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Federal Contractors Face Imminent Minimum Wage Increase and Mandatory COVID-19 Safety Protocols

By Jackson W. Moore, Susan M. Parrott and Grace A. Gregson with Smith Anderson Law

Federal Minimum Wage Increases to $15 on January 30, 2022

Federal prime contractors and subcontractors should prepare to pay a higher mandatory minimum wage starting January 30, 2022. On July 22, 2021, the federal Department of Labor (“DOL”) published a proposed rule to establish standards and procedures implementing President Biden’s Executive Order 14026, “Increasing the Minimum Wage for Federal Contractors” (“Executive Order”). The DOL is accepting comments to the proposed rule through August 27, 2021. Pursuant to the Executive Order, the new regulations must be issued by November 24, 2021.

Under the regulations set forth in the proposed rule, the initial minimum wage will be $15 per hour, with further increases indexed for inflation starting in 2023. The regulations will apply to employees performing specific services provided in connection with a federal government contract or subcontract and to employees performing other duties necessary to the performance of that contract or subcontract. Contractors must pay a higher wage if required by state or other local laws.

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