Minimum Wage for Federal Contracts Covered by Executive Order 13658, Notice of Rate Change in Effect as of January 1, 2023, 59468-59472 [2022-20905]
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Federal Register / Vol. 87, No. 189 / Friday, September 30, 2022 / Notices
I. Executive Order 13658 Background
and Requirements for Determining
Annual Increases to the Minimum
Wage Rate
[FR Doc. 2022–20906 Filed 9–29–22; 8:45 am]
BILLING CODE 4510–27–P
DEPARTMENT OF LABOR
Wage and Hour Division
Minimum Wage for Federal Contracts
Covered by Executive Order 13658,
Notice of Rate Change in Effect as of
January 1, 2023
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 for workers performing work
on or in connection with federal
contracts covered by Executive Order
13658, Establishing a Minimum Wage
for Contractors (the Executive Order or
the order), beginning January 1, 2023.
Beginning on that date, the Executive
Order 13658 minimum wage rate that
generally must be paid to workers
performing work on or in connection
with covered contracts will increase to
$12.15 per hour, while 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 $8.50 per
hour. Covered contracts that are entered
into on or after January 30, 2022, or that
are renewed or extended (pursuant to an
option or otherwise) on or after January
30, 2022, are generally subject to a
higher minimum wage rate established
by Executive Order 14026 of April 27,
2021, Increasing the Minimum Wage for
Federal Contractors.
DATES: These new Executive Order
13658 rates shall take effect on January
1, 2023.
FOR FURTHER INFORMATION CONTACT:
Amy DeBisschop, 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). Alternative formats are
available upon request by calling 1–
866–487–9243. If you are deaf, hard of
hearing, or have a speech disability,
please dial 7–1–1 to access
telecommunications relay services.
SUPPLEMENTARY INFORMATION:
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SUMMARY:
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Executive Order 13658 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
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.
Executive Order 13658 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)(2),
explain that the applicable minimum
wage determined by the Secretary for
each calendar year shall be:
• Not less than the amount in effect
on the date of such determination;
• 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
• Rounded to the nearest multiple of
$0.05.
Section 2(b) of Executive Order 13658
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
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(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 the 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 the 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, Executive Order 13658 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), https://www.wdol.gov, or any
successor site; 1 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 Executive Order 13658
requires contractors to pay tipped
employees covered by the order
performing on or in connection with
covered contracts an hourly cash wage
1 WDOL.gov has since moved to https://sam.gov/
content/wage-determinations. This website is the
authoritative and single website for obtaining
appropriate Service Contract Act and Davis-Bacon
Act wage determinations for each official contract
action.
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Federal Register / Vol. 87, No. 189 / Friday, September 30, 2022 / Notices
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. When
a contractor is using a tip credit to meet
a portion of its wage obligations under
the Executive Order, 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 13658 minimum
wage and the cash wage required for
tipped employees are currently $11.25
and $7.90 per hour, respectively. The
Department announced these rates on
September 15, 2021, and the rates took
effect on January 1, 2022. 86 FR 51683
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II. Effect of Executive Order 14026
On April 27, 2021, President Joseph
R. Biden, Jr. signed Executive Order
14026, Increasing the Minimum Wage
for Federal Contractors. 86 FR 22835.
Executive Order 14026 establishes a
higher hourly minimum wage of $15.00
per hour, beginning on January 30,
2022, and, beginning January 1, 2023,
and annually thereafter, an amount
determined by the Secretary in
accordance with the order. This higher
hourly minimum wage applies to the
same types of contracts with the Federal
Government that are covered by
Executive Order 13658. However,
Executive Order 14026 only applies to
contracts with the Federal Government
that are entered into on or after January
30, 2022, or that are renewed or
extended (pursuant to an exercised
option or otherwise) on or after January
30, 2022. For some amount of time, the
Department therefore anticipates that
there will be some existing contracts
with the Federal Government that do
not qualify as a covered ‘‘new contract’’
for purposes of Executive Order 14026
and thus will remain subject to the
minimum wage requirements of
Executive Order 13658.
