Unlike private sector employers, federal contractors are subject to an executive order that requires payment of a minimum wage in excess of the $7.25 federal level. In addition, that minimum adjusts annually based on cost of living increases. On September 14, the Department of Labor’s Wage and Hour Division announced the new minimum wages for federal contractors beginning January 1, 2018.
The federal minimum for these employees will increase from $10.20 to $10.35. The minimum for tipped employees performing work on federal projects will increase from $6.80 to $7.25. Many federal contractors only employ covered employees paid well in excess of these minimums. However, employers with concessions at military bases or national parks, and others with lower paid employees, should make certain that their pay levels adjust to meet these new minimum requirements.