New Minimum Wage for Covered Government Contracts

In accordance with Executive Order 14026, the minimum wage for covered government contracts will increase to $16.20 per hour while the required minimum cash wage that generally must be paid to tipped employees under covered government contracts will increase to $13.75 per hour beginning January 1, 2023.

Covered government contracts include:

• procurement contracts for construction covered by the Davis-Bacon Act;
• service contracts covered by the Service Contract Labor Standards (SCLS, formerly SCA);
• concessions contracts, including any concessions contract excluded from the SCLS by the Department of Labor’s regulations at 29 CFR 4.133(b); and
• contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

Effective January 1, 2023, contractors must pay the impacted employees the higher of either the minimum wage rate or the minimum wage rate for the employee’s specific occupation on the wage determination incorporated into the covered contract or other wages required by the contract.

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