Pillsbury Winthrop Shaw Pittman

Executive order issued on minimum wage for federal contractors and subcontractors

By Daniel S Herzfeld and Meghan D Doherty

On 12 February 2014, US president Barack Obama issued an executive order to raise the minimum wage for federal contractors and subcontractors under certain contracts, as he had foreshadowed in this year’s State of the Union. The executive order sets forth the new wage rate, when it may take effect and what contracts will be affected by this minimum wage increase.

As of 1 January 2015, the minimum wage for affected federal contracting and subcontracting personnel will be increased from $7.25 (£4.35) per hour to $10.10 per hour for new federal service and construction contracts (but not supply contracts) awarded based on solicitations issued on or after that date. (Meeting the 1 January 2015 date will be dependent on the Department of Labor and the Federal Acquisition Regulatory Council meeting the deadlines for issuing implementing regulations, as discussed below.)

Beginning 1 January 2016, and annually thereafter, the Department of Labor will increase the minimum wage using a cost-of-living adjustment (based on the Consumer Price Index for Urban Wage Earners and Clerical Workers)…

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