22.403-4 Executive Orders 13658 and 14026
Source: FAR 22.403-4 on acquisition.gov
Contractors on covered federal contracts must pay workers at least the current E.O. 14026 minimum wage, which supersedes prior rates and is subject to annual increases.
Overview
FAR 22.403-4 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. 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 future increases determined by the Secretary of Labor. Contractors must comply with the highest applicable minimum wage, as specified in clause 52.222-55, and refer to subpart 22.19 for further guidance. This ensures that workers on covered federal contracts receive at least the minimum wage established by the most recent Executive Order, even if it exceeds other statutory wage determinations.
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 Previous Orders
- E.O. 14026 supersedes E.O. 13658 where inconsistent, ensuring the higher wage prevails.
- Contract Clause Requirement
- The clause at 52.222-55 must be included in applicable contracts, mandating compliance with the current minimum wage.
Responsibilities
- Contracting Officers: Ensure inclusion of the correct wage clause and monitor compliance.
- Contractors: Pay the required minimum wage and adjust rates as increases are announced.
- Agencies: Oversee implementation and ensure contractors adhere to wage requirements.
Practical Implications
- This regulation ensures fair wages for workers on federal contracts and requires contractors to stay updated on annual wage increases. Failure to comply can result in contract violations, back pay obligations, or other penalties. Contractors must monitor Department of Labor announcements and adjust payroll systems accordingly.
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 As of January 30, 2022, E.O. 13658 is superseded by E.O. 14026 to the extent that it is inconsistent with E.O. 14026; the minimum wage rate for certain workers is increased to $15.00 per hour.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 22.4 statutory wage determination amount.