Increasing the Minimum Wage for Federal Contractors, 22835-22838 [2021-09263]

Agencies

• Executive Office of the President

[Federal Register Volume 86, Number 82 (Friday, April 30, 2021)]
[Presidential Documents]
[Pages 22835-22838]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-09263]




                        Presidential Documents 



Federal Register / Vol. 86, No. 82 / Friday, April 30, 2021 / 
Presidential Documents

[[Page 22835]]


                Executive Order 14026 of April 27, 2021

                
Increasing the Minimum Wage for Federal 
                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 that adequately 
                compensate their workers, it is hereby ordered as 
                follows:

                Section 1. Policy. This order promotes economy and 
                efficiency in Federal procurement by increasing the 
                hourly minimum wage paid by the parties that contract 
                with the Federal Government to $15.00 for those workers 
                working on or in connection with a Federal Government 
                contract as described in section 8 of this order. 
                Raising the minimum wage enhances worker productivity 
                and generates higher-quality work by boosting workers' 
                health, morale, and effort; reducing absenteeism and 
                turnover; and lowering supervisory and training costs. 
                Accordingly, ensuring that Federal contractors pay 
                their workers an hourly wage of at least $15.00 will 
                bolster economy and efficiency in Federal procurement.

                Sec. 2. Increasing the Minimum Wage for Federal 
                Contractors and Subcontractors. (a) Executive 
                departments and agencies, including independent 
                establishments subject to the Federal Property and 
                Administrative Services Act, 40 U.S.C. 102(4)(A), (5) 
                (agencies), shall, to the extent permitted by law, 
                ensure that contracts and contract-like instruments (as 
                defined in regulations issued pursuant to section 4(a) 
                of this order and as described in section 8(a) of this 
                order) include a clause that the contractor and any 
                covered subcontractors (as defined in regulations 
                issued pursuant to section 4(a) of this order) shall 
                incorporate into lower-tier subcontracts. This clause 
                shall specify that, as a condition of payment, the 
                minimum wage to be paid to workers employed in the 
                performance of the contract or any covered subcontract 
                thereunder, including workers whose wages are 
                calculated pursuant to special certificates issued 
                under section 14(c) of the Fair Labor Standards Act of 
                1938 (29 U.S.C. 214(c)), shall be at least:

(i) $15.00 per hour, beginning January 30, 2022; and

(ii) beginning January 1, 2023, 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) of 
                this section) with the Consumer Price Index for the 
                same month in the

[[Page 22836]]

                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 under section 2 of this order who are tipped 
                employees pursuant to section 3(t) of the Fair Labor 
                Standards Act of 1938 (29 U.S.C. 203(t)), the cash wage 
                that must be paid by an employer to such workers shall 
                be at least:

(i) $10.50 per hour, beginning January 30, 2022;

(ii) beginning January 1, 2023, 85 percent of the wage in effect under 
section 2 of this order, rounded to the nearest multiple of $0.05; and

(iii) beginning January 1, 2024, and for each subsequent year, 100 percent 
of the wage in effect under section 2 of this order.

                    (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 under section 2 of this 
                order, 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, consistent with applicable law, issue 
                regulations by November 24, 2021, to implement the 
                requirements of this order. Such regulations shall 
                include both definitions of relevant terms and, as 
                appropriate, exclusions from the requirements of this 
                order. Within 60 days of the Secretary issuing such 
                regulations, the Federal Acquisition Regulatory 
                Council, to the extent permitted by law, shall amend 
                the Federal Acquisition Regulation to provide for 
                inclusion in Federal procurement solicitations, 
                contracts, and contract-like instruments subject to 
                this order the clause described in section 2(a) of 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 and contract-like instruments as 
                described in sections 8(a)(i)(C) and (D) of this order, 
                entered into on or after January 30, 2022, 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, incorporate existing 
                definitions, principles, procedures, remedies, and 
                enforcement processes under the Fair Labor Standards 
                Act of 1938, 29 U.S.C. 201 et seq.; the Service 
                Contract Act, 41 U.S.C. 6701 et seq.; the Davis-Bacon 
                Act, 40 U.S.C. 3141 et seq.; Executive Order 13658 of 
                February 12, 2014 (Establishing a Minimum Wage for 
                Contractors); and regulations issued to implement that 
                order.

