Establishing a Minimum Wage for Contractors, Notice of Rate Change in Effect as of January 1, 2017, 64513-64517 [2016-22515]
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Federal Register / Vol. 81, No. 182 / Tuesday, September 20, 2016 / Notices
If additional information is required
contact: Jerri Murray, Department
Clearance Officer, United States
Department of Justice, Justice
Management Division, Policy and
Planning Staff, Two Constitution
Square, 145 N Street NE., Room
3E.405B, Washington, DC 20530.
Dated: September 15, 2016.
Jerri Murray,
Department Clearance Officer for PRA, U.S.
Department of Justice.
[FR Doc. 2016–22549 Filed 9–19–16; 8:45 am]
BILLING CODE 4410–13–P
DEPARTMENT OF LABOR
Office of the Secretary
Establishing a Minimum Wage for
Contractors, Notice of Rate Change in
Effect as of January 1, 2017
Wage and Hour Division,
Department of Labor.
ACTION: Notice.
AGENCY:
The Wage and Hour Division
(WHD) of the U.S. Department of Labor
(the Department) is issuing this notice to
announce the applicable minimum
wage rate to be paid to workers
performing work on or in connection
with Federal contracts covered by
Executive Order 13658, beginning
January 1, 2017.
Executive Order 13658, Establishing a
Minimum Wage for Contractors (the
Executive Order or the Order), was
signed by President Barack Obama on
February 12, 2014, and raised the hourly
minimum wage paid by contractors to
workers performing work on covered
Federal contracts to: $10.10 per hour,
beginning January 1, 2015; and
beginning January 1, 2016, and annually
thereafter, an amount determined by the
Secretary of Labor (the Secretary) in
accordance with the methodology set
forth in the Order. See 79 FR 9851. The
Secretary’s determination of the
Executive Order minimum wage rate
also affects the minimum hourly cash
wage that must be paid to tipped
employees performing work on or in
connection with covered contracts. See
79 FR 9851–52. The Secretary is
required to provide notice to the public
of the new minimum wage rate at least
90 days before such rate is to take effect.
See 79 FR 9851. The applicable
minimum wage under Executive Order
13658 is currently $10.15 per hour, in
effect since January 1, 2016. See 80 FR
55646. The applicable minimum cash
wage that generally must be paid to
tipped employees performing work on
or in connection with covered contracts
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is currently $5.85 per hour, in effect
since January 1, 2016. Id.
Pursuant to Executive Order 13658
and its implementing regulations at 29
CFR part 10, notice is hereby given that
beginning January 1, 2017, the
Executive Order minimum wage rate
that generally must be paid to workers
performing work on or in connection
with covered contracts will increase to
$10.20 per hour. Notice is also hereby
given that, beginning January 1, 2017,
the required minimum cash wage that
generally must be paid to tipped
employees performing work on or in
connection with covered contracts will
increase to $6.80 per hour.
DATES: This notice is effective on
September 20, 2016.
FOR FURTHER INFORMATION CONTACT:
Robert Waterman, Division of
Regulations, Legislation, and
Interpretation, Wage and Hour Division,
U.S. Department of Labor, Room S–
3502, 200 Constitution Avenue NW.,
Washington, DC 20210; telephone: (202)
693–0406 (this is not a toll-free
number). Copies of this notice may be
obtained in alternative formats (Large
Print, Braille, Audio Tape, or Disc),
upon request, by calling (202) 693–0023
(not a toll-free number). TTY/TTD
callers may dial toll-free (877) 889–5627
to obtain information or request
materials in alternative formats.
SUPPLEMENTARY INFORMATION:
I. Executive Order 13658 Background
and Requirements for Determining
Annual Increases to the Minimum
Wage Rate
Executive Order 13658 was signed by
President Barack Obama on February
12, 2014, and raised the hourly
minimum wage paid by contractors to
workers performing work on or in
connection with covered Federal
contracts to $10.10 per hour, beginning
January 1, 2015; and beginning January
1, 2016, and annually thereafter, an
amount determined by the Secretary
pursuant to the Order. See 79 FR 9851.
The Executive Order directed the
Secretary to issue regulations to
implement the Order’s requirements.
