Increased Minimum Wage for Federal Contractors and Subcontractors

After promising to do so during his State of the Union address, President Obama signed an Executive Order last week increasing the hourly minimum wage for individuals working on federal contracts to $10.10 beginning Jan. 1, 2015. (The Order also increased the minimum wage for tipped workers working on federal contracts.) Agencies will be required to incorporate the minimum wage into their contracts, and contractors and subcontractors will be required to incorporate language regarding this new minimum wage into their lower-tier subcontracts.

The minimum wage rate increase will apply to new contracts, contract-like instruments, and solicitations issued on or after Jan. 1, 2015. However, the Order states that "agencies are strongly encouraged to take all steps that are reasonable and legally permissible to ensure that individuals working pursuant to [new contracts and contract-like instruments negotiated between Feb. 12, 2014 and Jan. 1, 2015] are paid an hourly wage of at least $10.10." Thus, agencies may begin applying the new minimum wage requirement prior to Jan. 1, 2015.

Federal contracts that are subject to the new minimum wage requirement include procurement contracts for services or construction as well as contracts or contract-like instruments for services covered by the Service Contract Act, for concessions, or with federal property or lands related to offering services for federal employees, their dependents, or the general public. The Order does not define "contract-like instruments" but the Secretary of Labor is charged with issuing regulations by Oct. 1, 2014, that should clarify the meaning of this term and other aspects of the Order.

A copy of the Executive Order is available through the White House website here.

Section 503 Self-Identification Form and Updated FAQ's

The OFCCP has provided a new form and guidance with respect to its new contractor regulations under the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act (Section 503) which take effect March 24, 2014. Under the new regulations, contractors will be required to invite applicants to self-identify disability and protected veteran status at both the pre-offer and post-offer phases of the application process, and to invite current employees to self-identify disability status in the first year the contractor is subject to these requirements and at subsequent five-year intervals. [Click here for previous article summarizing the new regulations.] As set forth in the regulations, self-identification data must be kept confidential, and any self-identification data pertaining to disability must be maintained in an analysis file separate and apart from employee medical files.

Although the OFCCP requires that contractors include certain information in their VEVRAA self-identification invitations and has offered a sample form, it does not mandate a particular format for invitations to self-identify protected veteran status. The OFCCP does mandate that contractors use a specific format and language with respect to disability self-identification invitations under Section 503, however, and the two-page Voluntary Self-Identification of Disability form is now available on the OFCCP website: The OFCCP encourages, but does not require, contractors to provide additional information about reasonable accommodation such as contact information of the official responsible for processing requests for reasonable accommodation and information about accommodation procedures, but contractors who choose to provide such information may not alter the content of the OFCCP's form.

Contractors should not start using this new form until March 24, 2014. Although contractors with current AAP's in place as of the effective date are allowed to delay compliance with the pre-offer disability self-identification requirement and the other new AAP requirements in Subpart C of the regulations until the start of their first post-effective date AAP cycle, the OFCCP's FAQ's provide that the agency "strongly encourages" such contractors to start complying with these requirements on or as soon as practicable after March 24. The OFCCP recently updated its FAQ's again to clarify that contractors can use their existing human resources information systems and tracking systems to store the self-identification data, provided that disability-related data is stored securely and apart from other personnel information, and that access to data is limited solely to personnel who have a need to know the information for the purpose of complying with OFCCP's regulations. Additional updates to the FAQ's address the "EEO is the Law" poster, updates to the Federal Acquisition Regulation and incorporation of the equal opportunity clause in subcontracts.