In July, the Department of Labor (“DOL”) announced a Notice of Proposed Rule Making to develop enforcement and implementation procedures for President Biden’s Executive Order 14026. Executive Order 14026, which was signed on April 27, 2021, requires federal contractors to pay their employees at least $15.00 per hour beginning January 30, 2022. Beginning January 1, 2023, and each year annually, the minimum wage for employees of federal contractors will increase based upon inflation. The current minimum wage for federal contractor employees is $10.95.

The minimum wage for federal contractors was last raised in January 2015 following the implementation of President Obama’s Executive Order 13658, which raised the wage to $10.10 with an annual increase based upon inflation.

The DOL’s proposed rule includes the following:

  • An anti-retaliation provision;
  • DOL procedures for addressing employee complaints, investigations, and adjudication;
  • A clause to be included in all covered contracts; and
  • A poster outlining the updated minimum wage to be posted in a conspicuous place.

The public comment period for the proposed rule closed on August 23, 2021, paving the way for finalizing the rule. The final rule is expected to be released by the DOL in November 2021. As currently written, the rule will only apply to contracts entered, renewed, or extended after January 30, 2022. Accordingly, federal contractors with current contracts may not need to implement the wage increase immediately.