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Federal Contractor Minimum Wage Increase Announced – Changes Effective January 1, 2018

On September 15, 2017, the Department of Labor announced an increase in the minimum wage that certain federal contractors must pay to employees.  This comes as part of a planned incremental increase in the federal contractor minimum wage implemented by President Obama’s 2014 Executive Order (the “Order”).

As discussed in a previous blog post on the Order, the minimum wage requirement only applies to certain federal contracts.  Specifically, the Order only applies to:

  • procurement contracts for services or construction;

  • service contracts exceeding $2,500 covered by the Service Contract Act;

  • contracts for concessions; and

  • contracts that are both (a) entered into the with the Federal Government in connection with Federal property or lands and (b) covered by the Fair Labor Standards Act, Service Contract Act, or Davis-Bacon Act.

Beginning January 1, 2018, the minimum wage for covered federal contractors will increase to $10.35 per hour for hourly workers.  For tipped employees, the minimum wage for federal contractors will increase to $7.25 per hour.

© 2018 Proskauer Rose LLP.

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About this Author

Alex Weinstein, Labor Attorney, Proskauer Law Firm
Associate

Alex Weinstein is an associate in the Labor & Employment Law Department. He represents employers in all aspects of employment litigation and counseling.

Alex’s practice focuses on defending companies in both federal and state courts in various industries, including manufacturing, retail, government contracting, utilities, service companies, distribution companies and security. His litigation practice has included class actions and collective actions, general labor and employment, executive disputes, whistleblower claims, government...

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