Federal Contractor Minimum Wage Rises to $10.15

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The Wage and Hour Division of the U.S. Department of Labor published in the Federal Register earlier this week its official Notice regarding an increased minimum wage for employees of federal contractors to $10.15, which is a nickel increase from the $10.10 minimum wage established by President Obama’s Executive Order 13658 on February 12, 2014.

Executive Order 13658 established a minimum wage for certain employees of covered federal contractors of $10.10 per hour beginning on January 1, 2015, and a minimum cash wage for tipped employees working on or in connection with covered federal contracts of $4.90 per hour.  Each following year the minimum wage for employees working on or in connection with covered federal contracts will be determined by the Secretary of Labor and take account of inflationary factors.  The Notice published earlier this week sets that minimum wage beginning January 1, 2016 at $10.15 per hour. The minimum cash wage for tipped employees must be raised to $5.85 per hour on January 1, 2016. 

The Notice, which is only three pages, explains briefly DOL’s calculations for these new minimum wages.  While the Consumer Price Index used by DOL to adjust for inflation was only 0.345%, the minimum wage is being raised by a nickel since the Executive Order and implementing regulations require the amount to be rounded up to the nearest $0.05.  The $0.95 raise in the tipped employee cash wage also comes directly from requirements in the Executive Order.

A copy of the poster for notifying employees of the new minimum wage is available here.

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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