On Oct. 7, the U.S. Department of Labor (DOL) Wage and Hour Division issued a final rule to implement Executive Order 13658, which would establish an hourly minimum wage of $10.10 for workers on covered federal construction and service contracts.  

The final rule applies to new contracts and replacements for expiring contracts with the federal government that result from solicitations issued on or after Jan. 1, 2015, or to contracts that are awarded outside the solicitation process on or after Jan. 1, 2015. Beginning Jan. 1, 2016, the minimum wage will be determined annually by the Secretary of Labor (but will not be less than the amount in effect on the date of such determination). 

DOL resources on the final rule:

• Fact Sheet
• FAQs

DOL’s proposed rule was issued on June 17 and ABC submitted comments arguing that the proposal should be withdrawn or substantially modified.  

ABC pointed out that most of its government contractor members already pay the substantial majority of their employees at wage rates higher than the newly proposed minimum wage of $10.10 per hour, as required by the Davis-Bacon Act and, to a lesser extent, the Service Contract Act (SCA). 

The primary concern expressed by ABC in the comments was not the wage rate itself, but rather the unlawful and unprecedented arrogation of power by the executive branch to set a new minimum wage in direct contravention of the above-referenced acts of Congress (DBA and SCA). 

ABC also pointed out that this rule will cause great confusion among government contractors and will needlessly increase the regulatory burden on contractors in the construction industry.

More information about the minimum wage increase can be found on DOL’s website.