Federal Construction and Service Contracts

Executive Orders 13658 and 14026 also establish minimum wage rates that must be paid to workers performing on or in connection with certain federal contracts. Executive Order 14026 applies to certain construction and service contracts, including contracts subject to the Davis-Bacon Act or the Service Contract Act, that were entered into, renewed, or extended on or after January 30, 2022. The minimum wage rate that generally must be paid to workers performing work on or in connection with contracts covered by Executive Order 14026 is $16.20 per hour for calendar year 2023, while the required minimum cash wage that generally must be paid to tipped employees performing work on or in connection with covered contracts is $13.75 per hour. Contracts of the same kind as are covered by Executive Order 14026 and that were entered into, renewed, or extended prior to January 30, 2022, are generally subject to Executive Order 13658. The minimum wage rate that generally must be paid to workers performing work on or in connection with contracts covered by Executive Order 13658 is $12.15 per hour for calendar year 2023, while the required minimum cash wage that generally must be paid to tipped employees performing work on or in connection with covered contracts is $8.50 per hour.

Construction

The Davis-Bacon and Related Acts (DBRA) require payment of locally prevailing wages to mechanics and laborers performing work on certain federally funded or assisted construction projects. The Davis-Bacon prevailing wage is the combination of the basic hourly wage rate and any fringe benefits listed for a specific classification of workers in the applicable Davis-Bacon wage determination. A wage determination lists wage rates determined by the by the Wage and Hour Division (WHD) to be prevailing in a specific geographic area for a certain type of construction and is required to be posted by the contractor at the site of the work in a prominent and accessible place where it can be easily seen by the workers. Davis-Bacon wage determinations are published online at Sam.gov.

If you are performing work on a federally funded or assisted construction project subject to Davis-Bacon requirements, you must pay covered workers at least the prevailing wage for work actually performed on the project. For example, if workers performed work within the electrician classification, they must be paid the prevailing wage listed on the wage determination for electricians.

Services

The Service Contract Act (SCA) applies to certain service contracts entered into by the United States or the District of Columbia. Contractors and subcontractors on such covered contracts must pay service employees performing work on the contract a minimum wage and fringe benefits, where applicable. The wage rates and fringe benefits to be paid are specified in the applicable SCA wage determination. The contractor and any subcontractor under a covered SCA contract is required to notify each service employee commencing work of the minimum monetary wage and any fringe benefits required to be paid or shall post the wage determination attached to this contract in a prominent and accessible place at the worksite. SCA wage determinations are published online at Sam.gov.

If you are performing work under an SCA covered service contract, you must pay covered workers at least the prevailing wage for the classification in which they are working.

Questions? We’re here to help.

We are committed to helping you understand your responsibilities as an employer. Many questions about your responsibilities may be answered by using the following elaws (Employment Laws Assistance for Workers and Small Businesses) Advisor:

For additional assistance, please contact the Wage and Hour Division (WHD) of the U.S. Department of Labor:

Our assistance is free and confidential.

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