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Important Update on FAS’s Implementation of E.O.14026, Increasing the Minimum Wage for Federal Contractors

In April 2021, President Biden issued Executive Order (EO) 14026, Increasing the Minimum Wage for Federal Contractors, to promote economy and efficiency in Federal procurement by raising the hourly minimum wage paid by contractors to workers performing work on or in connection with covered Federal contracts to $15.00 per hour, effective January 30, 2022; the EO also provides for annual increases to be set by the Department of Labor beginning in January 2023. 

 

DoD, GSA, and NASA recently issued an interim rule amending the Federal Acquisition Regulation (FAR) to implement EO 14026 and a final rule issued by the Department of Labor. 

 

The interim FAR rule prescribes a revised clause (52.222-55), Minimum Wages for Contractor Workers, under Executive Order 14026, for applicable solicitations and contracts. The clause requires contractors to pay the EO 14026 minimum wage rate if it is higher than other minimum wage rates, e.g. the FAR subpart 22.10 statutory wage determination amount.

 

Effective January 30, 2022, FAS acquisition activities should determine which contracts are applicable to the interim FAR rule and modify contracts to include FAR clause 52.222-55, accordingly. The rule will apply to covered contracts as follows:

 

  • New contracts issued on or after January 30, 2022
  • Options issued on or after January 30, 2022 on existing contracts
  • For Federal Supply Schedule (FSS) contracts, FAS anticipates that the revised clause will be incorporated into the solicitation and existing contracts through a MAS Solicitation Refresh in April 2022. Additional information regarding the Solicitation Refresh will follow in the coming months.  

Questions?

Please refer to the interim FAR rule for detailed information on applicability and email us any comments or questions at opcpolicymailbox@gsa.gov

 

As always, we thank you for your continued partnership.

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