Minimum Wage for Federal Contracts Covered by Executive Order 13658, Notice of Rate Change in Effect as of January 1, 2025, 79641-79644 [2024-22099]
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Federal Register / Vol. 89, No. 189 / Monday, September 30, 2024 / Notices
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[FR Doc. 2024–22285 Filed 9–27–24; 8:45 am]
BILLING CODE 4410–18–P
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DEPARTMENT OF LABOR
Employment and Training
Administration
Workforce Innovation and Opportunity
Act Native American Employment and
Training Council
Employment and Training
Administration, U.S. Department of
Labor.
ACTION: Notice of meeting.
AGENCY:
Pursuant to section 10(a)(2) of
the Federal Advisory Committee Act
(FACA), as amended, and section
166(i)(4) of the Workforce Innovation
and Opportunity Act (WIOA), notice is
hereby given of the next meeting of the
Native American Employment and
Training Council (NAETC or Council),
as constituted under WIOA.
DATES: The meeting will begin at 1 p.m.,
(Pacific time) on Tuesday, October 29,
2024, and continue until 5 p.m. (Pacific
time). The meeting will reconvene at 10
a.m. (Pacific time), on Wednesday,
October 30, 2024, and adjourn at 4 p.m.
(Pacific time). The period from 1 p.m. to
2 p.m., on Wednesday, October 30,
2024, is reserved for participation and
comment by members of the public.
ADDRESSES: The meeting will be held in
person in the at the MGM Grand, 3799
S Las Vegas Blvd., Las Vegas, NV 89109.
The meeting will also be accessible
virtually. To join the meeting use the
following URLs:
SUMMARY:
October 29, 2024
https://thegateam.webex.com/
thegateam/j.php?MTID=m74feb
877bd8079f53609e004154d6e81
Meeting number: 2340 979 4955
Password: 1005
Join by phone
1–844–992–4726 United States Toll Free
1–408–418–9388 United States Toll
Access code: 2340 979 4955
October 30, 2024
https://thegateam.webex.com/
thegateam/j.php?MTID=med861
edd0453fafce35e87ba9e223f19
Meeting number: 2347 189 3020
Password: 1005
Join by phone
1–844–992–4726 United States Toll Free
1–408–418–9388 United States Toll
Access code: 2347 189 3020
FOR FURTHER INFORMATION CONTACT:
Nathaniel Coley, Designated Federal
Officer, Division of Indian and Native
American Programs, Employment and
Training Administration, U.S.
Department of Labor, Room S–4209, 200
Constitution Avenue NW, Washington,
DC 20210. Telephone number (202)
PO 00000
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79641
693–4287 (VOICE) (this is not a toll-free
number) or chief.dinap@dol.gov.
SUPPLEMENTARY INFORMATION:
Council members and members of the
public are encouraged to logon to the
link provided early to allow for
connection issues and troubleshooting.
The meeting will be open to the
public. Members of the public not
present may submit a written statement
by Friday, October 25, 2024, to be
included in the record of the meeting.
Statements are to be submitted to the
U.S. Department of Labor Division of
Indian and Native American Programs
(DINAP) at DINAP@dol.gov. Persons
who need special accommodations
should contact Nathaniel Coley at 202–
693–4287 or chief.dinap@dol.gov, two
business days before the meeting. The
formal agenda will focus on the
following main topics: (1) Updates from
the Employment and Training
Administration; (2) NAETC workgroup
updates; (3) DINAP updates; and (4)
public comment.
José Javier Rodrı́guez,
Assistant Secretary for Employment and
Training, Labor.
[FR Doc. 2024–22244 Filed 9–27–24; 8:45 am]
BILLING CODE 4510–FR–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, 2025
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, 2025.
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
$13.30 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 $9.30 per
hour. Covered contracts that are entered
into on or after January 30, 2022, or that
are renewed or extended (pursuant to an
SUMMARY:
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Federal Register / Vol. 89, No. 189 / Monday, September 30, 2024 / Notices
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, 2025.
FOR FURTHER INFORMATION CONTACT:
Daniel Navarrete, 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:
ddrumheller on DSK120RN23PROD with NOTICES1
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 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
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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
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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
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 $12.90
and $9.05 per hour, respectively. The
Department announced these rates on
September 28, 2023, and the rates took
effect on January 1, 2024. See 88 FR
66903.
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
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. 89, No. 189 / Monday, September 30, 2024 / Notices
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 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
III. The 2025 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.
To determine the Executive Order
13658 minimum wage rate beginning
January 1, 2025, 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 2024
and the last two quarters of 2023 (i.e.,
July 2023 through June 2024). This
produced an average index level of
303.729.3 The Department then
compared that data to the average CPI–
W for the preceding year—294.367—
which consists of the first two quarters
of 2023 and the last two quarters of 2022
(i.e., July 2022 through June 2023).
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 3.180
percent ((303.279 ÷ 294.367) ¥1). The
Department then applied that annual
percentage increase of 3.180 percent to
the current Executive Order hourly
minimum wage rate of $12.90, which
resulted in a wage rate of $13.310
(($12.90 × 0.03180) + $12.90). Pursuant
to the Executive Order, that rate must be
rounded to the nearest multiple of
$0.05.
Accordingly, 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, 2025, is
$13.30 per hour.
IV. The 2025 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
Quarter 3
2022Q3 to 2023Q2
2023Q3 to 2024Q2
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Annual Percentage Increase ....
Quarter 4
V. Appendices
Appendix A to this notice provides a
chart of the CPI–W data published by
BLS that the Department used to
calculate the new Executive Order
13658 minimum wage rate based on the
methodology explained herein. A poster
reflecting the new Executive Order
13658 minimum wage rate will be
publicly available on the WHD website
on January 1, 2025.
Jessica Looman,
Administrator, Wage and Hour Division.
Appendix A: Data Used To Determine
Executive Order 13658 Minimum Wage
Rate
Effective January 1, 2025.
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
Quarter 2
Annual
average
292.219
299.899
291.629
301.551
291.854
302.257
293.003
302.071
292.495
301.224
291.051
300.728
293.565
302.201
295.057
304.284
296.021
306.502
297.730
307.811
298.382
308.163
299.394
308.054
294.367
303.729
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
3.180%
2 Based on an order issued by the U.S. District
Court for the Southern District of Texas on
September 26, 2023, the minimum wage
requirements of the final rule implementing
Executive Order 14026 are not currently being
enforced as to contracts or subcontracts to which
the states of Texas, Louisiana, or Mississippi
(including their agencies) are a party. Additionally,
due to a pair of orders issued by the U.S. Court of
Appeals for the Tenth Circuit, the requirements of
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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
$13.30 is $9.31 ($13.30 × 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, 2025, is therefore
$9.30 per hour.
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the final rule implementing Executive Order 14026
should not be applied 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,’’ if such contracts were entered into,
renewed, or extended between February 17, 2022
and August 16, 2024. The final rule’s requirements
remain in effect for all other contracts subject to
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Executive Order 14026 and its implementing
regulations.
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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[FR Doc. 2024–22099 Filed 9–27–24; 8:45 am]
BILLING CODE 4510–27–P
DEPARTMENT OF LABOR
Wage and Hour Division
Minimum Wage for Federal Contracts
Covered by Executive Order 14026,
Notice of Rate Change in Effect as of
January 1, 2025
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
14026, Increasing the Minimum Wage
for Federal Contractors (the Executive
Order or the order). Beginning on
January 1, 2025, the Executive Order
14026 minimum wage rate that
generally must be paid to workers
performing work on or in connection
with covered contracts will increase to
$17.75 per hour. This minimum wage
rate will apply to non-tipped and tipped
employees alike. Contracts similar to
those covered by Executive Order 14026
that were entered into, renewed, or
extended prior to January 30, 2022, are
generally subject to a lower minimum
wage rate established by Executive
Order 13658 of February 12, 2014,
Establishing a Minimum Wage for
Contractors.
DATES: The new Executive Order 14026
wage rate shall take effect on January 1,
2025.
FOR FURTHER INFORMATION CONTACT:
Daniel Navarrete, 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:
ddrumheller on DSK120RN23PROD with NOTICES1
SUMMARY:
I. Executive Order 14026 Background
and Requirements for Determining
Annual Increases to the Minimum
Wage Rate
On April 27, 2021, President Joseph
R. Biden, Jr. signed Executive Order
14026, ‘‘Increasing the Minimum Wage
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17:51 Sep 27, 2024
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for Federal Contractors.’’ 86 FR 22835.
In relevant part, Executive Order 14026
raised the hourly minimum wage paid
by Federal contractors to workers
performing work on or in connection
with certain covered Federal contracts
to $15.00 per hour, beginning January
30, 2022, with annual adjustments for
inflation thereafter in amounts
determined by the Secretary of Labor.
Id.
Executive Order 14026 directed the
Secretary to issue regulations to
implement the order’s requirements. See
86 FR 22836. Accordingly, after
engaging in notice-and-comment
rulemaking, the Department published a
final rule on November 24, 2021,
implementing Executive Order 14026.
See 86 FR 67126. The final regulations,
set forth at 29 CFR part 23, established
standards and procedures for
implementing and enforcing the
minimum wage protections of Executive
Order 14026.1
Executive Order 14026 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, 2023. See 86
FR 22835–36; see also 29 CFR
23.10(b)(2), 23.50(a)(2), 23.120(a).
