$15 Per Hour Minimum Wage for Federal Contractors Takes EffectThe Federal Acquisition Regulatory Council recently issued an interim rule amending the Federal Acquisition Regulation (FAR) to implement Executive Order 14026 “Increasing the Minimum Wage for Federal Contractors” and a final rule issued by the Department of Labor. The Executive Order “seeks to raise the hourly minimum wage paid by contractors to workers performing work on or in connection with covered Federal contracts to $15.00 per hour beginning January 30, 2022, and beginning January 1, 2023, and annually thereafter, to an amount determined by the Secretary of Labor.”

Applicability

This interim rule applies as follows:

  1. To solicitations issued on or after January 30, 2022, and their resulting contracts.
  2. To new contracts awarded without a prior solicitation (e.g., a purchase order under FAR part 13), on or after January 30, 2022.
  3. To new contracts with a prior solicitation awarded on or after March 31, 2022.
  4. To existing contracts, including procurements for recreational services, when extending, renewing, or exercising an option on the existing contract on or after the effective date of the rule. Contracting officers are being directed to incorporate the amended clause in this rule at FAR 52.222-55, Minimum Wages for Contractor Workers Under Executive Order 14026, in the existing contracts through bilateral modifications. In such a circumstance, if the contracting officer is unable to incorporate the clause in an existing contract through bilateral modification, then the contracting officer shall decline to extend, renew, or exercise the option on the existing contract.
  5. In accordance with FAR 1.108(d), contracting officers are “strongly encouraged” to include the amended clause in other contracts awarded before March 31, 2022.

Comment Date

To be considered in the formation of the final rule, comments from interested parties are to be submitted on or before March 28, 2022.

Conclusion

If you have any questions about whether and how the new federal contractor minimum wage requirement applies to your company, please do not hesitate to contact Aron Beezley or Gabby Sprio.

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Photo of Aron C. Beezley Aron C. Beezley

Aron Beezley is the co-leader of Bradley’s Government Contracts Practice Group. Ranked nationally in Government Contracts Law by Chambers in 2019-2020, named one of the “Top Attorneys Under 40” nationwide in Government Contracts Law by Law360 in 2016-2017, and listed in Washington, D.C.

Aron Beezley is the co-leader of Bradley’s Government Contracts Practice Group. Ranked nationally in Government Contracts Law by Chambers in 2019-2020, 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 2014-2020, Aron’s vast experience includes representation of government contractors in a variety of industries and in all aspects of the government-contracting process, including negotiation, award, performance and termination.

Photo of Gabrielle A. Sprio Gabrielle A. Sprio

Gabby Sprio is an associate in Bradley’s Construction Practice Group. Her practice focuses primarily on government contracts law. Prior to law school, Gabby worked for a leading global aerospace and defense company. In this role, she gained experience in government contract administration and…

Gabby Sprio is an associate in Bradley’s Construction Practice Group. Her practice focuses primarily on government contracts law. Prior to law school, Gabby worked for a leading global aerospace and defense company. In this role, she gained experience in government contract administration and financial analysis.