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The Department anticipates that, in
the relatively near future, essentially all
covered contracts with the Federal
Government will qualify as ‘‘new’’
contracts under Executive Order 14026
and be subject to its higher minimum
wage rate. Until such time, however,
Executive Order 13658 and its
regulations at 29 CFR part 10 must
remain in place. Accordingly, the
Department will continue announcing
annual updates to Executive Order
13658’s minimum wage rates for
existing contracts still covered by
Executive Order 13658.2
III. The 2022 Executive Order 13658
Minimum Wage Rate
Using the methodology set forth in
Executive Order 13658 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
13658 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 13658 minimum wage rate
beginning January 1, 2023, the
Department 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 2022 and the last two quarters of 2021
(i.e., July 2021 through June 2022). This
produced an average index level of
277.2779.3 The Department then
compared that data to the average CPI–
2 Based on an order issued by the U.S. Court of
Appeals for the Tenth Circuit on February 17, 2022,
the minimum wage requirements of the final rule
implementing Executive Order 14026 are not
currently being enforced as to ‘‘contracts or
contract-like instruments entered into with the
federal government in connection with seasonal
recreational services or seasonal recreational
equipment rental for the general public on federal
lands.’’ The final rule’s requirements remain in
effect for all other contracts subject to the rule.
3 In 1988, the reference base for the CPI–W was
changed from 1967=100 to 1982–84=100. The
1982–84 period was chosen to coincide with the
updated expenditure weights which were based on
the Consumer Expenditure Surveys for the years
1982, 1983 and 1984.
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59469
W for the preceding year—257.0463—
which consists of the first two quarters
of 2021 and the last two quarters of 2020
(i.e., July 2020 through June 2021).
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 7.871
percent ((277.2779 ÷ 257.0463)—1). The
Department then applied that annual
percentage increase of 7.871 percent to
the current Executive Order hourly
minimum wage rate of $11.25, which
resulted in a wage rate of $12.135
(($11.25 × 0.07871) + $11.25); however,
pursuant to the Executive Order, that
rate must be rounded to the nearest
multiple of $0.05.
The new Executive Order 13658
minimum wage rate that must generally
be paid to workers performing on or in
connection with covered contracts
beginning January 1, 2023 is therefore
$12.15 per hour. A poster reflecting this
new Executive Order 13658 minimum
wage rate is set forth at Appendix B.
IV. The 2022 Executive Order 13658
Minimum Cash Wage for Tipped
Employees
As noted above, section 3 of Executive
Order 13658 provides a methodology to
determine the amount 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 13658 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 13658 minimum wage.
Seventy percent of the new Executive
Order 13658 minimum wage rate of
$12.15 is $8.505 ($12.15 × 0.70).
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,
2023, is therefore $8.50 per hour.
V. Appendix
The Appendix to this notice provides
a chart of the CPI–W data published by
BLS that the Department used to
calculate the new Executive Order
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Federal Register / Vol. 87, No. 189 / Friday, September 30, 2022 / Notices
13658 minimum wage rate based on the
methodology explained herein.
(CPI–W) (United States city average, all
items, not seasonally adjusted).
Martin J. Walsh,
Secretary of Labor.
Appendix A: Data Used to Determine
Executive Order 13658 Minimum Wage
Rate Effective January 1, 2023
Data Source: Consumer Price Index for
Urban Wage Earners and Clerical Workers
Quarter 3
2020Q3 to
2021Q2 ..........
2021Q3 to
2022Q2 ..........
Annual Percentage Increase ..
Quarter 4
Quarter 1
Quarter 2
252.636
253.597
254.004
254.076
253.826
254.081
255.296
256.843
258.935
261.237
263.612
266.412
257.0463
267.789
268.387
269.086
271.552
273.042
273.925
276.296
278.943
283.176
284.575
288.022
292.542
277.2779
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
7.871%
Appendix B: Updated Version of the
Executive Order 13658 Poster
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59471
The law requires certalnfederal contractors to display thls poster where employees can easily see it.
MINIMUM WAGE Federal construction and .service contracts are generally subject to a
minimum wage rafe under either Executive Order (EO) 13658 or EO
14026.
• If the contract was entered into on or between January 1, 2015 and
January 29, 2022, EO 13658 generally requires that workers be paid
at least $12.15 per hour for all time spent performing on or in
connection with the contract in calendar year 2023.
• lfthe•contract is renewed or extended on or after January 30, 2022,
or a new contract is entered into on or after January 30, 2022, EO
14026 generally requires that workers be paid at least $16.20 per
hour for all time spent performing on or in connectton with the
contract in calendar year 2023.
