U.S. Department of Labor to Raise Minimum Wage for Federal Contractors
On July 21, 2021 the Department of Labor announced a proposed rule raising the minimum wage for all federal contractors to $15 per hour. This is a “proposed rule,” and thus requires the Department to engage in the formal rulemaking process (which allows for hearings and public comment) before enacting the rule. However, the Department is acting at the direction of the President, who issued an Executive Order on April 27, 2021 directing the Department to raise the minimum wage. In light of the President’s Order, the Department’s rulemaking process is a formality, and Contractors can expect the minimum wage to be raised within the next few months.
Federal Contractors are subject to many different employment requirements, including affirmative action, veterans’ preference, prevailing wage, and EEO recordkeeping and reporting. These requirements are enforced by several different federal agencies, most notably the Office of Federal Contract Compliance Programs (commonly known as the OFCCP).
The President’s Executive Order is consistent with a long-term push by progressive organizations to enact a uniform $15 minimum wage. Several state and municipalities have already enacted that requirement, although the general federal minimum wage remains at $7.25, where it has been for more than twelve years. A consortium of labor-backed organizations, most notably the Service Employees’ Union and the AFL-CIO, have been aggressively pushing a “Fight for Fifteen” program at both the state and federal level. Most observers expect the federal minimum wage to be raised this year, although the extent of the raise is still unclear.
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