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Question: Please provide information regarding the new minimum wage just announced by the White House and to whom it applies.

Answer: Here is the basic information as outlined in the President’s Executive Order announced February 12, 2014 and the White House Fact Sheet (both links are available below if you need more information):

  • The minimum wage for federal contract workers increases to $10.10 per hour, effective for new contracts (and replacements for expiring contracts) beginning January 1, 2015. Future increases beginning January 1, 2016 will be determined by the Secretary of Labor using the Consumer Price index.
  • For tipped federal contract workers, the new minimum base wage is $4.90 per hour for new contracts and replacements for expiring contracts put out for bid after January 1, 2015.  That amount increases by 95 cents per year until it reaches 70% of the regular minimum wage, and if a worker’s tips do not add up to at least $10.10, the employer will be required to pay the difference.
  • Individuals with disabilities working under service or concessions contracts with the federal government will be covered by the same $10.10 per hour minimum wage. (Under current law, workers whose productivity is affected because of their disabilities may be paid less than the wage paid to others doing the same job under certain specialized certificate programs).

This new law applies to all federal contractors.  Generally speaking, any business or organization that (1) holds a single Federal contract, subcontract, or Federally assisted construction contract in excess of $10,000.00; (2) has Federal contracts or subcontracts that combined total in excess of $10,000.00 in any 12-month period; or (3) holds Government bills of lading, serves as a depository of Federal funds, or is an issuing and paying agent for U.S. savings bonds and notes in any amount will be subject to requirements under one or more of the laws enforced by OFCCP. [41 CFR Sec. 60-1.5(a), 41 CFR Sec. 60-250.4, and 41 CFR Sec. 60-741.4].

If you are not sure whether your business or organization would qualify as a Federal contractor or subcontractor, the DOL has a “test” available at http://www.dol.gov/elaws/esa/ofccp/determine.asp to help you make that designation.

For more information about the new 2015 minimum wage for federal contractors: