22.1902 Policy
Source: FAR 22.1902 on acquisition.gov
Federal contractors must pay workers at least the E.O. minimum wage, updated annually, and comply with any higher applicable wage laws or agreements.
Overview
FAR 22.1902 establishes the policy for the minimum hourly wage that must be paid to workers performing on or in connection with covered federal contracts and subcontracts, as mandated by Executive Order 14026. The regulation sets a baseline minimum wage of $15.00 per hour effective January 30, 2022, with annual adjustments determined by the Secretary of Labor starting January 1, 2023. The Department of Labor (DOL) will announce new rates at least 90 days before they take effect. This policy does not override higher wage requirements established by other federal, state, or local laws, or by contract, and the highest applicable wage must be paid. Special provisions apply to tipped workers, referencing DOL regulations for further guidance.
Key Rules
- Minimum Wage Requirement
- Contractors must pay at least $15.00 per hour (as of January 30, 2022) to covered workers, with annual increases set by the Secretary of Labor from January 1, 2023 onward.
- Superseding Higher Wage Laws
- If another law, ordinance, or contract requires a higher minimum wage, contractors must pay the higher rate.
- Collective Bargaining Agreements
- The E.O. minimum wage applies if it is higher than the wage rate in any applicable collective bargaining agreement.
- Tipped Workers
- Special rules apply for tipped workers, as detailed in DOL regulations at 29 CFR 23.240(b) and 23.280.
Responsibilities
- Contracting Officers: Ensure contracts include the correct wage clauses and monitor compliance.
- Contractors: Pay at least the E.O. minimum wage or higher if required by other laws or agreements; follow special rules for tipped workers.
- Agencies: Oversee contractor compliance and respond to wage rate updates from DOL.
Practical Implications
- This policy ensures federal contract workers receive a living wage, with annual adjustments to keep pace with economic changes.
- Contractors must stay informed of annual wage updates and ensure compliance with the highest applicable wage standard.
- Failure to comply can result in contract penalties, disputes, or loss of eligibility for future contracts.
(a) Pursuant to Executive Order 14026, the minimum hourly wage rate required to be paid to workers performing on, or in connection with, contracts and subcontracts subject to this subpart is—
(1) At least $15.00 per hour beginning January 30, 2022; and
(2) Beginning January 1, 2023, and annually thereafter, an amount determined by the Secretary of Labor. The Administrator of the Wage and Hour Division (the Administrator) will notify the public of the new E.O. minimum wage rate at least 90 days before it is to take effect. (See 22.1904.)
(b) Relationship with other wage rates.
(1) Nothing in this subpart shall excuse noncompliance with any applicable Federal or State prevailing wage law or any applicable law or municipal ordinance or any applicable contract establishing a minimum wage higher than the E.O. minimum wage. However, wage increases under such other laws or municipal ordinances are not subject to price adjustment under this subpart.
(2) The E.O. minimum wage rate applies whenever it is higher than any applicable collective bargaining agreement(s) wage rate.
(c) Application to tipped workers. Policies and procedures in DOL regulations at 29 CFR 23.240(b) and 23.280 address the relationship between the E.O. minimum wage and wages of workers engaged in an occupation in which they customarily and regularly receive more than $30 a month in tips.