Establishing a Minimum Wage for Contractors, 9849-9854 [2014-03805]

Agencies

• Executive Office of the President

[Federal Register Volume 79, Number 34 (Thursday, February 20, 2014)]
[Presidential Documents]
[Pages 9849-9854]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-03805]



[[Page 9849]]

Vol. 79

Thursday,

No. 34

February 20, 2014

Part IV





The President





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Executive Order 13658--Establishing a Minimum Wage for Contractors


                        Presidential Documents 



Federal Register / Vol. 79 , No. 34 / Thursday, February 20, 2014 / 
Presidential Documents

___________________________________________________________________

Title 3--
The President

[[Page 9851]]

                Executive Order 13658 of February 12, 2014

                
Establishing a Minimum Wage for Contractors

                By the authority vested in me as President by the 
                Constitution and the laws of the United States of 
                America, including the Federal Property and 
                Administrative Services Act, 40 U.S.C. 101 et seq., and 
                in order to promote economy and efficiency in 
                procurement by contracting with sources who adequately 
                compensate their workers, it is hereby ordered as 
                follows:

                Section 1. Policy. This order seeks to increase 
                efficiency and cost savings in the work performed by 
                parties who contract with the Federal Government by 
                increasing to $10.10 the hourly minimum wage paid by 
                those contractors. Raising the pay of low-wage workers 
                increases their morale and the productivity and quality 
                of their work, lowers turnover and its accompanying 
                costs, and reduces supervisory costs. These savings and 
                quality improvements will lead to improved economy and 
                efficiency in Government procurement.

                Sec. 2. Establishing a minimum wage for Federal 
                contractors and subcontractors. (a) Executive 
                departments and agencies (agencies) shall, to the 
                extent permitted by law, ensure that new contracts, 
                contract-like instruments, and solicitations 
                (collectively referred to as ``contracts''), as 
                described in section 7 of this order, include a clause, 
                which the contractor and any subcontractors shall 
                incorporate into lower-tier subcontracts, specifying, 
                as a condition of payment, that the minimum wage to be 
                paid to workers, including workers whose wages are 
                calculated pursuant to special certificates issued 
                under 29 U.S.C. 214(c), in the performance of the 
                contract or any subcontract thereunder, shall be at 
                least:

(i) $10.10 per hour beginning January 1, 2015; and

(ii) beginning January 1, 2016, and annually thereafter, an amount 
determined by the Secretary of Labor (Secretary). The amount shall be 
published by the Secretary at least 90 days before such new minimum wage is 
to take effect and shall be:

  (A) not less than the amount in effect on the date of such determination;

  (B) increased from such amount by the annual percentage increase in the 
Consumer Price Index for Urban Wage Earners and Clerical Workers (United 
States city average, all items, not seasonally adjusted), or its successor 
publication, as determined by the Bureau of Labor Statistics; and

  (C) rounded to the nearest multiple of $0.05.

                    (b) In calculating the annual percentage increase 
                in the Consumer Price Index for purposes of subsection 
                (a)(ii)(B) of this section, the Secretary shall compare 
                such Consumer Price Index for the most recent month, 
                quarter, or year available (as selected by the 
                Secretary prior to the first year for which a minimum 
                wage is in effect pursuant to subsection (a)(ii)(B)) 
                with the Consumer Price Index for the same month in the 
                preceding year, the same quarter in the preceding year, 
                or the preceding year, respectively.
                    (c) Nothing in this order shall excuse 
                noncompliance with any applicable Federal or State 
                prevailing wage law, or any applicable law or municipal 
                ordinance establishing a minimum wage higher than the 
                minimum wage established under this order.

                Sec. 3. Application to tipped workers. (a) For workers 
                covered by section 2 of this order who are tipped 
                employees pursuant to 29 U.S.C. 203(t),

[[Page 9852]]

                the hourly cash wage that must be paid by an employer 
                to such workers shall be at least:

(i) $4.90 an hour, beginning on January 1, 2015;

(ii) for each succeeding 1-year period until the hourly cash wage under 
this section equals 70 percent of the wage in effect under section 2 of 
this order for such period, an hourly cash wage equal to the amount 
determined under this section for the preceding year, increased by the 
lesser of:

  (A) $0.95; or

  (B) the amount necessary for the hourly cash wage under this section to 
equal 70 percent of the wage under section 2 of this order; and

(iii) for each subsequent year, 70 percent of the wage in effect under 
section 2 for such year rounded to the nearest multiple of $0.05.

                    (b) Where workers do not receive a sufficient 
                additional amount on account of tips, when combined 
                with the hourly cash wage paid by the employer, such 
                that their wages are equal to the minimum wage under 
                section 2 of this order, the cash wage paid by the 
                employer, as set forth in this section for those 
                workers, shall be increased such that their wages equal 
                the minimum wage under section 2 of this order. 
                Consistent with applicable law, if the wage required to 
                be paid under the Service Contract Act, 41 U.S.C. 6701 
                et seq., or any other applicable law or regulation is 
                higher than the wage required by section 2, the 
                employer shall pay additional cash wages sufficient to 
                meet the highest wage required to be paid.

                Sec. 4. Regulations and Implementation. (a) The 
                Secretary shall issue regulations by October 1, 2014, 
                to the extent permitted by law and consistent with the 
                requirements of the Federal Property and Administrative 
                Services Act, to implement the requirements of this 
                order, including providing exclusions from the 
                requirements set forth in this order where appropriate. 
                To the extent permitted by law, within 60 days of the 
                Secretary issuing such regulations, the Federal 
                Acquisition Regulatory Council shall issue regulations 
                in the Federal Acquisition Regulation to provide for 
                inclusion of the contract clause in Federal procurement 
                solicitations and contracts subject to this order.

