implementing Executive Order 14026 and raising the federal contractor minimum wage to $15 per hour under most federal government contracts entered into after January 30, 2022. The Final Rule also increases the minimum wage for employees who regularly receive tips to $10.50 per hour and will eliminate the ability of contractors to take a tip credit effective January 30, 2024.
Beginning January 30, 2022, federal agencies will be required to include a contract clause imposing the increased minimum wage in the following types of government contracts:
Procurement contracts for construction covered by the Davis-Bacon Act;
Contracts for services covered by the Service Contract Act;
Concessions contracts;
Contracts with the federal government in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.
Contractors subject to the clause must flow the minimum wage requirement down to subcontractors who work on the covered contract. The clause will not be included in federal grants, certain contracts with Indian Tribes, contracts excluded from the Davis-Bacon Act or Service Contract Act, contracts performed outside the United States, and contracts for manufacturing or furnishing materials, supplies, articles, or equipment.
As in the Notice of Proposed Rulemaking preceding the Final Rule, employees are entitled to receive the increased minimum wage if they perform services “on or in connection...
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