52.222-55
Minimum Wages for Contractor Workers Under Executive Order 14026
Contractors must pay covered workers at least the annually adjusted E.O. minimum wage, maintain records, notify workers, and ensure subcontractor compliance, or risk payment withholding and penalties.
Overview
FAR 52.222-55 implements Executive Order 14026, establishing a minimum wage for contractor workers performing on or in connection with covered federal contracts in the United States. The clause mandates a minimum hourly wage (starting at $15.00 as of January 30, 2022, with annual adjustments) for most workers, including those under the Fair Labor Standards Act (FLSA), Service Contract Labor Standards (SCLS), and Wage Rate Requirements (Construction). It details definitions, wage adjustment procedures, recordkeeping, notice, and subcontractor obligations, and prohibits retaliation against workers exercising their rights.
Key Rules
- Minimum Wage Requirement
- Contractors must pay covered workers at least the E.O. minimum wage, which is adjusted annually and published by the Department of Labor.
- Scope of Coverage
- Applies to most workers on or in connection with covered contracts, with specific exclusions (e.g., bona fide executives, certain apprentices, and workers spending less than 20% of their time on covered work).
- Annual Wage Adjustments
- Contractors must adjust wages annually based on DOL determinations and may request price adjustments for increased labor costs.
- Notice and Posting
- Contractors must notify workers of the applicable minimum wage, using DOL-provided posters or electronic postings.
- Payroll Records
- Contractors must maintain detailed payroll records for three years and make them available for inspection.
- Subcontractor Compliance
- Contractors are responsible for ensuring subcontractors comply and must flow down the clause in all applicable subcontracts.
- Anti-Retaliation
- Retaliation against workers for asserting rights under this clause is prohibited.
Responsibilities
- Contracting Officers: Ensure inclusion of the clause, monitor compliance, and withhold funds for violations.
- Contractors: Pay required minimum wage, adjust wages annually, maintain records, notify workers, ensure subcontractor compliance, and avoid retaliation.
- Agencies: Oversee enforcement, investigate complaints, and coordinate with DOL on disputes and wage determinations.
Practical Implications
- This clause ensures federal contractor workers receive a living wage and standardizes wage practices across contracts. Contractors must closely monitor DOL wage updates, maintain robust payroll systems, and ensure all subcontractors comply. Noncompliance can result in payment withholding, investigations, and liability for unpaid wages. Common pitfalls include failing to update wages annually, inadequate recordkeeping, and not properly notifying workers.