February 4, 2015
Here’s a twist: Department of Labor Wage Determination Listings will continue to include minimum wage rates below a new presidential mandate even though Executive Order 13658 establishes that federal employees cannot be paid less than $10.10 an hour. The new Executive Order applies to employees working on federal service and construction contracts resulting from solicitations issued after January 1, 2015. President Obama signed Executive Order 13658, “Establishing a Minimum Wage for Contractors,” on February 12, 2014. The Executive Order can be found here and the final rule is here

During a January 27th meeting, the Department of Labor’s Timothy Helm, Branch Chief, Branch of Government Contracts, discussed the website confusion with members of the National Contract Management Association in Tysons Corner. His objective was to spread the word and prevent unwary contractors from inadvertently violating the law and paying covered employees wage rates below newly mandated hourly rate of $10.10. Since all employees are required to be paid at least $10.10, you might expect that the new DOL Wage Determinations would not list any wage rates below the mandatory minimum. But a check of wdol.gov shows that you’d be wrong.

Instead of listing wage rates at $10.10 per hour or above, the new DOL Wage Determinations continue to list wage rates under $10.10 per hour. An example is the SCA Wage Determination for the DMV area. It will be made applicable to solicitations issued after January 1, 2015 covered by the new Executive Order. Even though D.C. is a high-wage area, the new Wage Determination lists many hourly wage rates below $10.10, including:
  •  07260 – Waiter/Waitress 9.70
  • 16010 – Assembler 9.88
  • 16030 – Counter Attendant 9.88
  • 16070 – Finisher, Flatwork, Machine 9.88
  • 16090 – Presser, Hand 9.88
  • 16110 – Presser, Machine, Dry cleaning 9.88
  • 16130 – Presser, Machine, Shirts 9.88
  • 16160 – Presser, Machine, Wearing Apparel, Laundry 9.88
  • 28041 – Carnival Equipment Operator 8.59
  • 28043 – Carnival Equipment Worker 9.24
The only notice that a federal contractor would have not to pay these unlawful rates is a new paragraph added to the boilerplate at the beginning of the Wage Determination Listings:

Note: Executive Order (EO) 13658 establishes an hourly minimum wage of $10.10 for 2015 that applies to all contracts subject to the Service Contract Act for which the solicitation is issued on or after January 1, 2015. If this contract is covered by the EO, the contractor must pay all workers in any classification listed on this wage determination at least $10.10 (or the applicable wage rate listed on this wage determination, if it is higher) for all hours spent performing on the contract. The EO minimum wage rate will be adjusted annually. Additional information on contractor requirements and worker protections under the EO is available here.

It might help readers if this paragraph were in bold print, a larger font or a different color print. But the notice is in the same typeface as the rest of the boilerplate. The lesson here is to read the entire Wage Determination Listing and not just cut and paste the wage rates listed. 

DOL will continue to list wage rates below $10.10 because the statutes and regulations require DOL to determine prevailing wage rates. So, if the prevailing wage rate is under $10.10, DOL will continue to report the lower rate. Nonetheless, the Executive Order requires contractors to pay $10.10 even if the prevailing wage is lower. 

Is this needlessly confusing? I think it is. For years, contractors have used the wage rates listed in DOL Wage Determinations. Now they may rely on them for service contracts and construction contracts only if they are above the $10.10 hourly minimum. The key is to pay attention to the boilerplate at the beginning of the Wage Determinations Listings in order to avoid problems later on.