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DOL Proposes Rule to Increase Wages for Federal Contractors

On July 21, 2021, the U.S. Department of Labor (DOL) announced a Notice of Proposed Rulemaking to establish standards and procedures to implement and enforce Executive Order 14026 (EO), requiring federal contractors to increase the minimum wage rate for their employees.

The EO would increase the minimum wage rate for federal contractor employees to $15 per hour starting on January 30, 2022. Beginning January 1, 2023, and annually thereafter, the wage rate for federal contractors would be adjusted to reflect the cost of inflation.

The proposal would also increase the wages for tipped employees working for federal contractors. Under federal law, tipped employees can receive a cash wage lower than the minimum wage rate. For tipped employees working for a federal contractor, the cash wage will increase to $10.50 per hour on January 30, 2022. Beginning January 1, 2023, the cash wage for tipped employees will be 85% of the minimum wage rate for federal contractors.

Lastly, the EO includes a provision to restore minimum wage protections to outfitters and guides operating on federal lands.

The DOL invites comments from the public on the proposed rule at The comment period closes on August 23, 2021.

HR Works, headquartered in Upstate New York, is a human resource management outsourcing and consulting firm serving clients throughout the United States for over thirty years. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.