Department of Labor Publishes Notice of Proposed Rulemaking to Implement Executive Order 13658

by FordHarrison

Executive Summary:  On February 12, 2014, President Obama signed Executive Order 13658 raising the minimum wage for the employees of some federal contractors and subcontractors to $10.10 per hour, effective January 1, 2015.  On June 17, 2014, the U.S. Department of Labor published a Notice of Proposed Rulemaking (NPRM) and proposed regulations in the Federal Register related to the Executive Order.   The Executive Order directs the Secretary of Labor to issue regulations on or before October 1, 2014.  Comments to the Notice of Proposed Rulemaking must be received on or before July 17, 2014. 

The NPRM requires that covered contractors and subcontractors pay their employees working on federal contracts or subcontracts $10.10 per hour beginning January 1, 2015.  Each year after that, the Secretary of Labor is authorized to propose higher hourly rates based on data in the Consumer Price Index for Urban Wage Earners and Clerical Workers.  Employees who receive tips of more than $30 per month must be paid $4.90 per hour effective January 1, 2015.  The Executive Order covers only contracts or solicitations for contracts that are issued on or after January 1, 2015.  In addition, it covers contracts of $2,000 or more for construction covered by the Davis-Bacon Act (DBA), and contracts of $2,500 or more that are covered by the Service Contract Act (SCA).  The DBA applies to federal contracts to construct, alter, or repair public buildings.  The SCA applies to federal contracts that furnish services through the use of service employees.  Generally speaking, service employees are individuals engaged in the performance of a contract made by the federal government the principal purpose of which is to furnish services to the United States.  The SCA does not apply to a contract for the carriage of freight or personnel by vessel, airplane, bus, truck, express, railway line or oil or gas pipeline where published tariff rates are in effect. 

One of the following conditions must exist in order to trigger coverage under Executive Order 13658:  (1) The contract must be a procurement contract for construction covered by the DBA; (2) the contract must be a contract for services covered by the SCA; (3) the contract must be a contract for concessions, including any concessions contract excluded from coverage under the SCA by Department of Labor regulations; or (4) the contract must be entered into with the federal government in connection with federal property or lands and be related to offering services for federal employees, their dependents, or the general public and the wages of workers under such contract are governed by the Fair Labor Standards Act, the SCA, or the DBA.  The Executive Order applies to contracts with the federal government requiring performance in whole or in part within the United States.  

The proposed regulations require a covered contractor to include language requiring subcontractors to comply with the Executive Order.  If the contractor pays a wage that is subject to the DBA or the SCA that is less than the new minimum wage, then the contractor must pay the new wage.  Conversely, if the contractor pays a wage that is higher than the new minimum wage, then the higher wage must be paid. 

The Executive Order imposes recordkeeping obligations.  Covered contractors and subcontractors must maintain pay records for three years that include the name, address, and social security number of each individual; the individual's pay rate; the number of daily and weekly hours worked; and any deductions made. 

Any worker, contractor, labor organization, trade organization, contracting agency, or other person or entity that believes the Executive Order has been violated may file a complaint with the Wage and Hour Division of the U.S. Department of Labor.  Remedies include orders that back wages be paid, suits for underpayment of wages, and debarment of the contractor or subcontractor from federal contracts or subcontracts for a period of up to three years.  The regulations contain an anti-retaliation provision that prohibits an employer from discharging or in any other manner retaliating against any worker because the worker filed a complaint or was involved in any proceeding under or related to the Executive Order.  Appropriate relief includes employment, reinstatement, promotion, and the payment of back wages. 

Employers' Bottom Line

Employers with federal contracts or subcontracts should review their contracts and subcontracts before January 1, 2015.  They should ascertain whether they have contracts or subcontracts that are subject to the Service Contract Act or the Davis-Bacon Act.  If so, they may have to meet the obligations imposed by Executive Order 13658. 


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.

© FordHarrison | Attorney Advertising

Written by:


FordHarrison on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.