by On September 30, 2024, the U.S. Department of Labor (DOL) announced the 2025 minimum wage rate for employees working on or in connection with specific federal contracts signed, renewed, or extended on or after January 2022. Effective January 1, 2025, covered employees must be paid at least $17.75 per hour. https://www.dol.gov/agencies/whd/government-contracts/eo14026.
For purposes of the federal contractor minimum wage, hourly employees who provide the services covered by a covered contract are considered ‘working on’ the contract, and every minute worked on the contract must be at the federal contractor minimum wage or higher. Employees who provide support for the employees working on federal contracts are considered ‘working in connection with’ a federal contract, and their hours are only required to be paid at the federal contractor minimum wage or higher if they provide support for federal contracts 20 percent or more of their hours worked in a workweek.
Contracts subject to the minimum wage increase include:
- Service contracts;
- Contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public;
- Procurement contracts covered by the Davis Bacon Act; and
- Concession contracts.
For more information on the contracts covered by the wage increase, see the DOL’s FAQs: https://www.dol.gov/agencies/whd/government-contracts/eo14026/frequently-asked-questions.
Our September 30, 2022, posting, Federal Contractor Minimum Wage Rate Increases Effective January 1, 2023, details additional resources to assist employers in determining if they have a covered contract and, if so, what minimum wage rate is required.
