Minimum Wages
Under Executive Order 13658
You need to be aware of the new
minimum wage requirements of FAR 52.222-55. This clause applies when it is
included in a contract or modification by the agency as directed by FAR
22.1906. If the agency fails to include it there is a provision for retroactive
application of the clause. FAR 22.1905(d)(4).
FAR 52.222-55 applies to almost
all prime contractors and subcontractors working under “new” federal contracts
after 1/1/15. The minimum wage is generally not retroactive to “old” contracts.
However, it appears that the government views a bilateral modification
extending a contract more than 6 months to be a new contact. Likewise, the
government may also apply the clause to IDIQ contracts with more than 6 months
of task or delivery orders remaining.
If you believe that the agency
improperly included the clause you may ask the agency to remove it, but if
included you must comply with it.
If FAR 52.222-55 is included you
must flow it down to subcontractors at every tier, and if added after award by
modification you should take steps to obtain an equitable adjustment for you
and your subcontractors. You should not sign a modification that waives your
right to an adjustment.
The minimum wage applies to all
contractor employees that spend more than 20% of their weekly hours working in
“connection” with a federal contract, and regardless of the contractual
relationship. Therefore, it may apply to someone in general administration or a
1099 independent contractor.
The minimum wage takes
precedence over lower rates in wage determinations, collective bargaining
agreements or apprentice programs. You cannot make up short wages with fringe
or other benefits.
You must notify all workers of
the requirements of the clause.
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