Sections 2(a) and (b) of Executive Order
14026 establish the methodology that
the Secretary must use to determine the
annual inflation-based increases to the
minimum wage rate. See 86 FR 22835–
36. These provisions, which are
implemented in 29 CFR 23.50(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 14026
further provides that, in calculating the
1 Based on an order issued by the U.S. District
Court for the Southern District of Texas on
September 26, 2023, the minimum wage
requirements of the final rule implementing
Executive Order 14026 are not currently being
enforced as to contracts or subcontracts to which
the states of Texas, Louisiana, or Mississippi
(including their agencies) are a party. See Final
Rule: Increasing the Minimum Wage for Federal
Contractors (Executive Order 14026) | U.S.
Department of Labor (dol.gov) for further
information.
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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 86 FR
22835–36. To calculate the annual
percentage increase in the CPI–W, the
Department elected in its final rule
implementing Executive Order 14026 to
compare such CPI–W for the most
recent year available with the CPI–W for
the preceding year. See 29 CFR
23.50(b)(2)(iii). Consistent with the
regulations implementing Executive
Order 13658, see 29 CFR 10.5, 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.’’
86 FR 67167.
Once a determination has been made
with respect to the new minimum wage
rate, Executive Order 14026 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 86
FR 22835; 29 CFR 23.50(a)(2),
23.120(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
23.120(c)(2)(i). Additionally, the
regulations state that the Administrator
will provide notice of the Executive
Order minimum wage rate on https://
sam.gov/content/wage-determinations,
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 23.120(c)(2)(ii)–(iv).
Section 3 of Executive Order 14026
explains the application of the order to
tipped workers. 86 FR 22836. It
provides that for workers covered by
section 2 of the order who are tipped
employees pursuant to section 3(t) of
the FLSA, 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 an hour, beginning on January
E:\FR\FM\30SEN1.SGM
30SEN1
]]>Agencies
[Federal Register Volume 89, Number 189 (Monday, September 30, 2024)]
[Notices]
[Pages 79641-79644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-22099]
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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, 2025
AGENCY: Wage and Hour Division, Department of Labor.
ACTION: Notice.
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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, 2025. 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 $13.30 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 $9.30 per hour.
Covered contracts that are entered into on or after January 30, 2022,
or that are renewed or extended (pursuant to an
[[Page 79642]]
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, 2025.
FOR FURTHER INFORMATION CONTACT: Daniel Navarrete, 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 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 $12.90 and $9.05 per hour,
respectively. The Department announced these rates on September 28,
2023, and the rates took effect on January 1, 2024. See 88 FR 66903.
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
[[Page 79643]]
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 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. District Court for the
Southern District of Texas on September 26, 2023, the minimum wage
requirements of the final rule implementing Executive Order 14026
are not currently being enforced as to contracts or subcontracts to
which the states of Texas, Louisiana, or Mississippi (including
their agencies) are a party. Additionally, due to a pair of orders
issued by the U.S. Court of Appeals for the Tenth Circuit, the
requirements of the final rule implementing Executive Order 14026
should not be applied 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,'' if such contracts were
entered into, renewed, or extended between February 17, 2022 and
August 16, 2024. The final rule's requirements remain in effect for
all other contracts subject to Executive Order 14026 and its
implementing regulations.
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III. The 2025 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.
To determine the Executive Order 13658 minimum wage rate beginning
January 1, 2025, 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 2024 and the last two
quarters of 2023 (i.e., July 2023 through June 2024). This produced an
average index level of 303.729.\3\ The Department then compared that
data to the average CPI-W for the preceding year--294.367--which
consists of the first two quarters of 2023 and the last two quarters of
2022 (i.e., July 2022 through June 2023). 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 3.180 percent ((303.279 / 294.367) -1). The Department then applied
that annual percentage increase of 3.180 percent to the current
Executive Order hourly minimum wage rate of $12.90, which resulted in a
wage rate of $13.310 (($12.90 x 0.03180) + $12.90). 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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Accordingly, 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, 2025, is $13.30 per hour.
IV. The 2025 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 $13.30 is $9.31 ($13.30 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, 2025, is
therefore $9.30 per hour.
V. Appendices
Appendix A to this notice provides a chart of the CPI-W data
published by BLS that the Department used to calculate the new
Executive Order 13658 minimum wage rate based on the methodology
explained herein. A poster reflecting the new Executive Order 13658
minimum wage rate will be publicly available on the WHD website on
January 1, 2025.
Jessica Looman,
Administrator, Wage and Hour Division.
Appendix A: Data Used To Determine Executive Order 13658 Minimum Wage
Rate
Effective January 1, 2025.
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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2022Q3 to 2023Q2.............................................. 292.219 291.629 291.854 293.003 292.495 291.051 293.565 295.057 296.021 297.730 298.382 299.394 294.367
2023Q3 to 2024Q2.............................................. 299.899 301.551 302.257 302.071 301.224 300.728 302.201 304.284 306.502 307.811 308.163 308.054 303.729
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Annual Percentage Increase.................................. ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ 3.180%
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[[Page 79644]]
[FR Doc. 2024-22099 Filed 9-27-24; 8:45 am]
BILLING CODE 4510-27-P