EXCLUSIONS
• The EO minimum wage may not apply to some workers who provide
support in connection with covered federal contracts for less than 20
percent of their hours worked in a week.
• The EO minimum wage may not apply to certain other occupations and
workers.
ENFORCEMENT The U.S. Department of Labor's Wage and Hour Division (WHD) is
responsible for enforcing this law. WHO can answer questions about yom·
workplace rights and protections, investigate employers, and recover back
wages. All WHD services are free and confidential. Employers cannot
retaliate or discriminate against someone who files a complaint or
participates in an investigation. WHD will accept a complaint in any
language. You can find your nearest WHD office at
https:/lwww.dol.gov/whd/local/ or call toll-free 1 (866) 4US-WAGE (1-86648709243). We do not ask workers about their immigration status. We can
help.
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• Workers with disabilities must be paid at least the EO minimum wage
rate for time spent performing on or in connection with covered
contracts.
• Some state or local laws may provide greater worker protections and
employers must follow the law that requires the htghest rate of pay.
" More information. about the EO minimum wage is avaitabte at:
www. doLgov/whd/flsa/eo13658.
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ADDITIONAL
INFORMATION
59472
Federal Register / Vol. 87, No. 189 / Friday, September 30, 2022 / Notices
Open.
Don Millard,
National Science Foundation, 2415
Eisenhower Avenue, Alexandria, VA
22314; Telephone: (703) 292–8300.
Additional meeting information, an
updated agenda, and registration
information will be available on the AC
website at https://www.nsf.gov/eng/
advisory.jsp.
PURPOSE OF MEETING: To provide
advice, recommendations and counsel
on major goals and policies pertaining
to engineering programs and activities.
TYPE OF MEETING:
[FR Doc. 2022–20905 Filed 9–29–22; 8:45 am]
CONTACT PERSONS:
BILLING CODE 4510–27–C
NATIONAL LABOR RELATIONS
BOARD
Sunshine Act Meetings Notice
Each Wednesday of
every month through Fiscal Year 2023 at
2:00 p.m. Changes in date and time will
be posted at www.nlrb.gov.
PLACE: Meetings will be held via
videoconferencing technology. If Board
meetings resume in person, the Board
will meet in the Board Agenda Room,
No. 5065, 1015 Half St. SE, Washington,
DC. Any in-person meetings will be
noted at www.nlrb.gov.
STATUS: Closed.
MATTERS TO BE CONSIDERED: Pursuant to
§ 102.139(a) of the Board’s Rules and
Regulations, the Board or a panel
thereof will consider ‘‘the issuance of a
subpoena, the Board’s participation in a
civil action or proceeding or an
arbitration, or the initiation, conduct, or
disposition . . . of particular
representation or unfair labor practice
proceedings under section 8, 9, or 10 of
the [National Labor Relations] Act, or
any court proceedings collateral or
ancillary thereto.’’ See also 5 U.S.C.
552b(c)(10).
FOR FURTHER INFORMATION CONTACT:
Roxanne L. Rothschild, Executive
Secretary, 1015 Half Street SE,
Washington, DC 20570. Telephone:
(202) 273–1940.
DATES AND TIME:
Submitted by
Dated: September 28, 2022.
Roxanne L. Rothschild,
Executive Secretary, National Labor Relations
Board.
Agenda
Tuesday, October 25, 2022; 11:00 a.m.–
6:00 p.m. (Eastern)
Directorate for Engineering Report
NSF Budget Update
NSF and the CHIPS and Science Act
Advanced Manufacturing
Engineering Research at Diverse
Institutions
Overview of the ENG Office of Emerging
Frontiers and Multidisciplinary
Activities (EFMA)
Committee of Visitors Report on EFMA
Strategic Recommendations for ENG
Wednesday, October 26, 2022; 9:00
a.m.–2:00 p.m. (Eastern)
Engineering Education and Workforce
Training
Preparation for Discussion with the
Director’s Office
Perspective from the Director’s Office
Engineering Research Centers
Strategic Recommendations for ENG
Dated: September 26, 2022.
Crystal Robinson,
Committee Management Officer.
