22.1902
Policy
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.