See 79 FR 9852. Accordingly, after
engaging in notice-and-comment
rulemaking, the Department published a
Final Rule on October 7, 2014 to
implement the Executive Order. See 79
FR 60634. The final regulations, set
forth at 29 CFR part 10, established
standards and procedures for
implementing and enforcing the
minimum wage protections of the
Order.
The Executive Order and its
implementing regulations require the
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64513
Secretary to determine the applicable
minimum wage rate to be paid to
workers performing work on or in
connection with covered contracts on an
annual basis, beginning January 1, 2016.
See 79 FR 9851; 29 CFR 10.1(a)(2),
10.5(a)(2), 10.12(a). Sections 2(a) and (b)
of the Order establish the methodology
that the Secretary must use to determine
the annual inflation-based increases to
the minimum wage rate. See 79 FR
9851. These provisions, which are
implemented in 29 CFR 10.5(b), explain
that the applicable minimum wage
determined by the Secretary for each
calendar year shall be:
(i) Not less than the amount in effect
on the date of such determination;
(ii) Increased from such amount by
the annual percentage increase in the
Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI–W)
(United States city average, all items,
not seasonally adjusted), or its successor
publication, as determined by the
Bureau of Labor Statistics (BLS); and
(iii) Rounded to the nearest multiple
of $0.05.
Section 2(b) of the Executive Order
further provides that, in calculating the
annual percentage increase in the CPI–
W for purposes of determining the new
minimum wage rate, the Secretary shall
compare such CPI–W 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) with the CPI–W for the same
month in the preceding year, the same
quarter in the preceding year, or the
preceding year, respectively. See 79 FR
9851. In order to calculate the annual
percentage increase in the CPI–W, the
Department elected in its Final Rule
implementing the Executive Order to
compare such CPI–W for the most
recent year available with the CPI–W for
the preceding year. See 29 CFR
10.5(b)(2)(iii). In its Final Rule, the
Department explained that it decided to
compare the CPI–W for the most recent
year available (instead of using the most
recent month or quarter, as allowed by
the Order) with the CPI–W for the
preceding year, in order ‘‘to minimize
the impact of seasonal fluctuations on
the Executive Order minimum wage
rate.’’ 79 FR 60666.
Once a determination has been made
with respect to the new minimum wage
rate to be paid to workers performing
work on or in connection with covered
contracts, the Executive Order and its
implementing regulations require the
Secretary to notify the public of the
applicable minimum wage rate on an
annual basis at least 90 days before any
new minimum wage is to take effect.
See 79 FR 9851; 29 CFR 10.5(a)(2),
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10.12(c)(1). The regulations explain that
the Administrator of the Department’s
Wage and Hour Division (the
Administrator) will publish an annual
notice in the Federal Register stating
the applicable minimum wage rate at
least 90 days before any new minimum
wage is to take effect. See 29 CFR
10.12(c)(2)(i). Additionally, the
regulations state that the Administrator
will provide notice of the Executive
Order minimum wage rate on Wage
Determinations OnLine (WDOL), https://
www.wdol.gov, or any successor site; on
all wage determinations issued under
the Davis-Bacon Act (DBA), 40 U.S.C.
3141 et seq., and the Service Contract
Act (SCA), 41 U.S.C. 6701 et seq.; and
by other means the Administrator
deems appropriate. See 29 CFR
10.12(c)(2)(ii)–(iv).
Section 3 of the Executive Order
requires contractors to pay tipped
employees covered by the Order
performing on or in connection with
covered contracts an hourly cash wage
of at least $4.90, beginning on January
1, 2015, provided the employees receive
sufficient tips to equal the Executive
Order minimum wage rate under section
2 of the Order when combined with the
cash wage. See 79 FR 9851–52; 29 CFR
10.28(a). The Order further provides
that, in each succeeding year, beginning
January 1, 2016, the required cash wage
must increase by $0.95 (or a lesser
amount if necessary) until it reaches 70
percent of the Executive Order
minimum wage. Id. For subsequent
years, the cash wage for tipped
employees will be 70 percent of the
Executive Order minimum wage
rounded to the nearest $0.05. Id. At all
times, the amount of tips received by
the employee must equal at least the
difference between the cash wage paid
and the Executive Order minimum
wage; if the employee does not receive
sufficient tips, the contractor must
increase the cash wage paid so that the
cash wage in combination with the tips
received equals the Executive Order
minimum wage. Id.
