$15 Minimum Wage for Federal Government Contractors Starting in January 2022

Foley & Lardner LLP

Foley & Lardner LLPIf your company is a federal government contractor, be prepared to pay your employees at least $15 per hour as a minimum wage starting January 30, 2022.  (If you are unsure if you are a federal government contractor, click here, and contact legal counsel soon to make sure.)

The Biden administration issued an Executive Order on Increasing the Minimum Wage for Federal Contractors and, on July 28, 2021, issued proposed rules on the minimum wage increase.  In addition to increasing the minimum wage for federal contractors and subcontractors starting in 2022, the amount will be recalculated annually starting in January 2023, based on the Consumer Price Index.  As a reminder, if your employees work in states or cities with minimum wages higher than the federal contractor minimum wage, you will need to pay the employees at the higher amount.  Additionally, the executive order and rules eliminate the tipped minimum wage for federal contract workers by 2024 and cover federal contract workers with disabilities.

The Wage and Hour Division of the U.S. Department of Labor (DOL) will be responsible for enforcing the regulations and for investigating employee complaints.  Contractors that the division believes have disregarded their obligations to workers in violation of the executive order would be subject to debarment proceedings by DOL, which would make them ineligible to bid on any government contract for up to three years.

Some states and cities already have laws in place requiring a $15 minimum wage, or gradual implementation to that level in the coming years.  If you are a federal government contractor, you will need to make sure you are paying at this minimum wage level by next January.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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