National Association of Government Contractors

Minimum Wage Requirement Increasing

Following a notice that came earlier in the week, the rates were set to increase, the U.S. Department of Labor has verified that an increase to the minimum wage rate for contractors working on or in connection with contracts covered by Executive Order 13658.

The increases will apply to certain federal construction, service, and concession contracts.

Executive Order 13658, "Establishing a Minimum Wage for Contractors," was signed by then-President Barack Obama in 2014 and has not been rescinded by President Donald J. Trump during his first eight months in office.

Effective January 1, 2018, the hourly minimum wage rate for workers performing work on or in connection with covered contracts will increase from $10.20 to $10.35, while the hourly minimum wage rate for corresponding tipped employees will increase from $6.80 to $7.25. Covered employers must provide notice of the applicable wage rate to employees.

Under Executive Order 13658 and its implementing regulations, the U.S. Secretary of Labor reviews the rate annually to determine whether an inflation-based increase is necessary.

Now that it has been approved, this is the third increase in the minimum wage rate under the order since it first went into effect in January 2015.

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