Establishing a Minimum Wage for Contractors, Notice of Rate Change in Effect as of January 1, 2019, 44906-44909 [2018-19166]

Download as PDF sradovich on DSK3GMQ082PROD with NOTICES 44906 Federal Register / Vol. 83, No. 171 / Tuesday, September 4, 2018 / Notices be included in each type of notice and further authorize the Secretary of Labor to prescribe (1) how notice to participants and beneficiaries must be given and (2) any additional reporting requirements deemed necessary. ERISA Technical Release 91–1 provides guidance on how to satisfy the subject ERISA notice requirements. The Release made two changes in the statutory requirements for the second type of notice. First, it required the notice to include a filing date and the intended asset transfer date. The Release also simplified the statutory filing requirements by providing that filing with the DOL would be deemed sufficient notice to both the DOL and the Department of the Treasury. ERISA section 101(e) authorizes this information collection. See 29 U.S.C. 1021(e). 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 1210–0084. OMB authorization for an ICR cannot be for more than three (3) years without renewal, and 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 April 11, 2018 (83 FR 15635). 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 1210–0084. The OMB is particularly interested in comments that: • Evaluate whether the proposed collection of information is necessary for the proper performance of the VerDate Sep<11>2014 17:54 Aug 31, 2018 Jkt 244001 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: Employee Retirement Income Security Act of 1974 Technical Release 1991–1. OMB Control Number: 1210–0084. Affected Public: Private Sector— businesses or other for-profits. Total Estimated Number of Respondents: 4. Total Estimated Number of Responses: 26,966. Total Estimated Annual Time Burden: 422 hours. Total Estimated Annual Other Costs Burden: $6,917. Wage and Hour Division, Department of Labor. ACTION: Notice. with covered federal contracts to $10.10 per hour, beginning January 1, 2015, with annual adjustments thereafter as determined by the Secretary of Labor (the Secretary) in accordance with the methodology set forth in the Order. The Secretary’s determination of the Executive Order minimum wage rate also affects the minimum hourly cash wage for tipped employees performing work on or in connection with covered contracts. The Secretary is required to provide notice to the public of the new minimum wage rate at least 90 days before the rate takes effect. The applicable minimum wage under the Executive Order is currently $10.35 per hour, in effect since January 1, 2018. Pursuant to the Executive Order and its implementing regulations in the Code of Federal Regulations, notice is hereby given that beginning January 1, 2019, 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 $10.60 per hour. Notice is also hereby given that, beginning January 1, 2019, 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 $7.40 per hour. DATES: These new rates shall take effect on January 1, 2019. FOR FURTHER INFORMATION CONTACT: Melissa Smith, Director, 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: 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 for workers performing work on or in connection with federal contracts covered by Executive Order 13658, beginning January 1, 2019. Executive Order 13658, Establishing a Minimum Wage for Contractors (the Executive Order or the Order), was signed on February 12, 2014, and raised the hourly minimum wage for workers performing work on or in connection I. Executive Order 13658 Background and Requirements for Determining Annual Increases to the Minimum Wage Rate The Executive Order was signed on February 12, 2014, and raised the hourly minimum wage for workers performing work on or in connection with covered federal contracts to $10.10 per hour, beginning January 1, 2015, with annual adjustments thereafter in an amount determined by the Secretary pursuant to the Order. See 79 FR 9851. The Executive Order directed the Secretary Authority: 44 U.S.C. 3507(a)(1)(D). Dated: August 27, 2018. Michel Smyth, Departmental Clearance Officer. [FR Doc. 2018–19100 Filed 8–31–18; 8:45 am] BILLING CODE 4510–29–P DEPARTMENT OF LABOR Wage and Hour Division Establishing a Minimum Wage for Contractors, Notice of Rate Change in Effect as of January 1, 2019 AGENCY: SUMMARY: PO 00000 Frm 00050 Fmt 4703 Sfmt 4703 E:\FR\FM\04SEN1.SGM 04SEN1 sradovich on DSK3GMQ082PROD with NOTICES Federal Register / Vol. 83, No. 171 / Tuesday, September 4, 2018 / Notices to issue regulations to implement the Order’s requirements. See 79 FR 9852. Accordingly, after engaging in noticeand-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 for 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. 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, ‘‘to minimize the impact VerDate Sep<11>2014 17:54 Aug 31, 2018 Jkt 244001 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, 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 takes effect. See 79 FR 9851; 29 CFR 10.5(a)(2), 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 takes 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), http://www.wdol.gov, or any successor site; on all wage determinations issued under the DavisBacon 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. The Executive Order minimum wage and the cash wage required for tipped employees are currently $10.35 and $7.25 per hour, respectively. The Department announced these rates on PO 00000 Frm 00051 Fmt 4703 Sfmt 4703 44907 September 15, 2017, 82 FR 43408, and the rates took effect on January 1, 2018. II. The 2019 Executive Order Minimum Wage Rate Using 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, to determine the new Executive Order minimum wage rate. In calculating the annual percentage increase in the CPI–W, 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 Department then increases the current Executive Order minimum wage rate by the resulting annual percentage change and rounds to the nearest multiple of $0.05. In order to determine the Executive Order minimum wage rate beginning January 1, 2019, 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 2018 and the last two quarters of 2017 (i.e., July 2017 through June 2018). The Department then compared that data to the average CPI–W for the preceding year, which consists of the first two quarters of 2017 and the last two quarters of 2016 (i.e., July 2016 through June 2017). 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 2.337 percent. The Department then applied that annual percentage increase of 2.337 percent to the current Executive Order hourly minimum wage rate of $10.35, which resulted in a wage rate of $10.592 (($10.35 × 0.02337) + $10.35); 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, 2019 is therefore $10.60 per hour. III. The 2019 Executive Order Minimum Cash Wage for Tipped Employees As noted above, section 3 of the Executive Order provides a methodology to determine the amount E:\FR\FM\04SEN1.SGM 04SEN1 44908 Federal Register / Vol. 83, No. 171 / Tuesday, September 4, 2018 / Notices of the minimum hourly cash wage that must be paid to tipped employees performing on or in connection with covered contracts. Because the cash wage for tipped employees reached 70 percent of the Executive Order minimum wage beginning on January 1, 2018 (i.e., $7.25 per hour compared to $10.35 per hour), future updates to the cash wage for tipped employees must continue to set the rate at 70 percent of the full Executive Order minimum wage. Seventy percent of the new Executive Order minimum wage rate of $10.60 is $7.42. Because the Executive Order provides that the rate must be rounded to the nearest $0.05, the new minimum hourly cash wage for tipped workers performing on or in connection with covered contracts beginning January 1, 2019 is therefore $7.40 per hour. IV. Appendices Appendix A to this notice provides a comprehensive chart of the CPI–W data published by BLS that the Department used 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 poster that the Department published with its Final Rule, reflecting the updated wage rates that will be in effect beginning January 1, 2019. 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 Quarter 3 2016Q3 to 2017Q2 ......... 2017Q3 to 2018Q2 ......... Annual Percentage Increase Quarter 4 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 Appendix B in a prominent or accessible place at the worksite. Dated: August, 22, 2018. Bryan Jarrett, Acting Administrator, Wage and Hour Division. Appendix A: Data Used To Determine Executive Order 13658 Minimum Wage Rate Effective January 1, 2019 Data Source: Consumer Price Index for Urban wage Earners and Clerical Workers (CPI–W) (United States city average, all items, not seasonally adjusted). Quarter 1 234.904 235.495 235.732 235.215 235.390 236.854 237.477 237.656 238.432 238.609 238.813 236.6123 238.617 239.448 240.939 240.573 240.666 240.526 241.919 242.988 243.463 244.607 245.770 246.196 242.1427 ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ BILLING CODE 4510–27–P sradovich on DSK3GMQ082PROD with NOTICES Annual Average 234.771 Appendix B: Updated Version of the Executive Order 13658 Poster VerDate Sep<11>2014 Quarter 2 17:54 Aug 31, 2018 Jkt 244001 PO 00000 Frm 00052 Fmt 4703 Sfmt 4703 E:\FR\FM\04SEN1.SGM 04SEN1 2.337% Federal Register / Vol. 83, No. 171 / Tuesday, September 4, 2018 / Notices 44909 MINIMUM WAGE TIPS EXCLUSIONS ENFORCEMENT [FR Doc. 2018–19166 Filed 8–31–18; 8:45 am] BILLING CODE 4510–27–C VerDate Sep<11>2014 17:54 Aug 31, 2018 Jkt 244001 PO 00000 Frm 00053 Fmt 4703 Sfmt 9990 E:\FR\FM\04SEN1.SGM 04SEN1 EN04SE18.005</GPH> sradovich on DSK3GMQ082PROD with NOTICES ADDITIONAL INFORMATION

