DOL Increases Hourly Minimum Wage to $17.20 for Federal Contractors Starting January 1, 2024

Posted by National Alliance for Fair Contracting on

JD Supra
October 4, 2023

Beginning on January 1, 2024, Executive Order 14026 (Order) will raise the minimum wage for workers performing work on or in connection with covered contracts to from $16.20 to $17.20 per hour, a second year of a significant adjustment to the minimum wage for service and construction workers doing work on federal projects. Government contractors in the service and construction sectors should evaluate how the minimum wage increase will affect their operations and pricing strategies when bidding on new government contracts.

The Evolution of Federal Contract Minimum Wage

This Order builds upon the foundation laid by Executive Order 13658, which initially established a minimum wage of $10.10 per hour for federal contract workers in 2014. Since then, the minimum wage has seen incremental increases. In 2021, the Biden administration issued Executive Order 14026, adjusting the wage upward to $15.00 per hour with annual adjustments issued by the Department of Labor (DOL) each calendar year, and which automatically become effective on January 1.

Who Is Affected by Executive Order 14026?

The Order broadly affects federal contracts and subcontracts and applies to:

  1. contracts subject to the Davis-Bacon Act (DBA), governing wage rates on federal construction projects and
  2. contracts covered by the Service Contract Act (SCA), which regulates service contracts.

Compliance and Enforcement

  1. The DOL is responsible for enforcing compliance with the Order. Contractors found to be in violation may face penalties, including the withholding of contract funds.
  2. Contractors are required to maintain comprehensive records of employees’ wages, hours worked, and other relevant data related to covered contracts, facilitating the enforcement of the order.
  3. Federal Acquisition Regulation (FAR) 52.222-55, Minimum Wages for Contractors Under Executive Order 14026 (distinguished from the former FAR provision with the same number but a different name) should have been modified into applicable contracts or subcontracts that were solicited, renewed, or extended after January 31, 2022.
  4. From the effective date of the modification that incorporated the new provision through December 31, 2022, the applicable minimum wage was $15.00 per hour.
  5. Effective January 1, 2023, the minimum wage became $16.20 per hour. The DOL may issue increases to the minimum wage that will be effective each year on January 1.
  6. At this point, a contract for services or construction should contain the new FAR clause. If it does not, the obligation to pay the higher minimum wage does not apply. However, to avoid possible investigations by the DOL and disgruntled employees, we recommend bringing the issue to the attention of the contracting officer or prime contractor immediately and retroactively applying the wage requirements.
  7. You may request a price adjustment for the actual difference in wages and fringe benefits you have to pay as a result of a change, and you should do so within thirty (30) days of the change in wage rate.
  8. This requirement applies to non-exempt workers on contracts subject to the DBA and SCA, as well as any non-exempt employee working in connection with a covered contract.

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For the first time, Philly enforces its wage theft law by suing an employer who stiffed workers

Posted by National Alliance for Fair Contracting on

The Philadelphia Inquirer
by Juliana Feliciano Reyes
Apr 5, 2023

The lawsuit, against Joe Carvalho of Carvalho Construction, represents an escalation of the city’s efforts to enforce wage theft violations.

For the first time in seven years, the City of Philadelphia has sued an employer who broke the city’s wage theft law.

The lawsuit represents an escalation of the city’s efforts to enforce its 2016 wage theft law. In some cases, it can take years for workers to get paid after they win a wage theft claim; some never get paid at all.

The Law Department, which hired a dedicated attorney last spring to handle these kinds of cases for the Department of Labor’s Office of Worker Protections, has begun taking legal action “to force bad actors into compliance,” a spokesperson for the Office of Worker Protections said in a statement. Lawsuits are “an avenue of last resort,” the spokesperson said.

Bad actors are employers that broke the law but refuse to comply with city orders and pay workers what they’re owed. More than 90% of employers that have broken the law comply, the spokesperson said.

The city filed a complaint in Common Pleas Court earlier this year against Joe Carvalho, a Philadelphia construction company owner who the city says broke its wage theft law twice.

In March 2021, Carvalho didn’t pay an employee for eight days of work, owing him $1,105 in wages and overtime, a city investigation found. Carvalho had said he would pay the worker $130 per day.

The following month, the worker repeatedly asked for his pay and Carvalho ignored the texts or “responded with curse words,” according to a city violation notice.

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Report: Labor cites 526 Jobs Act violations, imposes $106,450 of fines (WV)

Posted by National Alliance for Fair Contracting on

By Phil Kabler
10/23/19

CHARLESTON – In the 2018-19 budget year, the Division of Labor cited 526 violations of the Jobs Act, fining contractors a total of $106,450, according to a report to the West Virginia Legislature.

Enacted in 2001, the Jobs Act is intended to assure that 75% of jobs on state-funded public works projects go to local workers. It authorizes the Division of Labor to impose fines of up to $100 a day on employers who knowingly violate the act.

A legislative audit released in June concluded that the Jobs Act has been largely ineffective, in part because in order to comply with federal law, local markets were defined to include out-of-state counties that are within 50 miles of the West Virginia line.

The audit found that means workers residing in 150 counties surrounding West Virginia, with a total population of 17.3 million people, are considered part of the local market area. The local market includes the major metropolitan areas of Pittsburgh and Washington, D.C.

“In terms of general population, West Virginia makes up 9.5% of the local labor market,” the audit noted.

The audit also concluded that the Division of Labor receives no additional funding for Jobs Act compliance, and relies on 18 inspectors statewide to enforce the act – along with multiple other regulations that the inspectors enforce.

According to the report to the Legislature, Labor inspectors conducted 338 Jobs Act field inspections in 2018-19 and reviewed employment and payroll records for 1,943 construction projects.

While the majority of projects in the report were listed as in compliance with the Jobs Act, contractors and projects cited as being out of compliance were:

-S&D Industrial Painting of Tarpon Springs, Florida, six citations on a Division of Highways project in Nicholas County.
-HVB ICF Contractors of Gay Mills, Wisconsin, on a Mercer County Board of Education project.
-Southern Trades of Louisville, Kentucky, on a Doddridge County Board of Education project.
-Bonsai Design of Grand Junction, Colorado, on a Division of Natural Resources project in Summers County.
-KVK Contractors of Tarpon Springs, Florida, on a West Virginia Parkways project in Kanawha County.
-Oglesby Construction of Norwalk, Ohio, on a West Virginia Parkways project in Mercer County.

Additionally, 20 employers requested 353 Jobs Act waivers and were granted waivers for 341 workers.

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U.S. Department of Labor Recovers $14.3 Million for Hurricane Recovery Workers (Puerto Rico)

Posted by National Alliance for Fair Contracting on

By Source Staff – September 25, 2018

In the year since hurricanes Irma and Maria struck Puerto Rico and the U.S. Virgin Islands, the U.S. Department of Labor’s Wage and Hour Division (WHD) has recovered $14,337,657 in unpaid wages for 7,761 employees engaged in recovery work in these territories. WHD has also undertaken significant outreach activities to educate employers and employees about compliance with federal wage laws as part of its ongoing hurricane response efforts.

Following the hurricanes, WHD began a broad-based education and enforcement initiative providing information to employers and workers via social media, and by conducting outreach. Investigations focused on compliance during short-term emergency response operations funded through the Federal Emergency Management Agency (FEMA) to ensure employers were aware of their responsibilities and employees were paid.

The investigations examined coverage under an employer’s compliance with the Service Contract Act (SCA), Contract Work Hours and Safety Standards Act (CWHSSA), Davis Bacon and Related Acts (DBRA), and the Fair Labor Standards Act (FLSA).

WHD investigators found violations that included non-payment of wages, minimum wage and overtime violations resulting from employees being misclassified as independent contractors, and failure to pay required health and welfare benefits under the SCA.

WHD has conducted more than 60 outreach events; signed memorandums of understanding (MOUs) with Puerto Rico’s Department of Labor and its Office of the Comptroller to better coordinate enforcement and outreach efforts; and hosted a prevailing wage seminar to educate contractors, government agencies, and other stakeholders about compliance with applicable laws.

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DOUGHERTY: Enforce the laws protecting workers (CO)

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BY MICHAEL DOUGHERTY
JAN 27, 2018

No one who works should be paid less than what they are owed. As Pueblo’s economy bounces back, protecting the workforce fueling our economy is now more important than ever. Colorado’s attorney general can and should play a key role in that vital effort because our labor force is the cornerstone of economic strength.

Other states have shown us the value of having an attorney general who enforces the rules and standards that guarantee basic employment rights. As attorney general, I pledge to engage the personnel and resources of my office to protect Colorado’s workforce.

Colorado’s workers are entitled to the right to be paid for a day’s work; the right to receive the minimum wage and any overtime pay or tips that are earned; the right to full payment of promised wages, without illegal deductions; and the right to have state and federal labor standards enforced.

As Coloradans, we have recognized how important these principles are. In 2016, Coloradans voted to raise the state’s minimum wage, with increases implemented over the next three years that far surpass the federal minimum wage — although it is still not enough for a lot of families. In 2014, the governor authorized the Wage Protection Act, giving the Colorado Department of Labor and Employment a better enforcement process to help employees who are denied their rightful wages. And last year, we passed a law requiring wage theft transparency, so that information is now available to the public about employers who are cited for stealing wages.

But there is much more to be done to ensure that our workforce is treated fairly. Coloradans are subjected to an estimated $750 million in wage theft every year. CDLE is on the frontline of this problem, handling the hundreds of individual wage complaints filed every year. But to truly advance fair treatment in Colorado’s workplaces, we need to take action on the broader problems affecting whole sectors of workers. Large portions of our workforce like those employed in the retail, restaurant, hotel and construction industries are particularly vulnerable to violations of labor laws.

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Contractor fined $189K for OR bridge safety violations

Posted by National Alliance for Fair Contracting on

Kim Slowey
June 21, 2017

Dive Brief:

  • The Oregon Occupational Safety and Health Administration (OSHA) has fined a Minnesota contractor $189,000 and issued the company nine safety violations related to worker injuries on a Portland, OR, bridge project, according to KGW.com.
  • Oregon OSHA said contractor Abhe & Svoboda did not provide adequate fall protection for workers prior to an incident in which a worker fell 37 feet from the bridge and landed on another individual, injuring them both.
  • Company officials allegedly tried to justify their lack of compliance with Oregon’s safety rules by arguing that the rules change too often. The agency cited the company with two willful and seven serious violations.

Dive Insight:

While construction work in general is inherently dangerous, bridge work can be especially risky, as many employees are consistently working at elevated heights. In November, the Pennsylvania Department of Transportation charged contractor Joseph B. Fay Co. $3.3 million for damages related to a fire that erupted on the Liberty Bridge in Pittsburgh while Fay was working there.

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DIR Launches Roofing Compliance Working Group

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OAKLAND, Calif., Sept. 3, 2013 /PRNewswire-USNewswire/ — The Department of Industrial Relations (DIR) today officially launches the Roofing Compliance Working Group to enforce safety and labor law standards in this key industry in California.

The Roofing Compliance Working Group (RCWG) is an arm of the Labor Enforcement Task Force (LETF), a multi-agency effort to combat the underground economy and improve the state’s business environment. RCWG is a collaboration of state and local agencies as well as labor and management. The group’s objectives include rapid response to complaints of workplace health and safety hazards in the roofing industry, as well as investigation of complaints related to payroll, misclassification and workers’ compensation issues.

“The roofing industry by nature comes with inherent risks, and we want to improve workplace safety for workers and help business owners who play by the rules to thrive,” said DIR Director Christine Baker.

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