Executive Order -- Minimum Wage for Contractors
EXECUTIVE ORDER
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ESTABLISHING A MINIMUM WAGE FOR
CONTRACTORS
By the authority vested in me as President by
the Constitution and the laws of the United States of America, including the
Federal Property and Administrative Services Act, 40 U.S.C. 101 et
seq., and in order to promote economy and efficiency in
procurement by contracting with sources who adequately compensate their workers,
it is hereby ordered as follows:
Section 1. Policy. This order seeks to increase
efficiency and cost savings in the work performed by parties who contract with
the Federal Government by increasing to $10.10 the hourly minimum wage paid by
those contractors. Raising the pay of low-wage workers increases their morale
and the productivity and quality of their work, lowers turnover and its
accompanying costs, and reduces supervisory costs. These savings and quality
improvements will lead to improved economy and efficiency in Government
procurement.
Sec. 2. Establishing a minimum wage for Federal
contractors and subcontractors. (a) Executive departments and agencies
(agencies) shall, to the extent permitted by law, ensure that new contracts,
contract-like instruments, and solicitations (collectively referred to as
"contracts"), as described in section 7 of this order, include a clause, which
the contractor and any subcontractors shall incorporate into lower-tier
subcontracts, specifying, as a condition of payment, that the minimum wage to be
paid to workers, including workers whose wages are calculated pursuant to
special certificates issued under 29 U.S.C. 214(c), in the performance of the
contract or any subcontract thereunder, shall be at least:
(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 Labor (Secretary). The
amount shall be published by the Secretary at least 90 days before such new
minimum wage is to take effect and shall be:
(A) not less than the amount in effect on the
date of such determination;
(B) increased from such amount by the annual
percentage increase in the Consumer Price Index for Urban Wage Earners and
Clerical Workers (United States city average, all items, not seasonally
adjusted), or its successor 2
publication, as determined by the Bureau of
Labor Statistics; and
(C) rounded to the nearest multiple of $0.05.
(b) In calculating the annual percentage
increase in the Consumer Price Index for purposes of subsection (a)(ii)(B) of
this section, the Secretary shall compare such Consumer Price Index for the most
recent month, quarter, or year available (as selected by the Secretary prior to
the first year for which a minimum wage is in effect pursuant to subsection
(a)(ii)(B)) with the Consumer Price Index for the same month in the preceding
year, the same quarter in the preceding year, or the preceding year,
respectively.
(c) Nothing in this order shall excuse
noncompliance with any applicable Federal or State prevailing wage law, or any
applicable law or municipal ordinance establishing a minimum wage higher than
the minimum wage established under this order.
Sec. 3. Application to tipped workers. (a) For
workers covered by section 2 of this order who are tipped employees pursuant to
29 U.S.C. 203(t), the hourly cash wage that must be paid by an employer to such
workers shall be at least:
(i) $4.90 an hour, beginning on January 1,
2015;
(ii) for each succeeding 1-year period until
the hourly cash wage under this section equals 70 percent of the wage in effect
under section 2 of this order for such period, an hourly cash wage equal to the
amount determined under this section for the preceding year, increased by the
lesser of:
(A) $0.95; or
(B) the amount necessary for the hourly cash
wage under this section to equal 70 percent of the wage under section 2 of this
order; and
(iii) for each subsequent year, 70 percent of
the wage in effect under section 2 for such year rounded to the nearest multiple
of $0.05.
(b) Where workers do not receive a sufficient
additional amount on account of tips, when combined with the hourly cash wage
paid by the employer, such that their wages are equal to the minimum wage under
section 2 of this order, the cash wage paid by the employer, as set forth in
this section for those workers, shall be increased such that their wages equal
the minimum wage under section 2 of this order. Consistent with applicable law,
if the wage required to be paid under the Service Contract Act, 41 U.S.C. 6701
et
seq., or any other applicable law or regulation is higher than
the wage required by section 2, the employer shall pay additional cash wages
sufficient to meet the highest wage required to be paid.
Sec. 4. Regulations and Implementation. (a) The
Secretary shall issue regulations by October 1, 2014, to the extent permitted by
law and consistent with the requirements of the Federal Property and
Administrative Services Act, to implement the requirements of this order,
including providing 3
exclusions from the requirements set forth in
this order where appropriate. To the extent permitted by law, within 60 days of
the Secretary issuing such regulations, the Federal Acquisition Regulatory
Council shall issue regulations in the Federal Acquisition Regulation to provide
for inclusion of the contract clause in Federal procurement solicitations and
contracts subject to this order.
