by On September 30, 2022, the federal Department of Labor (DOL) published notice of changes to the federal contractor minimum wage rates. Effective January 1, 2023, the new minimum wage rate that must generally be paid to workers working on or in connection with federal contracts that were entered into, renewed, or extended on or after January 30, 2022 will be $16.20 per hour. This is an increase of eight percent over the current rate of $15.00 per hour. If a federal contractor has federal contracts that were not entered into, renewed, or extended on or after January 30, 2022, the federal contractor minimum wage rate will be $12.15 per hour.
Here are some resources that may help determine what rate may apply to which employees:
- For an overview of the differences between the two federal contractor minimum wages, see the September 16, 2021 post, Two Federal Contractor Minimum Wage Rates.
- To review federal government records on the start and end dates for a federal contract, check the federal website http://www.usaspending.gov. It may supplement the employer’s own contract tracking. Using the advanced search function on the site, the contractor can filter data by relevant federal fiscal year and name of recipient (i.e., the federal contractor) to get a listing of its federal contracts. The list will provide start and end dates for contracts. It is recommended that employers drill down a little further into the data by clicking on the hyperlinked contract number on the list to see if the contract was renewed or extended after its start date. Scrolling down the page of the report for the contract, you will find a history of activity on the contract. It includes renewal dates and dates when options to extend the contract were exercised by the federal agency.
- Determining which employees may be covered by the minimum wage rate can be confusing because the federal government has interpreted the phrase ‘working on or in connection’ with a federal contract in different ways for different requirements. For purposes of the federal contractor minimum wage, hourly employees who provide the services covered by the 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.
- For answers to questions about which contracts and which employees are covered, the DOL provides Frequently Asked Questions (FAQs) explaining coverage in detail. (As of the date of this posting, the DOL had not updated the FAQs to reference the new wage rates.) https://www.dol.gov/agencies/whd/government-contracts/eo14026/frequently-asked-questions