On September 16, 2015, the
Administrator published a notice in the
Federal Register informing the public
that, effective January 1, 2016, the
Executive Order minimum wage and the
minimum cash wage required to be paid
to tipped employees covered by the
Executive Order would be $10.15 and
$5.85 per hour, respectively. See 80 FR
55646.
II. The 2017 Executive Order Minimum
Wage Rate
In accordance with the methodology
set forth in the Executive Order and
summarized above, the Department
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must first determine the annual
percentage increase in the CPI–W
(United States city average, all items,
not seasonally adjusted) as published by
BLS in order to determine the new
Executive Order minimum wage rate. In
calculating the annual percentage
increase in the CPI, the Department
must compare the CPI–W for the most
recent year available with the CPI–W for
the preceding year. The Department
therefore compares the percentage
change in the CPI–W between the most
recent year (i.e., the most recent four
quarters) and the prior year (i.e., the four
quarters preceding the most recent
year). The current Executive Order
minimum wage rate must then be
increased by the resulting annual
percentage change and rounded to the
nearest multiple of $0.05.
In order to determine the Executive
Order minimum wage rate beginning
January 1, 2017, the Department
therefore calculated the CPI–W for the
most recent year by averaging the CPI–
W for the four most recent quarters,
which consist of the first two quarters
of 2016 and the last two quarters of 2015
(i.e., July 2015 through June 2016). The
Department then compared that data to
the average CPI–W for the preceding
year, which consists of the first two
quarters of 2015 and the last two
quarters of 2014 (i.e., July 2014 through
June 2015). Based on this methodology,
the Department determined that the
annual percentage increase in the CPI–
W (United States city average, all items,
not seasonally adjusted) was 0.278%.
The Department then applied that
annual percentage increase of 0.278% to
the current Executive Order hourly
minimum wage rate of $10.15, which
resulted in a wage rate of $10.18
(($10.15 × .00278) + $10.15); however,
pursuant to the Executive Order, that
rate must be rounded to the nearest
multiple of $0.05.
The new Executive Order minimum
wage rate that must generally be paid to
workers performing on or in connection
with covered contracts beginning
January 1, 2017 is therefore $10.20 per
hour.
III. The 2017 Executive Order
Minimum Cash Wage for Tipped
Employees
As noted above, section 3 of the
Executive Order requires contractors to
pay tipped employees covered by the
Order performing on or in connection
with covered contracts an hourly cash
wage of at least $4.90, beginning January
1, 2015, provided the employees receive
sufficient tips to equal the Executive
Order minimum wage rate under section
2 of the Order when combined with the
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cash wage. See 79 FR 9851–52; 29 CFR
10.28(a). Section 3 of the Executive
Order also provides a methodology to be
utilized each year in determining the
amount of the minimum hourly cash
wage that must be paid to tipped
employees performing on or in
connection with covered contracts.
Pursuant to the Order, in each
succeeding year, beginning January 1,
2016, the required cash wage increases
by $0.95 (or a lesser amount if
necessary) until it reaches 70 percent of
the Executive Order minimum wage
rate. For subsequent years, the cash
wage for tipped employees will be 70
percent of the Executive Order
minimum wage rate rounded to the
nearest $0.05.
In order to determine the minimum
hourly cash wage that must be paid to
tipped employees performing on or in
connection with covered contracts
beginning January 1, 2017, the
Department first calculated that 70
percent of the new Executive Order
minimum wage rate of $10.20 is $7.14.
The Executive Order provides that the
current minimum hourly cash wage of
$5.85 must increase by the lesser of
$0.95 or the amount necessary for the
hourly cash wage to equal 70 percent of
the applicable Executive Order
minimum wage. Because $0.95 is less
than $1.29 (the amount necessary for the
hourly cash wage to reach 70 percent of
$10.20), the hourly cash wage must
increase by $0.95.
The new minimum hourly cash wage
that must generally be paid to tipped
workers performing on or in connection
with covered contracts beginning
January 1, 2017 is therefore $6.80 per
hour.
IV. Appendices
Appendix A to this notice provides a
comprehensive chart of the CPI–W data
published by BLS that the Department
utilized to calculate the new Executive
Order minimum wage rate based on the
methodology explained herein.
