Tuesday, September 22, 2015

DOL Announces Increase in Minimum Wage Rate for Federal Contractors in 2016

Dana Halvorson

On February 12, 2014, President Obama signed Executive Order 13658, Establishing a Minimum Wage for Contractors. The Executive Order raises the hourly minimum wage paid by contractors to workers performing on covered Federal contracts to: (i) $10.10 per hour, beginning January 1, 2015; and (ii) beginning January 1, 2016, and annually thereafter, an amount determined by the Secretary of the Department of Labor (DOL) in accordance with the Order. On October 1, 2014, DOL published the final rule implementing the provisions of Executive Order 13658. According to a September 18 legal alert from Ford & Harrison LLP, DOL announced last week that the minimum wage for certain federal contracts will increase to $10.15 per hour beginning January 1, 2016. The DOL notice on this increase can be found here.

Medicare (Parts A and B) or Medicaid providers are not considered to be federal contractors. However, if a provider currently has VA patients and a VA contract, they are considered to be a federal contractor. Since VA contracts are covered by the Service Contract Act, this Executive Order applies to such contracts. AHCA continues to work with our Congressional champions on getting VA provider agreements across the finish line, and taking those with VA contracts out of the scope of being deemed a federal contractor.

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