(b) Within 60 days of the Secretary issuing
regulations pursuant to subsection (a) of this section, agencies shall take
steps, to the extent permitted by law, to exercise any applicable authority to
ensure that contracts as described in section 7(d)(i)(C) and (D) of this order,
entered into after January 1, 2015, consistent with the effective date of such
agency action, comply with the requirements set forth in sections 2 and 3 of
this order.
(c) Any regulations issued pursuant to this
section should, to the extent practicable and consistent with section 8 of this
order, incorporate existing definitions, procedures, remedies, and enforcement
processes under the Fair Labor Standards Act, 29 U.S.C. 201 et
seq.; the Service Contract Act, 41 U.S.C. 6701 et
seq.; and the Davis-Bacon Act, 40 U.S.C. 3141 et
seq.
Sec. 5. Enforcement. (a) The Secretary shall
have the authority for investigating potential violations of and obtaining
compliance with this order.
(b) This order creates no rights under the
Contract Disputes Act, and disputes regarding whether a contractor has paid the
wages prescribed by this order, to the extent permitted by law, shall be
disposed of only as provided by the Secretary in regulations issued pursuant to
this order.
Sec. 6. Severability. If any provision of this
order, or applying such provision to any person or circumstance, is held to be
invalid, the remainder of this order and the application of the provisions of
such to any person or circumstance shall not be affected thereby.
Sec. 7. General Provisions. (a) Nothing in this
order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an agency
or the head thereof; or
(ii) the functions of the Director of the
Office of Management and Budget relating to budgetary, administrative, or
legislative proposals.
(b) This order shall be implemented consistent
with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does
not, create any right or benefit, substantive or procedural, enforceable at law
or in equity by any party against the United States, its departments, agencies,
or entities, its officers, employees, or agents, or any other person.4
(d) This order shall apply only to a new
contract or contract-like instrument, as defined by the Secretary in the
regulations issued pursuant to section 4(a) of this order, if:
(i) (A) it is a procurement contract for
services or construction;
(B) it is a contract or contract-like
instrument for services covered by the Service Contract Act;
(C) it is a contract or contract-like
instrument for concessions, including any concessions contract excluded by
Department of Labor regulations at 29 C.F.R. 4.133(b); or
(D) it is a contract or contract-like
instrument entered into with the Federal Government in connection with Federal
property or lands and related to offering services for Federal employees, their
dependents, or the general public; and
(ii) the wages of workers under such contract
or contract-like instrument are governed by the Fair Labor Standards Act, the
Service Contract Act, or the Davis-Bacon Act.
(e) For contracts or contract-like instruments
covered by the Service Contract Act or the Davis-Bacon Act, this order shall
apply only to contracts or contract-like instruments at the thresholds specified
in those statutes. For procurement contracts where workers' wages are governed
by the Fair Labor Standards Act, this order shall apply only to contracts or
contract-like instruments that exceed the micro-purchase threshold, as defined
in 41 U.S.C. 1902(a), unless expressly made subject to this order pursuant to
regulations or actions taken under section 4 of this order.
(f) This order shall not apply to grants;
contracts and agreements with and grants to Indian Tribes under the Indian
Self-Determination and Education Assistance Act (Public Law 93-638), as amended;
or any contracts or contract-like instruments expressly excluded by the
regulations issued pursuant to section 4(a) of this order.
(g) Independent agencies are strongly
encouraged to comply with the requirements of this order.
Sec. 8. Effective Date. (a) This order is
effective immediately and shall apply to covered contracts where the
solicitation for such contract has been issued on or after:
(i) January 1, 2015, consistent with the
effective date for the action taken by the Federal Acquisition Regulatory
Council pursuant to section 4(a) of this order; or
(ii) for contracts where an agency action is
taken pursuant to section 4(b) of this order, January 1, 2015, consistent with
the effective date for such action.5
(b) This order shall not apply to contracts or
contract-like instruments entered into pursuant to solicitations issued on or
before the effective date for the relevant action taken pursuant to section 4 of
this order.
(c) For all new contracts and contract-like
instruments negotiated between the date of this order and the effective dates
set forth in this section, agencies are strongly encouraged to take all
steps that are reasonable and legally permissible to ensure that individuals
working pursuant to those contracts and contract-like instruments are paid an
hourly wage of at least $10.10 (as set forth under sections 2 and 3 of this
order) as of the effective dates set forth in this section.
BARACK OBAMA