Appendix B to this notice sets forth an
updated version of the Executive Order
13658 poster that the Department
published with its Final Rule, reflecting
the updated wage rates that will be in
effect beginning January 1, 2017. See 79
FR 60732–33. Pursuant to 29 CFR 10.29,
contractors are required to notify all
workers performing on or in connection
with a covered contract of the
applicable minimum wage rate under
the Executive Order. Contractors with
employees covered by the Fair Labor
Standards Act who are performing on or
in connection with a covered contract
may satisfy the notice requirement by
displaying the poster set forth in
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(CPI–W) (United States city average, all
items, not seasonally adjusted)
Dated: September 6, 2016.
David Weil,
Wage and Hour Administrator.
Appendix B in a prominent or
accessible place at the worksite.
Appendix A: Data Used To Determine
Executive Order 13658 Minimum Wage
Rate Effective January 1, 2017
Data Source: Consumer Price Index for
Urban Wage Earners and Clerical Workers
Quarter 3
2014Q3 to
2015Q2 .........
2015Q3 to
2016Q2 .........
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Annual Percentage
Increase
VerDate Sep<11>2014
Quarter 4
Quarter 1
Quarter 2
Annual
Average
234.525
234.030
234.170
233.229
231.551
229.909
228.294
229.421
231.055
231.520
232.908
233.804 232.0347
233.806
233.366
232.661
232.373
231.721
230.791
231.061
230.972
232.209
233.438
234.444
235.308 232.6792
................ ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ ................
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Appendix B:
WORKER RIGHTS
UNDER EXECUTIVE ORDER 13658
MINIMUM WAQE
TIPS
ENFORCEMENT
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ADDITIONAL
INFORMATION
Federal Register / Vol. 81, No. 182 / Tuesday, September 20, 2016 / Notices
FOR FURTHER INFORMATION CONTACT:
[FR Doc. 2016–22515 Filed 9–19–16; 8:45 am]
Michel Smyth by telephone at 202–693–
4129, TTY 202–693–8064, (these are not
toll-free numbers) or by email at
DOL_PRA_PUBLIC@dol.gov.
BILLING CODE 4510–27–P
DEPARTMENT OF LABOR
Authority: 44 U.S.C. 3507(a)(1)(D).
Office of the Secretary
Agency Information Collection
Activities; Submission for OMB
Review; Comment Request; Model
Employer Children’s Health Insurance
Program Notice
ACTION:
Notice.
The Department of Labor
(DOL) is submitting the Employee
Benefits Security Administration
(EBSA) sponsored information
collection request (ICR) titled, ‘‘Model
Employer Children’s Health Insurance
Program Notice,’’ to the Office of
Management and Budget (OMB) for
review and approval for continued use,
without change, in accordance with the
Paperwork Reduction Act of 1995
(PRA), 44 U.S.C. 3501 et seq. Public
comments on the ICR are invited.
SUMMARY:
The OMB will consider all
written comments that agency receives
on or before October 20, 2016.
DATES:
A copy of this ICR with
applicable supporting documentation;
including a description of the likely
respondents, proposed frequency of
response, and estimated total burden
may be obtained free of charge from the
RegInfo.gov Web site at https://
www.reginfo.gov/public/do/
PRAViewICR?ref_nbr=201608-1210-001
(this link will only become active on the
day following publication of this notice)
or by contacting Michel Smyth by
telephone at 202–693–4129, TTY 202–
693–8064, (these are not toll-free
numbers) or by email at
DOL_PRA_PUBLIC@dol.gov.
Submit comments about this request
by mail or courier to the Office of
Information and Regulatory Affairs,
Attn: OMB Desk Officer for DOL–EBSA,
Office of Management and Budget,
Room 10235, 725 17th Street NW.,
Washington, DC 20503; by Fax: 202–
395–5806 (this is not a toll-free
number); or by email:
OIRA_submission@omb.eop.gov.
Commenters are encouraged, but not
required, to send a courtesy copy of any
comments by mail or courier to the U.S.
Department of Labor-OASAM, Office of
the Chief Information Officer, Attn:
Departmental Information Compliance
Management Program, Room N1301,
200 Constitution Avenue NW.,
Washington, DC 20210; or by email:
DOL_PRA_PUBLIC@dol.gov.
