DOL Releases Proposed Rules to Implement $15 Minimum Wage for Federal Contractors

GSA
August 3, 2021
3 min read

The U.S. Department of Labor (DOL) has released a proposed regulation that is intended to implement President Joe Biden’s executive order that would initiate a $15 minimum wage for federal government contract employees. The Biden administration issued the proposed increase on July 28, 2021 with enforcement to begin on January 30, 2022.

The Wage and Hour Division of the DOL will be responsible for enforcing the regulations and for investigating employee complaints.  Contractors that the division believes have disregarded their obligations to workers in violation of the executive order would be subject to debarment proceedings by DOL, which would make them ineligible to bid on any government contract for up to three years.

The DOL projects that approximately 327,300 contract workers will be capable of seeing a raise of at least $15 an hour under this rule. The estimated cost of the proposed rule per year over 10 years including other factors would be $2.4 million per year. The quality of the government service is expected to improve when the minimum wage of the federal contract workers is raised, and according to industry analysis, implementing this rule will not have significant impact on the economy.

GSA National’s SCA experts are here to assist with any questions you may have regarding the minimum wage implementation and how it may impact your government contract. Please contact our team of government contract subject matter specialists with any questions.

GSA National 2021 Employee Benefits Strategy Intern, Dolly Amoh, contributed to this post.

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