The U.S. Department of Labor has announced an upcoming increase to the minimum wage rate for contractors working on or in connection with contracts covered by Executive Order 13658, which applies to certain federal construction, service, and concession contracts. Executive Order 13658, "Establishing a Minimum Wage for Contractors," was signed by then-President Barack Obama in 2014 and has not been rescinded by President Donald J. Trump during his first eight months in office.

Effective January 1, 2018, the hourly minimum wage rate for workers performing work on or in connection with covered contracts will increase from $10.20 to $10.35, while the hourly minimum wage rate for corresponding tipped employees will increase from $6.80 to $7.25. Covered employers must provide notice of the applicable wage rate to employees.

Under Executive Order 13658 and its implementing regulations, the U.S. Secretary of Labor reviews the rate annually to determine whether an inflation-based increase is necessary. This is the third increase in the minimum wage rate under the order since it first went into effect in January 2015.

Ballard Spahr's Labor and Employment Group routinely assists employers with issues related to federal contractor compliance.

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