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ADDRESSES:
VerDate Sep<11>2014
17:13 Sep 19, 2016
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This ICR
seeks to extend PRA authority for the
Model Employer Children’s Health
Insurance Program Notice information
collection. Employee Retirement Income
Security Act (ERISA) section
701(f)(3)(B)(i)(I), Public Health Service
Act (PHSA) section 2701(f)(3)(B)(i)(I),
and Internal Revenue Code (Code)
section 9801(f)(3)(B)(i)(I) require an
employer maintaining a group health
plan in a State that provides medical
assistance under a State Medicaid plan
under Social Security Act (SSA) title
XIX or child health assistance under a
State child health plan under SSA title
XXI in the form of premium assistance
for the purchase of coverage under a
group health plan to make certain
disclosures. Specifically, the employer
is required to notify each employee of
potential opportunities currently
available in the State in which the
employee resides for premium
assistance under Medicaid and
Children’s Health Insurance Program
(CHIP) for health coverage of the
employee or the employee’s
dependents. ERISA section
701(f)(3)(B)(i)(II) requires the DOL to
provide employers with model language
for the CHIP notice. The model includes
information on how an employee may
contact the State in which the employee
resides for additional information
regarding potential opportunities for
premium assistance, including how to
apply for such assistance. ERISA section
701(f)(3)(B), PHSA section 2701(f)(3)(B),
and Code section 9801(f)(3)(B) authorize
this information collection. See 29
U.S.C. 1181(f)(3)(b), 42 U.S.C. 300gg–
3(f)(3)(B), 26 U.S.C. 9801(f)(3)(B).
This information collection is subject
to the PRA. A Federal agency generally
cannot conduct or sponsor a collection
of information, and the public is
generally not required to respond to an
information collection, unless it is
approved by the OMB under the PRA
and displays a currently valid OMB
Control Number. In addition,
notwithstanding any other provisions of
law, no person shall generally be subject
to penalty for failing to comply with a
collection of information that does not
display a valid Control Number. See 5
CFR 1320.5(a) and 1320.6. The DOL
obtains OMB approval for this
information collection under Control
Number 1210–0137.
SUPPLEMENTARY INFORMATION:
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64517
OMB authorization for an ICR cannot
be for more than three (3) years without
renewal, and the current approval for
this collection is scheduled to expire on
October 31, 2016. The DOL seeks to
extend PRA authorization for this
information collection for three (3) more
years, without any change to existing
requirements. The DOL notes that
existing information collection
requirements submitted to the OMB
receive a month-to-month extension
while they undergo review. For
additional substantive information
about this ICR, see the related notice
published in the Federal Register on
May 26, 2016 (81 FR 33550).
Interested parties are encouraged to
send comments to the OMB, Office of
Information and Regulatory Affairs at
the address shown in the ADDRESSES
section within thirty (30) days of
publication of this notice in the Federal
Register. In order to help ensure
appropriate consideration, comments
should mention OMB Control Number
1210–0137. The OMB is particularly
interested in comments that:
• Evaluate whether the proposed
collection of information is necessary
for the proper performance of the
functions of the agency, including
whether the information will have
practical utility;
• Evaluate the accuracy of the
agency’s estimate of the burden of the
proposed collection of information,
including the validity of the
methodology and assumptions used;
• Enhance the quality, utility, and
clarity of the information to be
collected; and
• Minimize the burden of the
collection of information on those who
are to respond, including through the
use of appropriate automated,
electronic, mechanical, or other
technological collection techniques or
other forms of information technology,
e.g., permitting electronic submission of
responses.
Agency: DOL–EBSA.
Title of Collection: Model Employer
Children’s Health Insurance Program
Notice.
OMB Control Number: 1210–0137.
Affected Public: Private Sector—
businesses or other for-profits, farms,
and not-for-profit institutions; and State,
Local, and Tribal Governments.
Total Estimated Number of
Respondents: 5,897,699.
Total Estimated Number of
Responses: 175,973,641.
Total Estimated Annual Time Burden:
706,828 hours.
Total Estimated Annual Other Costs
Burden: $16,963,859.
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]]>Agencies
[Federal Register Volume 81, Number 182 (Tuesday, September 20, 2016)]
[Notices]
[Pages 64513-64517]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-22515]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Office of the Secretary
Establishing a Minimum Wage for Contractors, Notice of Rate
Change in Effect as of January 1, 2017
AGENCY: Wage and Hour Division, Department of Labor.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Wage and Hour Division (WHD) of the U.S. Department of
Labor (the Department) is issuing this notice to announce the
applicable minimum wage rate to be paid to workers performing work on
or in connection with Federal contracts covered by Executive Order
13658, beginning January 1, 2017.