Agencies

[Federal Register Volume 83, Number 171 (Tuesday, September 4, 2018)]
[Notices]
[Pages 44906-44909]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-19166]


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DEPARTMENT OF LABOR

Wage and Hour Division


Establishing a Minimum Wage for Contractors, Notice of Rate 
Change in Effect as of January 1, 2019

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 for workers performing work on or in 
connection with federal contracts covered by Executive Order 13658, 
beginning January 1, 2019.
    Executive Order 13658, Establishing a Minimum Wage for Contractors 
(the Executive Order or the Order), was signed on February 12, 2014, 
and raised the hourly minimum wage for workers performing work on or in 
connection with covered federal contracts to $10.10 per hour, beginning 
January 1, 2015, with annual adjustments thereafter as determined by 
the Secretary of Labor (the Secretary) in accordance with the 
methodology set forth in the Order. The Secretary's determination of 
the Executive Order minimum wage rate also affects the minimum hourly 
cash wage for tipped employees performing work on or in connection with 
covered contracts. The Secretary is required to provide notice to the 
public of the new minimum wage rate at least 90 days before the rate 
takes effect. The applicable minimum wage under the Executive Order is 
currently $10.35 per hour, in effect since January 1, 2018.
    Pursuant to the Executive Order and its implementing regulations in 
the Code of Federal Regulations, notice is hereby given that beginning 
January 1, 2019, 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 $10.60 per hour. Notice is also 
hereby given that, beginning January 1, 2019, 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 $7.40 per 
hour.

