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DOL to Seek Comments on Minimum Wage For Government Contracts

Posted By Shawn Hessinger On June 17, 2014 @ 3:30 pm In Management | 2 Comments

minimum wage government contracts

The Department of Labor will seek comments on a proposed rule raising minimum wage for employees of federal contractors to $10.10. The comment period is expected to extend from June 17 to July 17.

The rule change is the result of an executive order signed [1] by President Barrack Obama Feb. 12. The order gives the Department of Labor until Oct. 1 to issue regulations implementing the requirement. But the rule wouldn’t actually go into effect until Jan1, 2015.

A bill to increase the federal minimum wage [2] for all U.S. workers failed earlier this year in the Senate. But just a few months later, Seattle passed what many consider a much more drastic ordinance raising the minimum wage in the city to $15 [3].

Debate over Seattle’s minimum wage continues especially over the designation of franchises within the city limits. Particularly in contention is whether franchises qualify as a large or small business [4] which determines the amount of time they should have to implement the increase.

The new rule for federal contractors will raise wages for an estimated 200,000 workers, Bloomberg reports [5]. But it will only apply to new contracts added after Jan. 1, 2015.

The new regulation will certainly affect businesses trying to enter the federal contracting field after it is implemented. It means these businesses will need to have deeper pockets and more resources just to be considered for a federal contract.

Meanwhile, the federal government is obliged to bring in more small businesses as federal contractors. It was estimated the government shorted small businesses $3 billion in 2012 [6]. That’s because the feds managed to award only 22.25 percent of the 23 percent set aside for small businesses out of a $400 billion federal budget.

U.S. Rep. Sam Graves, Chairman of the House Small Business Committee, would like to see that discrepancy corrected. But Graves would also like to see that goal raised to 25 percent [7].

Commenting on the new federal contracting rule was officially set to begin with its publication in the Federal Register June 17. Those wishing to comment can do so online at Regulations.gov [8].

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URL to article: http://smallbiztrends.com/2014/06/minimum-wage-government-contracts.html

URLs in this post:

[1] signed: http://www.whitehouse.gov/the-press-office/2014/02/12/executive-order-minimum-wage-contractors

[2] bill to increase the federal minimum wage: http://smallbiztrends.com/2014/05/minimum-wage-bill-fails.html

[3] raising the minimum wage in the city to $15: http://smallbiztrends.com/2014/06/seattle-minimum-wage.html

[4] whether franchises qualify as a large or small business: http://smallbiztrends.com/2014/06/community-open-letter-seattle-mean-people-online.html

[5] Bloomberg reports: http://www.bna.com/dol-releases-proposed-n17179891321/

[6] shorted small businesses $3 billion in 2012: http://smallbiztrends.com/2013/07/government-shorts-small-business-federal-contracts.html

[7] would also like to see that goal raised to 25 percent: http://smallbiztrends.com/2014/03/graves-more-government-contracts-for-small-businesses.html

[8] Regulations.gov: http://www.regulations.gov/#!home