[FR Doc. 2022–21190 Filed 9–29–22; 8:45 am]
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[FR Doc. 2022–21377 Filed 9–28–22; 11:15 am]
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OFFICE OF PERSONNEL
MANAGEMENT
NATIONAL SCIENCE FOUNDATION
Submission for Review: 3206–0182,
Optional Form 306 (OF 306)
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Advisory Committee for Engineering;
Notice of Meeting
In accordance with the Federal
Advisory Committee Act (Pub. L. 92–
463, as amended), the National Science
Foundation (NSF) announces the
following meeting:
NAME AND COMMITTEE CODE: Advisory
Committee for Engineering (#1170).
DATE AND TIME:
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(Eastern)
October 26, 2022; 9:00 a.m.–2:00 p.m.
(Eastern)
PLACE: NSF, 2415 Eisenhower Avenue,
Alexandria, VA 22314/Virtual.
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Office of Personnel
Management.
ACTION: 30-Day Notice and request for
comments.
AGENCY:
The Office of Personnel
Management (OPM), Suitability
Executive Agent Programs, is notifying
the general public and Federal agencies
that OPM proposes to request the Office
of Management and Budget (OMB)
renew a previously-approved
information collection, Optional Form
306 (OF 306).
DATES: Comments are encouraged and
will be accepted until October 31, 2022.
SUMMARY:
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Written comments and
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notice to https://www.reginfo.gov/
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Optional Form 306 (OF 306). The
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other forms of information technology,
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of responses.
ADDRESSES:
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]]>Agencies
[Federal Register Volume 87, Number 189 (Friday, September 30, 2022)]
[Notices]
[Pages 59468-59472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-20905]
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Wage and Hour Division
Minimum Wage for Federal Contracts Covered by Executive Order
13658, Notice of Rate Change in Effect as of January 1, 2023
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,
Establishing a Minimum Wage for Contractors (the Executive Order or the
order), beginning January 1, 2023. Beginning on that date, the
Executive Order 13658 minimum wage rate that generally must be paid to
workers performing work on or in connection with covered contracts will
increase to $12.15 per hour, while 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 $8.50 per hour.
Covered contracts that are entered into on or after January 30, 2022,
or that are renewed or extended (pursuant to an option or otherwise) on
or after January 30, 2022, are generally subject to a higher minimum
wage rate established by Executive Order 14026 of April 27, 2021,
Increasing the Minimum Wage for Federal Contractors.
DATES: These new Executive Order 13658 rates shall take effect on
January 1, 2023.
FOR FURTHER INFORMATION CONTACT: Amy DeBisschop, 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). Alternative formats are available upon request by calling
1-866-487-9243. If you are deaf, hard of hearing, or have a speech
disability, please dial 7-1-1 to access telecommunications relay
services.
SUPPLEMENTARY INFORMATION:
I. Executive Order 13658 Background and Requirements for Determining
Annual Increases to the Minimum Wage Rate
Executive Order 13658 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 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.
Executive Order 13658 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)(2), explain
that the applicable minimum wage determined by the Secretary for each
calendar year shall be:
Not less than the amount in effect on the date of such
determination;
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
Rounded to the nearest multiple of $0.05.
Section 2(b) of Executive Order 13658 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 the 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 the 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, Executive Order 13658 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), https://www.wdol.gov, or any
successor site; \1\ 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).
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\1\ WDOL.gov has since moved to https://sam.gov/content/wage-determinations. This website is the authoritative and single website
for obtaining appropriate Service Contract Act and Davis-Bacon Act
wage determinations for each official contract action.
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Section 3 of Executive Order 13658 requires contractors to pay
tipped employees covered by the order performing on or in connection
with covered contracts an hourly cash wage
[[Page 59469]]
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. When a contractor
is using a tip credit to meet a portion of its wage obligations under
the Executive Order, 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 13658 minimum wage and the cash wage required
for tipped employees are currently $11.25 and $7.90 per hour,
respectively. The Department announced these rates on September 15,
2021, and the rates took effect on January 1, 2022. 86 FR 51683
II. Effect of Executive Order 14026
On April 27, 2021, President Joseph R. Biden, Jr. signed Executive
Order 14026, Increasing the Minimum Wage for Federal Contractors. 86 FR
22835. Executive Order 14026 establishes a higher hourly minimum wage
of $15.00 per hour, beginning on January 30, 2022, and, beginning
January 1, 2023, and annually thereafter, an amount determined by the
Secretary in accordance with the order. This higher hourly minimum wage
applies to the same types of contracts with the Federal Government that
are covered by Executive Order 13658. However, Executive Order 14026
only applies to contracts with the Federal Government that are entered
into on or after January 30, 2022, or that are renewed or extended
(pursuant to an exercised option or otherwise) on or after January 30,
2022. For some amount of time, the Department therefore anticipates
that there will be some existing contracts with the Federal Government
that do not qualify as a covered ``new contract'' for purposes of
Executive Order 14026 and thus will remain subject to the minimum wage
requirements of Executive Order 13658.
