22.1002-5 Executive Orders 13658 and 14026
Source: FAR 22.1002-5 on acquisition.gov
Contractors on covered federal contracts must pay workers at least the minimum wage set by E.O. 14026 ($15.00/hour as of January 30, 2022), with annual increases, as enforced by clause 52.222-55.
Overview
FAR 22.1002-5 addresses the implementation of Executive Orders 13658 and 14026, which establish minimum wage requirements for certain workers on federal contracts. E.O. 13658 initially set a minimum wage, which has increased annually since 2015. However, as of January 30, 2022, E.O. 14026 supersedes E.O. 13658 where inconsistent, raising the minimum wage for covered workers to $15.00 per hour, with further annual adjustments determined by the Secretary of Labor. Contractors must comply with the highest applicable minimum wage, as specified in the clause at 52.222-55. This ensures that workers on covered federal contracts receive at least the minimum wage mandated by the most current executive order or statutory wage determination, whichever is higher.
Key Rules
- Minimum Wage Requirements
- Contractors must pay covered workers at least the minimum wage set by E.O. 14026 ($15.00/hour as of January 30, 2022), subject to annual increases.
- Supersession of Prior Executive Order
- E.O. 14026 supersedes E.O. 13658 where the two are inconsistent, ensuring the higher wage prevails.
- Contract Clause 52.222-55
- Contracts must include clause 52.222-55, which enforces the E.O. 14026 minimum wage requirement.
Responsibilities
- Contracting Officers: Ensure inclusion of clause 52.222-55 in applicable contracts and monitor compliance.
- Contractors: Pay covered workers at least the applicable minimum wage and adjust pay as rates increase annually.
- Agencies: Oversee contractor compliance and update contracts as wage rates change.
Practical Implications
- This regulation ensures fair wages for workers on federal contracts and requires contractors to stay updated on annual wage adjustments. Failure to comply can result in contract penalties or loss. Contractors must monitor wage determinations and ensure payroll systems reflect the latest minimum wage requirements.
Executive Order (E.O.) 13658 established minimum wages for certain workers at $10.10 per hour. The E.O. 13658 rate has increased each year since 2015, rising to $11.25 on January 1, 2022. As of January 30, 2022, E.O. 13658 is superseded by E.O. 14026 to the extent that it is inconsistent with E.O. 14026; the minimum wage rate for certain workers is increased to $15.00 per hour. The wage rate is subject to annual increases by an amount determined by the Secretary of Labor. See subpart 22.19. The clause at 52.222-55, Minimum Wages for Contractor Workers under Executive Order 14026, requires the E.O. 14026 minimum wage rate to be paid if it is higher than other minimum wage rates, such as the subpart 22.10 statutory wage determination amount.