Monday, June 30, 2014

New Minimum Wage is Here for Government Contractors

On June 25th, the GSA (General Services Administration) issued a "class deviation" to FAR that requires all Civilian Agencies (except NASA) to implement the President's minimum wage executive order effectively immediately. DoD followed suit the next day, June 26th. The class deviation applies to solicitations issued after these dates or after the date of the Executive Order (February 12, 2014), if feasible (such as where the solicitation is being otherwise amended). The class deviation also applies to subcontracts.

The new minimum wage beginning January 1, 2015 will be $10.10 per hour.

Under the class deviation, each service employee, laborer, or mechanic employed in the United States (the 50 states and the District of Columbia) in the performance of this contract by the prime Contractor or any subcontractor, regardless of any contractual relationship which may be alleged to exist between the Contractor and service employee, laborer, or mechanic, shall be paid not less than the applicable minimum wage under Executive Order 13658. The minimum wage required to be paid to each service employee, laborer, or mechanic performing work on this contract between January 1, 2015, and December 31, 2015, shall be $10.10 per hour.

That rate won't last. Contractors will be required to adjust the minimum wage each time the Secretary of Labor’s annual determination of the applicable minimum wage results in a higher minimum wage. The Secretary of Labor will publish annual determinations in the Federal Register no later than 90 days before such new wage is to take effect. The applicable published minimum wage is incorporated by reference into this contract.

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