The Department anticipates that, in the relatively near future,
essentially all covered contracts with the Federal Government will
qualify as ``new'' contracts under Executive Order 14026 and be subject
to its higher minimum wage rate. Until such time, however, Executive
Order 13658 and its regulations at 29 CFR part 10 must remain in place.
Accordingly, the Department will continue announcing annual updates to
Executive Order 13658's minimum wage rates for existing contracts still
covered by Executive Order 13658.\2\
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\2\ Based on an order issued by the U.S. Court of Appeals for
the Tenth Circuit on February 17, 2022, the minimum wage
requirements of the final rule implementing Executive Order 14026
are not currently being enforced as to ``contracts or contract-like
instruments entered into with the federal government in connection
with seasonal recreational services or seasonal recreational
equipment rental for the general public on federal lands.'' The
final rule's requirements remain in effect for all other contracts
subject to the rule.
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III. The 2022 Executive Order 13658 Minimum Wage Rate
Using the methodology set forth in Executive Order 13658 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 13658 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 13658 minimum wage rate
beginning January 1, 2023, the Department 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 2022 and the last
two quarters of 2021 (i.e., July 2021 through June 2022). This produced
an average index level of 277.2779.\3\ The Department then compared
that data to the average CPI-W for the preceding year--257.0463--which
consists of the first two quarters of 2021 and the last two quarters of
2020 (i.e., July 2020 through June 2021). 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 7.871 percent ((277.2779 / 257.0463)--1). The Department then
applied that annual percentage increase of 7.871 percent to the current
Executive Order hourly minimum wage rate of $11.25, which resulted in a
wage rate of $12.135 (($11.25 x 0.07871) + $11.25); however, pursuant
to the Executive Order, that rate must be rounded to the nearest
multiple of $0.05.
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\3\ In 1988, the reference base for the CPI-W was changed from
1967=100 to 1982-84=100. The 1982-84 period was chosen to coincide
with the updated expenditure weights which were based on the
Consumer Expenditure Surveys for the years 1982, 1983 and 1984.
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The new Executive Order 13658 minimum wage rate that must generally
be paid to workers performing on or in connection with covered
contracts beginning January 1, 2023 is therefore $12.15 per hour. A
poster reflecting this new Executive Order 13658 minimum wage rate is
set forth at Appendix B.
IV. The 2022 Executive Order 13658 Minimum Cash Wage for Tipped
Employees
As noted above, section 3 of Executive Order 13658 provides a
methodology to determine the amount 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 13658 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 13658 minimum
wage. Seventy percent of the new Executive Order 13658 minimum wage
rate of $12.15 is $8.505 ($12.15 x 0.70). 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, 2023, is
therefore $8.50 per hour.
V. Appendix
The Appendix to this notice provides a chart of the CPI-W data
published by BLS that the Department used to calculate the new
Executive Order
[[Page 59470]]
13658 minimum wage rate based on the methodology explained herein.
Martin J. Walsh,
Secretary of Labor.
Appendix A: Data Used to Determine Executive Order 13658 Minimum Wage
Rate Effective January 1, 2023
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
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2020Q3 to 2021Q2..... 252.636 253.597 254.004 254.076 253.826 254.081 255.296 256.843 258.935 261.237 263.612 266.412 257.0463
2021Q3 to 2022Q2..... 267.789 268.387 269.086 271.552 273.042 273.925 276.296 278.943 283.176 284.575 288.022 292.542 277.2779
Annual Percentage ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ 7.871%
Increase............
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Appendix B: Updated Version of the Executive Order 13658 Poster
BILLING CODE 4510-27-P
[[Page 59471]]
[GRAPHIC] [TIFF OMITTED] TN30SE22.001
[[Page 59472]]
[FR Doc. 2022-20905 Filed 9-29-22; 8:45 am]
BILLING CODE 4510-27-C