DATES: These new rates shall take effect on January 1, 2019.

FOR FURTHER INFORMATION CONTACT: Melissa Smith, Director, 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

    The Executive Order was signed on February 12, 2014, and raised the 
hourly minimum wage for workers performing work on or in connection 
with covered federal contracts to $10.10 per hour, beginning January 1, 
2015, with annual adjustments thereafter in an amount determined by the 
Secretary pursuant to the Order. See 79 FR 9851. The Executive Order 
directed the Secretary

[[Page 44907]]

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 for 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. 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, ``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, 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 takes 
effect. See 79 FR 9851; 29 CFR 10.5(a)(2), 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 takes 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), http://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.
    The Executive Order minimum wage and the cash wage required for 
tipped employees are currently $10.35 and $7.25 per hour, respectively. 
The Department announced these rates on September 15, 2017, 82 FR 
43408, and the rates took effect on January 1, 2018.

II. The 2019 Executive Order Minimum Wage Rate

    Using 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, to determine the 
new Executive Order minimum wage rate. In calculating the annual 
percentage increase in the CPI-W, 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 Department then increases the current Executive 
Order minimum wage rate by the resulting annual percentage change and 
rounds to the nearest multiple of $0.05.
    In order to determine the Executive Order minimum wage rate 
beginning January 1, 2019, 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 2018 and 
the last two quarters of 2017 (i.e., July 2017 through June 2018). The 
Department then compared that data to the average CPI-W for the 
preceding year, which consists of the first two quarters of 2017 and 
the last two quarters of 2016 (i.e., July 2016 through June 2017). 
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 2.337 percent. The Department then 
applied that annual percentage increase of 2.337 percent to the current 
Executive Order hourly minimum wage rate of $10.35, which resulted in a 
wage rate of $10.592 (($10.35 x 0.02337) + $10.35); 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, 2019 is therefore $10.60 per hour.

III. The 2019 Executive Order Minimum Cash Wage for Tipped Employees

    As noted above, section 3 of the Executive Order provides a 
methodology to determine the amount

[[Page 44908]]

of the minimum hourly cash wage that must be paid to tipped employees 
performing on or in connection with covered contracts. Because the cash 
wage for tipped employees reached 70 percent of the Executive Order 
minimum wage beginning on January 1, 2018 (i.e., $7.25 per hour 
compared to $10.35 per hour), future updates to the cash wage for 
tipped employees must continue to set the rate at 70 percent of the 
full Executive Order minimum wage. Seventy percent of the new Executive 
Order minimum wage rate of $10.60 is $7.42. Because the Executive Order 
provides that the rate must be rounded to the nearest $0.05, the new 
minimum hourly cash wage for tipped workers performing on or in 
connection with covered contracts beginning January 1, 2019 is 
therefore $7.40 per hour.

IV. Appendices

    Appendix A to this notice provides a comprehensive chart of the 
CPI-W data published by BLS that the Department used 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 poster that the Department published 
with its Final Rule, reflecting the updated wage rates that will be in 
effect beginning January 1, 2019. 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 Appendix B in a prominent or 
accessible place at the worksite.

    Dated: August, 22, 2018.
Bryan Jarrett,
Acting Administrator, Wage and Hour Division.

Appendix A: Data Used To Determine Executive Order 13658 Minimum Wage 
Rate Effective January 1, 2019

    Data Source: Consumer Price Index for Urban wage Earners and 
Clerical Workers (CPI-W) (United States city average, all items, not 
seasonally adjusted).

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
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                                                              Quarter 3
                                                              Quarter 4
                                                              Quarter 1
                                                              Quarter 2                Annual
                                                                                      Average
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2016Q3 to 2017Q2.................................    234.771    234.904    235.495    235.732    235.215    235.390    236.854    237.477    237.656    238.432    238.609    238.813   236.6123
2017Q3 to 2018Q2.................................    238.617    239.448    240.939    240.573    240.666    240.526    241.919    242.988    243.463    244.607    245.770    246.196   242.1427
                                                  ----------------------------------------------------------------------------------------------------------------------------------------------
Annual Percentage Increase.......................  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........     2.337%
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Appendix B: Updated Version of the Executive Order 13658 Poster

BILLING CODE 4510-27-P

[[Page 44909]]

[GRAPHIC] [TIFF OMITTED] TN04SE18.005

[FR Doc. 2018-19166 Filed 8-31-18; 8:45 am]
BILLING CODE 4510-27-C