                    (b) Within 60 days of the Secretary issuing 
                regulations pursuant to subsection (a) of this section, 
                agencies shall take steps, to the extent permitted by 
                law, to exercise any applicable authority to ensure 
                that contracts as described in section 7(d)(i)(C) and 
                (D) of this order, entered into after January 1, 2015, 
                consistent with the effective date of such agency 
                action, comply with the requirements set forth in 
                sections 2 and 3 of this order.
                    (c) Any regulations issued pursuant to this section 
                should, to the extent practicable and consistent with 
                section 8 of this order, incorporate existing 
                definitions, procedures, remedies, and enforcement 
                processes under the Fair Labor Standards Act, 29 U.S.C. 
                201 et seq.; the Service Contract Act, 41 U.S.C. 6701 
                et seq.; and the Davis-Bacon Act, 40 U.S.C. 3141 et 
                seq.

                Sec. 5. Enforcement. (a) The Secretary shall have the 
                authority for investigating potential violations of and 
                obtaining compliance with this order.

                    (b) This order creates no rights under the Contract 
                Disputes Act, and disputes regarding whether a 
                contractor has paid the wages prescribed by this order, 
                to the extent permitted by law, shall be disposed of 
                only as provided by the Secretary in regulations issued 
                pursuant to this order.

                Sec. 6. Severability. If any provision of this order, 
                or applying such provision to any person or 
                circumstance, is held to be invalid, the remainder of 
                this order and the application of the provisions of 
                such to any person or circumstance shall not be 
                affected thereby.

                Sec. 7. General Provisions. (a) Nothing in this order 
                shall be construed to impair or otherwise affect:

(i) the authority granted by law to an agency or the head thereof; or

[[Page 9853]]

(ii) the functions of the Director of the Office of Management and Budget 
relating to budgetary, administrative, or legislative proposals.

                    (b) This order shall be implemented consistent with 
                applicable law and subject to the availability of 
                appropriations.
                    (c) This order is not intended to, and does not, 
                create any right or benefit, substantive or procedural, 
                enforceable at law or in equity by any party against 
                the United States, its departments, agencies, or 
                entities, its officers, employees, or agents, or any 
                other person.
                    (d) This order shall apply only to a new contract 
                or contract-like instrument, as defined by the 
                Secretary in the regulations issued pursuant to section 
                4(a) of this order, if:

(i) (A) it is a procurement contract for services or construction;

  (B) it is a contract or contract-like instrument for services covered by 
the Service Contract Act;

  (C) it is a contract or contract-like instrument for concessions, 
including any concessions contract excluded by Department of Labor 
regulations at 29 C.F.R. 4.133(b); or

  (D) it is a contract or contract-like instrument entered into with the 
Federal Government in connection with Federal property or lands and related 
to offering services for Federal employees, their dependents, or the 
general public; and

(ii) the wages of workers under such contract or contract-like instrument 
are governed by the Fair Labor Standards Act, the Service Contract Act, or 
the Davis-Bacon Act.

                    (e) For contracts or contract-like instruments 
                covered by the Service Contract Act or the Davis-Bacon 
                Act, this order shall apply only to contracts or 
                contract-like instruments at the thresholds specified 
                in those statutes. For procurement contracts where 
                workers' wages are governed by the Fair Labor Standards 
                Act, this order shall apply only to contracts or 
                contract-like instruments that exceed the micro-
                purchase threshold, as defined in 41 U.S.C. 1902(a), 
                unless expressly made subject to this order pursuant to 
                regulations or actions taken under section 4 of this 
                order.
                    (f) This order shall not apply to grants; contracts 
                and agreements with and grants to Indian Tribes under 
                the Indian Self-Determination and Education Assistance 
                Act (Public Law 93-638), as amended; or any contracts 
                or contract-like instruments expressly excluded by the 
                regulations issued pursuant to section 4(a) of this 
                order.
                    (g) Independent agencies are strongly encouraged to 
                comply with the requirements of this order.

                Sec. 8. Effective Date. (a) This order is effective 
                immediately and shall apply to covered contracts where 
                the solicitation for such contract has been issued on 
                or after:

(i) January 1, 2015, consistent with the effective date for the action 
taken by the Federal Acquisition Regulatory Council pursuant to section 
4(a) of this order; or

(ii) for contracts where an agency action is taken pursuant to section 4(b) 
of this order, January 1, 2015, consistent with the effective date for such 
action.

                    (b) This order shall not apply to contracts or 
                contract-like instruments entered into pursuant to 
                solicitations issued on or before the effective date 
                for the relevant action taken pursuant to section 4 of 
                this order.

[[Page 9854]]

                    (c) For all new contracts and contract-like 
                instruments negotiated between the date of this order 
                and the effective dates set forth in this section, 
                agencies are strongly encouraged to take all steps that 
                are reasonable and legally permissible to ensure that 
                individuals working pursuant to those contracts and 
                contract-like instruments are paid an hourly wage of at 
                least $10.10 (as set forth under sections 2 and 3 of 
                this order) as of the effective dates set forth in this 
                section.
                
                
                    (Presidential Sig.)

                THE WHITE HOUSE,

                    February 12, 2014.

[FR Doc. 2014-03805
Filed 2-19-14; 11:15 am]
Billing code 3295-F4