On February 12, 2014, President Obama signed Executive Order 13658, entitled “Establishing a Minimum Wage for Contractors”, ordering a minimum wage increase to $10.10 for workers on federal construction and service contracts. Now, the Department of Labor has published a final rule on the matter.

The final rule clarifies that the new minimum wage applies to: (1) all contracts for construction covered by the Davis-Bacon Act (but not contracts subject only to the Davis-Bacon Related Acts); (2) both procurement and non-procurement contracts for services covered by the Service Contract Act; (3) concessions contracts where the federal government grants a right to use its property or land for providing services, such as contracts to furnish food or lodging on federal property; and (4) contracts providing services for federal employees, their dependents, or the general public on federal property or land, such as child care. The order does not apply to contracts that provide for the manufacturing or supplying of equipment, materials, articles, or supplies to the federal government.

The final rule further explains that employees performing on or in connection with covered contracts and whose wages are governed by the Fair Labor Standards Act, the Davis-Bacon Act, or the Service Contract Act are generally covered under the order. Contractors need to include the executive order contract clause in covered subcontracts and need to inform workers of the minimum wage rate.

For more information click to read the Department of Labor’s final rule on Establishing a Minimum Wage for Contractors.