DOL Proposes Rule to Enforce Federal Contractor Wage Increase

Many federal contractors would have to pay workers at least $15 an hour by 2022 under a proposed rule from the U.S. Department of Labor (DOL) that would implement and enforce a recent executive order.

In April, President Joe Biden signed Executive Order 14026, which aims to promote “economy and efficiency in federal procurement by increasing the hourly minimum wage paid by the parties that contract with the federal government to $15.00 for those workers working on or in connection with a federal government contract,” according to the White House.

The rule would also eliminate subminimum wage rates for federal contract workers with disabilities and workers who customarily receive tips.

The DOL’s proposed rule would establish procedures to implement and enforce the executive order by:

  • Increasing the minimum wage for workers performing work on covered federal contracts to $15 an hour starting on Jan. 30, 2022.
  • Continuing to index the minimum wage for federal contract workers to keep pace with inflation.
  • Eliminating the tipped minimum wage for federal contract workers by 2024.
  • Establishing a $15 minimum wage for workers with disabilities who perform work on covered contracts.
  • Restoring minimum-wage protections to outfitters and guides who operate on federal lands.

The proposed rule will be published in the Federal Register on July 22, and the DOL is seeking comments from the public until Aug. 23.