Federal Contractor Minimum Wage to Increase Effective January 1, 2015 | Practical Law

Federal Contractor Minimum Wage to Increase Effective January 1, 2015 | Practical Law

President Obama has signed an Executive Order increasing the minimum wage for federal contractor employees to $10.10 per hour beginning January 1, 2015.

Federal Contractor Minimum Wage to Increase Effective January 1, 2015

Practical Law Legal Update 9-557-8567 (Approx. 3 pages)

Federal Contractor Minimum Wage to Increase Effective January 1, 2015

by Practical Law Labor & Employment
Published on 14 Feb 2014 • USA (National/Federal)
President Obama has signed an Executive Order increasing the minimum wage for federal contractor employees to $10.10 per hour beginning January 1, 2015.
On February 12, 2014, President Obama signed an Executive Order increasing the minimum wage for federal contractor employees to $10.10 per hour beginning January 1, 2015. The order seeks to improve economy and efficiency in government procurement by increasing worker morale and productivity and lowering turnover and supervisory costs.
The order states that the minimum wage to be paid to federal contractor workers must be at least:
  • $10.10 per hour beginning January 1, 2015.
  • Beginning January 1, 2016, and annually thereafter, an amount determined by the Secretary of Labor. The amount must be published by the Secretary at least 90 days before the new contractor minimum wage is to take effect and must be:
    • not less than the contractor minimum wage in effect on the date of determination;
    • increased from the minimum wage in effect on the date of determination by the annual percentage increase in the Consumer Price Index; and
    • rounded to the nearest multiple of $0.05.
For tipped employees, the hourly cash wage to be paid must be at least:
  • $4.90 an hour beginning January 1, 2015.
  • For each succeeding one year period until the hourly cash wage for tipped employees equals 70% of the contractor minimum wage, an hourly cash wage equal to the hourly cash wage for tipped employees for the preceding year, increased by the lesser of:
    • $0.95;
    • the amount necessary for the hourly cash wage for tipped employees to equal 70% of the contractor minimum wage; and
    • for each subsequent year, 70% of the contractor minimum wage for such year rounded to the nearest multiple of $0.05.
The Secretary of Labor will issue regulations by October 1, 2014 to implement the requirements of this Order.