Minimum Wage for Federal Contractors and Tipped Employees Increases

On February 12, 2014, President Obama signed Executive Order 13658, Establishing a Minimum Wage for Contractors, which raised the minimum hourly wage for workers working on or in connection with covered federal contracts to: 1) $10.10 per hour effective January 1, 2015; and 2) beginning January 1, 2016, and annually thereafter, an amount determined by the Secretary of Labor. On September 16, 2015, the secretary announced that, effective January 1, 2016, the new minimum will be $10.15 per hour and the tipped employee wage will be $5.85 per hour.

Executive Order (EO) 13658 applies to new contracts and replacements for expiring contracts with the federal government that result from solicitations issued on or after January 1, 2015 or to contracts that are awarded outside the solicitation process on or after January 1, 2015. Additionally, the EO applies to four major categories of contractual agreements:

  • Procurement contracts for construction covered by the Davis-Bacon Act (DBA).
  • Service contracts covered by the Service Contract Act (SCA).
  • Concessions contracts, including any concessions contract excluded from the SCA under the Department of Labor’s regulations at 29 C.F.R. § 4.133(b).
  • Contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

About Samantha Yurman, JD

Samantha Yurman is one of ThinkHR's legal editors. She is a licensed attorney in California and Florida with over 16 years of experience researching and analyzing human resources legislation and law. Samantha uses her expertise to translate highly technical legal topics into usable information for our clients.