Regulation proposed by the DOL for the implementation of the federal contractor minimum wage of $ 15

As noted in our last blog post on this topic, President Biden issued Executive Order 14026 on April 27, 2021 raising the minimum wage that some federal contractors must pay to workers performing work “on or in connection with $ 15 an hour per hour. with »a federal covered or subcontracted contract. According to the decree, the Ministry of Labor (DOL) must finalize the implementing regulations by November 24, 2021.

To comply with this directive, the DOL today published a proposal for a regulation for public consultation. The Notice of Regulatory Proposal (NPRM) will be published in the Federal Register on July 22, 2021.

The bottom line? The minimum wage of $ 15 applies to the following types of contracts:

  • Construction supply contracts covered by Davis-Bacon Act, but not by Davis-Bacon Acts;

  • Contracts covered by the Service Contracts Act (“SCA”);

  • Concession contracts;

    • Concession contract means a contract under which the federal government grants a right to use federal property, including land or facilities, for the provision of services. The term concession contract includes, but is not limited to, a contract the primary purpose of which is to provide food, accommodation, motor fuel, souvenirs, newsstands and / or recreational facilities, which the services may or may not benefit the government directly. , its staff or the general public;

  • Contracts related to federal ownership and the provision of services to the general public, federal employees and their dependents;

What is not covered? The executive decree does not apply:

  • Contracts for the manufacture or supply of materials, supplies, articles or equipment to the federal government;

  • Subsidies ;

  • Contracts or agreements with Indian tribes under the Indian Self-Determination and Educational Assistance Act;

  • Contracts excluded from SCA or DBA coverage specifically excluded in implementing regulations;

  • Other contracts specifically excluded. See section 23.40 of the NPRM.

The decree applies to “new contracts” after January 30, 2022, but this term is broader than it appears. The “new contracts” include:

  • Extensions or renewals of existing contracts or instruments similar to contracts; and the exercise of options on existing contracts or instruments equivalent to contracts from January 30, 2022.

  • Thus, the federal government can unilaterally exercise an option in an “old” contract not subject to the $ 15 rate and subject the contract to the new wage requirement of $ 15.

Which workers are entitled to the $ 15 salary? The proposed regulation would require a salary of $ 15 for all workers (not just employees) who perform work covered by the contract and whose wages are already covered by the FLSA, SCA or DBA.

This means “service workers” under the SCA, construction workers under the DBA and workers whose wages are covered by the FLSA, except workers in actual executive, administrative or executive capacity. professional, as these terms are defined in the FLSA at 29 CFR Part 541, which are exempt from the minimum wage and overtime requirements of the FLSA

Only workers performing work “on or in connection with” a covered contract should be paid $ 15 per hour and only for such work performed on or in connection with the contract. The definition of “worker” offers the following guidance:

A worker performs “on” a contract if he directly performs the specific services provided for in the contract. A worker performs “in connection with” a contract if the worker’s professional activities are necessary for the performance of a contract but do not constitute the specific services provided for by the contract.

For more information on the details of the proposed regulations, please read or Client Alert, which also covers the notification and record keeping obligations of federal contractors, the implications for tipping employees, and comparisons to wage regulations. President Obama’s minimum.

Public comments regarding the proposed regulation should be submitted no later than August 21, 2021 at and by searching for Regulatory Information Number (RIN) 1235-AA41.

Jackson Lewis PC © 2021National Law Review, Volume XI, Number 202

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