May 14, 2021

Volume XI, Number 134

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New Exec. Order Increases Federal Contractor Min. Wage to $15 Per Hr.

President Biden recently signed an executive order (EO) that will increase the minimum wage rate to be paid to workers performing work on or in connection with a federal contract from $10.95 per hour to $15.00 per hour beginning January 30, 2022.

The EO states that federal executive departments and agencies shall, to the extent permitted by law, ensure that contracts and contract-like instruments include a new wage clause that the contractor and any covered subcontractors shall incorporate into lower-tier subcontracts. This clause shall specify that, as a condition of payment, the minimum wage to be paid to workers employed in the performance of the contract or any covered subcontract thereunder shall be at least $15.00 per hour, beginning January 30, 2022. Then, beginning January 2, 2023, and annually thereafter, the secretary of labor shall determine whether any cost-of-living increase to the hourly rate is required.

The EO further states that the secretary shall issue implementing regulations by November 24, 2021, and that within 60 days of the secretary issuing such regulations, the Federal Acquisition Regulatory Council shall amend the Federal Acquisition Regulation to provide “for inclusion in Federal procurement solicitations, contracts, and contract-like instruments subject to this order the clause described” above.

Finally, the EO states that, where a contract or contract-like instrument is governed by the Service Contract Act or the Davis-Bacon Act, the order “shall apply only to contracts or contract-like instruments at the thresholds specified in those statutes.” For contracts covered by the Fair Labor Standards Act, that act applies when the contract value exceeds the micro-purchase threshold. Because the applicability thresholds for these acts are low — $2,500, $2,000, and $10,000, respectively — the wage rates established by these laws generally shall apply, assuming the wage rates are higher than $15.00 per hour.

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© 2021 Bradley Arant Boult Cummings LLPNational Law Review, Volume XI, Number 121
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Aron C. Beezley Government Contracts Attorney Bradley D.C.
Partner

Aron Beezley is the co-leader of Bradley’s Government Contracts Practice Group. Ranked nationally in Government Contracts Law by Chambers in 2019-2021, named one of the “Top Attorneys Under 40” nationwide in Government Contracts Law by Law360 in 2016-2017, and listed in Washington, D.C. Super Lawyers as a “Rising Star” in Government Contracts Law in 2014-2021, Aron’s vast experience includes representation of government contractors in numerous industries and in all aspects of the government-contracting process, including negotiation, award,...

202-719-8254
Patrick R. Quigley Government Investigations Attorney Bradley DC
Counsel

Patrick Quigley’s practice is focused on litigating bid protests, contract claims, prime/subcontractor disputes, and small business size protests/appeals at the Government Accountability Office, U.S. Court of Federal Claims, boards of contract appeals, federal agencies, the Small Business Administration, and state courts. He conducts internal investigations and defends clients in False Claims Act litigation, government investigations, and suspension and debarment actions.

Patrick conducts due diligence reviews of and advises on the government-...

202-719-8279
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