Executive Order 13658, Establishing a Minimum Wage for Contractors
(the Executive Order or the Order), was signed by President Barack
Obama on February 12, 2014, and raised the hourly minimum wage paid by
contractors to workers performing work on covered Federal contracts to:
$10.10 per hour, beginning January 1, 2015; and beginning January 1,
2016, and annually thereafter, an amount determined by the Secretary of
Labor (the Secretary) in accordance with the methodology set forth in
the Order. See 79 FR 9851. The Secretary's determination of the
Executive Order minimum wage rate also affects the minimum hourly cash
wage that must be paid to tipped employees performing work on or in
connection with covered contracts. See 79 FR 9851-52. The Secretary is
required to provide notice to the public of the new minimum wage rate
at least 90 days before such rate is to take effect. See 79 FR 9851.
The applicable minimum wage under Executive Order 13658 is currently
$10.15 per hour, in effect since January 1, 2016. See 80 FR 55646. The
applicable minimum cash wage that generally must be paid to tipped
employees performing work on or in connection with covered contracts is
currently $5.85 per hour, in effect since January 1, 2016. Id.
Pursuant to Executive Order 13658 and its implementing regulations
at 29 CFR part 10, notice is hereby given that beginning January 1,
2017, the Executive Order minimum wage rate that generally must be paid
to workers performing work on or in connection with covered contracts
will increase to $10.20 per hour. Notice is also hereby given that,
beginning January 1, 2017, the required minimum cash wage that
generally must be paid to tipped employees performing work on or in
connection with covered contracts will increase to $6.80 per hour.
DATES: This notice is effective on September 20, 2016.
FOR FURTHER INFORMATION CONTACT: Robert Waterman, Division of
Regulations, Legislation, and Interpretation, Wage and Hour Division,
U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW.,
Washington, DC 20210; telephone: (202) 693-0406 (this is not a toll-
free number). Copies of this notice may be obtained in alternative
formats (Large Print, Braille, Audio Tape, or Disc), upon request, by
calling (202) 693-0023 (not a toll-free number). TTY/TTD callers may
dial toll-free (877) 889-5627 to obtain information or request
materials in alternative formats.
SUPPLEMENTARY INFORMATION:
I. Executive Order 13658 Background and Requirements for Determining
Annual Increases to the Minimum Wage Rate
Executive Order 13658 was signed by President Barack Obama on
February 12, 2014, and raised the hourly minimum wage paid by
contractors to workers performing work on or in connection with covered
Federal contracts to $10.10 per hour, beginning January 1, 2015; and
beginning January 1, 2016, and annually thereafter, an amount
determined by the Secretary pursuant to the Order. See 79 FR 9851. The
Executive Order directed the Secretary to issue regulations to
implement the Order's requirements. See 79 FR 9852. Accordingly, after
engaging in notice-and-comment rulemaking, the Department published a
Final Rule on October 7, 2014 to implement the Executive Order. See 79
FR 60634. The final regulations, set forth at 29 CFR part 10,
established standards and procedures for implementing and enforcing the
minimum wage protections of the Order.
The Executive Order and its implementing regulations require the
Secretary to determine the applicable minimum wage rate to be paid to
workers performing work on or in connection with covered contracts on
an annual basis, beginning January 1, 2016. See 79 FR 9851; 29 CFR
10.1(a)(2), 10.5(a)(2), 10.12(a). Sections 2(a) and (b) of the Order
establish the methodology that the Secretary must use to determine the
annual inflation-based increases to the minimum wage rate. See 79 FR
9851. These provisions, which are implemented in 29 CFR 10.5(b),
explain that the applicable minimum wage determined by the Secretary
for each calendar year shall be:
(i) Not less than the amount in effect on the date of such
determination;
(ii) Increased from such amount by the annual percentage increase
in the Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W) (United States city average, all items, not seasonally
adjusted), or its successor publication, as determined by the Bureau of
Labor Statistics (BLS); and
(iii) Rounded to the nearest multiple of $0.05.
