On January 13, the U.S. Department of Labor’s Wage and Hour Division published Field Assistance Bulletin (FAB) No. 2022-1 clarifying the requirements of Executive Order (EO) 14026 that increases the hourly minimum wage for certain federal contractors to $15 ($10.50 for tipped workers) effective January 30, 2022. The FAB is intended to help federal contractors understand and implement the new minimum wage.
What Is a FAB?
Field Assistance Bulletins provide Wage and Hour Division (WHD) investigators and staff with guidance on enforcement positions which provide clarifications in the administration of these laws and related regulations based upon court decisions, legislative changes, and opinions of the WHD Administrator.
Key Highlights of the FAB
The FAB identifies four categories of contracts covered by the EO:
- Procurement contracts for construction covered by the Davis-Bacon Act (DBA);
- Service contracts covered by the Service Contract Act (SCA);
- Concessions contracts; and,
- Contracts entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.
It also defines the geographic scope of the EO’s application as including the 50 state, the District of Columbia as well as in Puerto Rico, the Virgin Islands, Outer Continental Shelf lands as defined in the Outer Continental Shelf Lands Act, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, Wake Island, and Johnston Island.
The FAB further identifies workers covered by the EO as:
- Workers whose wages under the contract are governed by the FLSA, SCA, or DBA
- Workers employed on or in connection with a covered contract
The FAB explains the increased minimum wage requirement for all contract workers and clarifies changes to minimum wage requirements for contract workers in tipped occupations and workers with disabilities employed on covered contracts under Section 14(c) of the Fair Labor Standards Act.
Additionally, the FAB provides information on worker notice requirements, subcontractor requirements, recordkeeping requirements, and anti-retaliation provisions and remedies.
Next Steps for Employers
Federal contractors should ensure that any subcontractors they engage also agree that the minimum wage paid to workers employed in the performance of the subcontract will be at least $15 per hour.
Employers with tipped workers must ensure that tipped employees receive compensation that is at least equal to the minimum wage rate. This may require increasing a tipped employee’s cash wage so that the employee’s cash wage and tips, when combined, are at least equal to the minimum wage rate.
Employers covered by EO 14026 are encouraged to review the FAB as it provides key insight on the EO’s employee notice, recordkeeping, and anti-retaliation requirements and how the DOL will approached enforcement issues which can ensure that employers are in full compliance.