages under the FLSA, and those who work less than 20% on covered contracts). It also does not mandate application of the rule to independent agencies, such as the FDIC: 

The Executive Order strongly encourages, but does not compel, ‘‘[i]ndependent agencies’’ to comply with its requirements. 79 FR 9853. The Department interpreted this provision, in light of the Executive Order’s broad goal of adequately  compensating workers on contracts with the Federal Government, as a narrow exemption from coverage. See 79 FR 9851. As discussed above, the proposed rule interpreted independent agencies to mean any independent regulatory agency within the meaning of 44 U.S.C. 3502(5). This interpretation is consistent with provisions in other Executive Orders. See, e.g., Executive Order 13636, 78 FR 11739 (Feb. 12, 2013); Executive Order 12861, 58 FR 48255 (Sept. 11, 1993). Thus, under the proposed rule, the Executive Order would cover executive departments and agencies but would not cover any independent regulatory agency within the meaning of 44 U.S.C. 3502(5).

Accordingly, federal contractors would be prudent to examine whether their contract fits within the coverage for this Executive Order.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.