Section 2(b) of the Executive Order further provides that, in
calculating the annual percentage increase in the CPI-W for purposes of
determining the new minimum wage rate, the Secretary shall compare such
CPI-W 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) with the CPI-W for the same month in the preceding
year, the same quarter in the preceding year, or the preceding year,
respectively. See 79 FR 9851. In order to calculate the annual
percentage increase in the CPI-W, the Department elected in its Final
Rule implementing the Executive Order to compare such CPI-W for the
most recent year available with the CPI-W for the preceding year. See
29 CFR 10.5(b)(2)(iii). In its Final Rule, the Department explained
that it decided to compare the CPI-W for the most recent year available
(instead of using the most recent month or quarter, as allowed by the
Order) with the CPI-W for the preceding year, in order ``to minimize
the impact of seasonal fluctuations on the Executive Order minimum wage
rate.'' 79 FR 60666.
Once a determination has been made with respect to the new minimum
wage rate to be paid to workers performing work on or in connection
with covered contracts, the Executive Order and its implementing
regulations require the Secretary to notify the public of the
applicable minimum wage rate on an annual basis at least 90 days before
any new minimum wage is to take effect. See 79 FR 9851; 29 CFR
10.5(a)(2),
[[Page 64514]]
10.12(c)(1). The regulations explain that the Administrator of the
Department's Wage and Hour Division (the Administrator) will publish an
annual notice in the Federal Register stating the applicable minimum
wage rate at least 90 days before any new minimum wage is to take
effect. See 29 CFR 10.12(c)(2)(i). Additionally, the regulations state
that the Administrator will provide notice of the Executive Order
minimum wage rate on Wage Determinations OnLine (WDOL), https://www.wdol.gov, or any successor site; on all wage determinations issued
under the Davis-Bacon Act (DBA), 40 U.S.C. 3141 et seq., and the
Service Contract Act (SCA), 41 U.S.C. 6701 et seq.; and by other means
the Administrator deems appropriate. See 29 CFR 10.12(c)(2)(ii)-(iv).
Section 3 of the Executive Order requires contractors to pay tipped
employees covered by the Order performing on or in connection with
covered contracts an hourly cash wage of at least $4.90, beginning on
January 1, 2015, provided the employees receive sufficient tips to
equal the Executive Order minimum wage rate under section 2 of the
Order when combined with the cash wage. See 79 FR 9851-52; 29 CFR
10.28(a). The Order further provides that, in each succeeding year,
beginning January 1, 2016, the required cash wage must increase by
$0.95 (or a lesser amount if necessary) until it reaches 70 percent of
the Executive Order minimum wage. Id. For subsequent years, the cash
wage for tipped employees will be 70 percent of the Executive Order
minimum wage rounded to the nearest $0.05. Id. At all times, the amount
of tips received by the employee must equal at least the difference
between the cash wage paid and the Executive Order minimum wage; if the
employee does not receive sufficient tips, the contractor must increase
the cash wage paid so that the cash wage in combination with the tips
received equals the Executive Order minimum wage. Id.
On September 16, 2015, the Administrator published a notice in the
Federal Register informing the public that, effective January 1, 2016,
the Executive Order minimum wage and the minimum cash wage required to
be paid to tipped employees covered by the Executive Order would be
$10.15 and $5.85 per hour, respectively. See 80 FR 55646.
II. The 2017 Executive Order Minimum Wage Rate
In accordance with the methodology set forth in the Executive Order
and summarized above, the Department must first determine the annual
percentage increase in the CPI-W (United States city average, all
items, not seasonally adjusted) as published by BLS in order to
determine the new Executive Order minimum wage rate. In calculating the
annual percentage increase in the CPI, the Department must compare the
CPI-W for the most recent year available with the CPI-W for the
preceding year. The Department therefore compares the percentage change
in the CPI-W between the most recent year (i.e., the most recent four
quarters) and the prior year (i.e., the four quarters preceding the
most recent year). The current Executive Order minimum wage rate must
then be increased by the resulting annual percentage change and rounded
to the nearest multiple of $0.05.
In order to determine the Executive Order minimum wage rate
beginning January 1, 2017, the Department therefore calculated the CPI-
W for the most recent year by averaging the CPI-W for the four most
recent quarters, which consist of the first two quarters of 2016 and
the last two quarters of 2015 (i.e., July 2015 through June 2016). The
Department then compared that data to the average CPI-W for the
preceding year, which consists of the first two quarters of 2015 and
the last two quarters of 2014 (i.e., July 2014 through June 2015).
