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The Department of Labor Announces the Increasing of Minimum Wages for Federal Contractors
March 24, 2022
January 31, 2022, is the effective date for the federal minimum wage to be increased to $15 per hour. Below is a side-by-side comparison chart of the changes from 2015 to the 2022 update.
| Topics | Executive Order 13658 | Executive Order 14026 |
|---|---|---|
| Effective Date | On or after January 01, 2015. | On or after January 30, 2022. |
| Required Minimum Wage Rate | $11.25 for calendar year 2022. (The EO 13658 hourly minimum wage in effect from January 01, 2015 through December 31, 2015 was $10.10 ($4.90 for tipped employees). That rate has increased annually based on inflation. For calendar year 2021, the minimum wage rate is $10.95 ($7.65 for tipped employees). For calendar year 2022, the rate will be $11.25 ($7.90 for tipped employees). | $15.00 for calendar year 2022, beginning on January 30, 2022. (The EO 14026 hourly minimum wage in effect from January 30, 2022 through December 31, 2022 is $15.00 ($10.50 for tipped employees). That rate will increase annually based on inflation, beginning January 1, 2023.) |
| Coverage of "New Contracts" | If the contract was awarded on or between January 1, 2015 and January 29, 2022, and the contract is not renewed or extended on or after January 30, 2022, Executive Order 13658 generally applies to the contract. Coverage is not triggered by the unilateral exercise of a pre-negotiated option to renew or extend an existing contract by the Federal Government. | If the contract is entered into on or after January 30, 2022, or the contract is renewed or extended (pursuant to an exercised option or otherwise) on or after January 30, 2022, Executive Order 14026 generally applies to the contract. Coverage is triggered by the exercise of an option on or after January 30, 2022. |
| Coverage of Recreational Service Contracts on Federal Lands | Executive Order 13838 exempted contracts in connection with seasonal recreational services and seasonal recreational equipment rental offered for public use on Federal lands from coverage of Executive Order 13658. Executive Order 13838 is rescinded as of January 30, 2022, and such contracts will therefore generally be covered by either Executive Order 13658 or Executive Order 14026 depending on the date that the relevant contract was entered into, renewed, or extended (as well as appropriate implementing actions taken by the relevant contracting agency). | As of January 30, 2022, such contracts will be subject to the minimum wage requirements of either Executive Order 13658 or Executive Order 14026 depending on the date that the relevant contract was entered into, renewed, or extended (as well as appropriate implementing actions taken by the relevant contracting agency). |
| Minimum cash wage for tipped employees | $4.90 an hour beginning on January 1, 2015. For each subsequent year, the minimum cash wage for tipped employees has increased by the lesser of $0.95 or the amount necessary for the hourly cash wage to equal 70% of the applicable Executive Order 13658 wage for such year rounded to the nearest multiple of $0.05. For calendar year 2021, the Executive Order 13658 minimum cash wage rate for tipped employees is $7.65 per hour. For calendar year 2022, the Executive Order 13658 minimum cash wage rate for tipped employees will be $7.90. | $10.50 an hour beginning on January 30, 2022. Executive Order 14026 gradually phases out a contractor's ability to claim the tip credit for covered contract work, raising the minimum cash wage for tipped employees to 85% of the order's applicable minimum wage on January 1, 2023, rounded to the nearest multiple of $0.05, and to 100% of the order's applicable minimum wage on January 1, 2024. |
| Exclusion for independent agencies | Executive Order 13658 "strongly encouraged" but did not require independent agencies as defined in 44 U.S.C. 3502(5) to comply with its requirements. | Executive Order 14026 generally applies to independent agencies, such as the Bureau of Consumer Financial Protection, National Labor Relations Board, Office of the Comptroller of the Currency, Securities and Exchange Commission, etc. |
| New exclusion of Executive Order 14026 | Not applicable | Executive Order 14026 does not apply to contracts that result from a solicitation issued prior to January 30, 2022, and that are entered into on or between January 30, 2022 and March 30, 2022. |
| Geographical coverage | Executive Order 13658 only applies to contracts with the Federal Government requiring performance in the 50 States and the District of Columbia. | Executive Order 14026 applies to contracts with the Federal Government requiring performance in the 50 States, the District of Columbia, and specified U.S. territories, including Guam and Puerto Rico. |
Note: All areas are in force except for the “Recreational Service Contracts on Federal Land”. There is an appeal pending in the Tenth Circuit U.S. Court of Appeals.
The Department of Labor has issued a Field Assistance Bulletin (FAB) on this Executive Order. In this document, the contract types affected by this change are identified and identifies the workers that are covered by the Executive Order. The FAB further explains the notification, subcontractor, and bookkeeping requirements as well as anti-retaliation information.
For the complete Executive Order, fact sheets and other resources: https://www.dol.gov/agencies/whd/government-contracts/eo14026
This material is generic in nature. Before relying on the material in any important matter, users should note date of publication and carefully evaluate its accuracy, currency, completeness, and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances.
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The Corporate Transparency Act (CTA) which took effect on January 1, 2024 required "reporting companies" in the United States to disclose information about their beneficial owners to the Treasury Department's Financial Crimes Enforcement Network (FinCEN). In May 2024, a lawsuit was filed claiming that Congress exceeded its authority under the Constitution in passing the CTA. Background: December 3, 2024 in the Texas Top Cop Shop, Inc., et al. v. Merrick Garland, Attorney General of the United States, et al., Judge Amos Mazzant of the United States District Court (Eastern District of Texas/Sherman Division) issued a preliminary nationwide injunction barring the enforcement of the Corporate Transparency Act (CTA). December 23, 2024 the Nationwide Injunction is lifted and filing deadlines are reinstated. Financial Crimes Enforcement Network of the U.S. Department of Treasury (FinCEN) may again enforce the CTA. FinCEN has not extended any filing deadlines. Therefore, all reporting companies should file immediately any beneficial ownership information reports (BOIRs) that were already due, and reporting companies formed prior to 2024 should file their BOIRs by January 13, 2025 (extended from January 1, 2025). December 27, 2024 the federal appeals court on Thursday reinstated a nationwide injuction halting enforcement of beneficial ownership information (BOI) reporting requirements, reversing an order the same court issued earlier this week. FinCEN issued an updated alert on its BOI information page , saying that companies can voluntarily submit BOI reports. February 7, 2025 FinCEN will consider changes to the BOI reporting requirements if a court grants the government's request for a stay of a nationwide injunction in a Texas case, according to a motion filed Wednesday, February 5th. If the stay is granted, FinCEN will extend BOI filing deadlines for 30 days, the government said in its filing in Samantha Smith and Robert Means v. U.S. Department of the Treasury, No. 6:24-CV-336 (E.D. Texas 1/7/25). BOI reporting is currently voluntary, pending further legal developments. Businesses and stakeholders should stay alert for additional updates as the situation evolves. Current Status: February 18, 2025 A federal court lifted the last remaining nationwide injunction stopping BOI reporting requirements. FinCEN which enforces BOI requirements under the CTA said it would extend filing deadline for initial, updated, and/or corrected BOI reports to March 21. However, reporting companies that were previously given a deadline later than March 21 may file their initial BOI report by that later deadline. Resources for consideration: March 21 BOI reporting deadline set; further delay possible BOI Injunction Lifted FinCEN BOI Center
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