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DOL Issues Final Rule Establishing Federal Contractor Minimum Wage

Posted in: Announcements, Legislative Updates

On October 1, the Department of Labor’s (DOL) Wage and Hour Division issued a final rule establishing a minimum wage of $10.10 for all federal contracted workers effective January 1, 2015. The rule applies to new contracts and renewals of expiring contracts with the federal government for construction covered by the Davis-Bacon Act (DBA). Any contract covered by the DBA and its implementing regulations is subject to the minimum wage requirement; however, contracts that are subject only to the Davis-Bacon Related Acts are exempt.

IEC members that do business with the federal government will want to become acquainted with the requirements of the new wage rule. While existing contracts will not be impacted by the change, those planning to bid on projects or expect revisions to existing contracts should consult appropriate compliance professionals and contact their local IEC chapter for information on the potential impact on apprentice wages.

IEC submitted comments in August expressing concern for the impact of the rule on the business community as well as seeking clearer definition of the pool of workers that will be covered under the new wage requirements. In particular, IEC sought clarification of the impact on registered apprentices, particularly those paid under a progressive wage scale based on the local prevailing wage rate for journeymen.

DOL’s final rule language remains unclear regarding the application of the new minimum wage rate to apprentices working on federal projects, and IEC will be working with agency staff to develop appropriate guidance for our members. As IEC requested, DOL does clarify in its final rule that Fair Labor Standards Act-covered workers performing “in connection with” covered federal contracts – such as administrative, payroll, and other support duties within a company – are excluded from coverage if they spend less than 20 percent of their work hours on responsibilities connected to such contracts.
 
For more information, contact Alexis Moch, IEC National's Vice President of Government Affairs, at (703) 650-0054 or amoch@ieci.org.