                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, 41 U.S.C. 7101 et seq., and disputes 
                regarding whether a contractor has paid the wages 
                prescribed by this order, as appropriate and consistent 
                with applicable law, shall be disposed of only as 
                provided by the Secretary in regulations issued 
                pursuant to this order.

                Sec. 6. Revocation of Certain Presidential Actions. 
                Executive Order 13838 of May 25, 2018 (Exemption From 
                Executive Order 13658 for Recreational Services on 
                Federal Lands), is revoked as of January 30, 2022. 
                Executive

[[Page 22837]]

                Order 13658 of February 12, 2014 (Establishing a 
                Minimum Wage for Contractors), is superseded, as of 
                January 30, 2022, to the extent it is inconsistent with 
                this order.

                Sec. 7. Severability. If any provision of this order, 
                or the application of any provision of this order to 
                any person or circumstance, is held to be invalid, the 
                remainder of this order and its application to any 
                other person or circumstance shall not be affected 
                thereby.

                Sec. 8. Applicability. (a) This order shall apply to 
                any new contract; new contract-like instrument; new 
                solicitation; extension or renewal of an existing 
                contract or contract-like instrument; and exercise of 
                an option on an existing contract or contract-like 
                instrument, if (i):

  (A) it is a procurement contract or contract-like instrument 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 CFR 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.

                    (b) 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. Where workers' wages are governed by 
                the Fair Labor Standards Act of 1938, this order shall 
                apply only to procurement 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.
                    (c) This order shall not apply to grants; 
                contracts, contract-like instruments, or agreements 
                with 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.

                Sec. 9. Effective Date. (a) This order is effective 
                immediately and shall apply to new contracts; new 
                contract-like instruments; new solicitations; 
                extensions or renewals of existing contracts or 
                contract-like instruments; and exercises of options on 
                existing contracts or contract-like instruments, as 
                described in section 8(a) in this order, where the 
                relevant contract or contract-like instrument will be 
                entered into, the relevant contract or contract-like 
                instrument will be extended or renewed, or the relevant 
                option will be exercised, on or after:

(i) January 30, 2022, 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 30, 2022, consistent with the effective date for 
such action.

                    (b) As an exception to subsection (a) of this 
                section, where agencies have issued a solicitation 
                before the effective date for the relevant action taken 
                pursuant to section 4 of this order and entered into a 
                new contract or contract-like instrument resulting from 
                such solicitation within 60 days of such effective 
                date, such agencies are strongly encouraged but not 
                required to ensure that the minimum wages specified in 
                sections 2 and 3 of this

[[Page 22838]]

                order are paid in the new contract or contract-like 
                instrument. But if that contract or contract-like 
                instrument is subsequently extended or renewed, or an 
                option is subsequently exercised under that contract or 
                contract-like instrument, the minimum wages specified 
                in sections 2 and 3 of this order shall apply to that 
                extension, renewal, or option.
                    (c) For all existing contracts and contract-like 
                instruments, solicitations issued between the date of 
                this order and the effective dates set forth in this 
                section, and contracts and contract-like instruments 
                entered into between the date of this order and the 
                effective dates set forth in this section, agencies are 
                strongly encouraged, to the extent permitted by law, to 
                ensure that the hourly wages paid under such contracts 
                or contract-like instruments are consistent with the 
                minimum wages specified in sections 2 and 3 of this 
                order.

                Sec. 10. General Provisions. (a) Nothing in this order 
                shall be construed to impair or otherwise affect:

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

(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.
                
                
                    (Presidential Sig.)

                THE WHITE HOUSE,

                    April 27, 2021.

[FR Doc. 2021-09263
Filed 4-29-21; 8:45 am]
Billing code 3295-F1-P