Based on this methodology, the Department determined that the annual
percentage increase in the CPI-W (United States city average, all
items, not seasonally adjusted) was 0.278%. The Department then applied
that annual percentage increase of 0.278% to the current Executive
Order hourly minimum wage rate of $10.15, which resulted in a wage rate
of $10.18 (($10.15 x .00278) + $10.15); however, pursuant to the
Executive Order, that rate must be rounded to the nearest multiple of
$0.05.
The new Executive Order minimum wage rate that must generally be
paid to workers performing on or in connection with covered contracts
beginning January 1, 2017 is therefore $10.20 per hour.
III. The 2017 Executive Order Minimum Cash Wage for Tipped Employees
As noted above, section 3 of the Executive Order requires
contractors to pay tipped employees covered by the Order performing on
or in connection with covered contracts an hourly cash wage of at least
$4.90, beginning January 1, 2015, provided the employees receive
sufficient tips to equal the Executive Order minimum wage rate under
section 2 of the Order when combined with the cash wage. See 79 FR
9851-52; 29 CFR 10.28(a). Section 3 of the Executive Order also
provides a methodology to be utilized each year in determining the
amount of the minimum hourly cash wage that must be paid to tipped
employees performing on or in connection with covered contracts.
Pursuant to the Order, in each succeeding year, beginning January 1,
2016, the required cash wage increases by $0.95 (or a lesser amount if
necessary) until it reaches 70 percent of the Executive Order minimum
wage rate. For subsequent years, the cash wage for tipped employees
will be 70 percent of the Executive Order minimum wage rate rounded to
the nearest $0.05.
In order to determine the minimum hourly cash wage that must be
paid to tipped employees performing on or in connection with covered
contracts beginning January 1, 2017, the Department first calculated
that 70 percent of the new Executive Order minimum wage rate of $10.20
is $7.14. The Executive Order provides that the current minimum hourly
cash wage of $5.85 must increase by the lesser of $0.95 or the amount
necessary for the hourly cash wage to equal 70 percent of the
applicable Executive Order minimum wage. Because $0.95 is less than
$1.29 (the amount necessary for the hourly cash wage to reach 70
percent of $10.20), the hourly cash wage must increase by $0.95.
The new minimum hourly cash wage that must generally be paid to
tipped workers performing on or in connection with covered contracts
beginning January 1, 2017 is therefore $6.80 per hour.
IV. Appendices
Appendix A to this notice provides a comprehensive chart of the
CPI-W data published by BLS that the Department utilized to calculate
the new Executive Order minimum wage rate based on the methodology
explained herein. Appendix B to this notice sets forth an updated
version of the Executive Order 13658 poster that the Department
published with its Final Rule, reflecting the updated wage rates that
will be in effect beginning January 1, 2017. See 79 FR 60732-33.
Pursuant to 29 CFR 10.29, contractors are required to notify all
workers performing on or in connection with a covered contract of the
applicable minimum wage rate under the Executive Order. Contractors
with employees covered by the Fair Labor Standards Act who are
performing on or in connection with a covered contract may satisfy the
notice requirement by displaying the poster set forth in
[[Page 64515]]
Appendix B in a prominent or accessible place at the worksite.
Dated: September 6, 2016.
David Weil,
Wage and Hour Administrator.
Appendix A: Data Used To Determine Executive Order 13658 Minimum Wage
Rate Effective January 1, 2017
Data Source: Consumer Price Index for Urban Wage Earners and
Clerical Workers (CPI-W) (United States city average, all items, not
seasonally adjusted)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Quarter 3
Quarter 4
Quarter 1
Quarter 2 Annual
Average
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2014Q3 to 2015Q2................................. 234.525 234.030 234.170 233.229 231.551 229.909 228.294 229.421 231.055 231.520 232.908 233.804 232.0347
2015Q3 to 2016Q2................................. 233.806 233.366 232.661 232.373 231.721 230.791 231.061 230.972 232.209 233.438 234.444 235.308 232.6792
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Annual Percentage Increase................... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... 0.278%
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[[Page 64516]]
Appendix B:
[GRAPHIC] [TIFF OMITTED] TN20SE16.026
[[Page 64517]]
[FR Doc. 2016-22515 Filed 9-19-16; 8:45 am]
BILLING CODE 4510-27-P
