The Executive Order 14026 and Its Implication

The construction job is not for the weak; it is pretty demanding and energy-intensive. Therefore, it is expected that the contractors and workers are well remunerated. 

On the 22nd of November, 2021, the United States Department of Labor finally confirmed the rumors regarding the increment of minimum wage for federal contractors.

What is Executive Order 14026?

On the 27th of April, 2021, the president of the United States, Joe Biden, signed an order mandating the increase in the hourly wage of federal contractors and subcontractors. This order implies that the hourly wage would increase from a paltry amount of $ 10.95 to $15 for federal contractors and subcontractors starting from the 30th of January,2022. 

Also, starting from the 1st of January,2023, the DOL would determine the subsequent increment in hourly wages. So, it can be inferred that the hourly wages would keep increasing yearly.

But here comes this question- Does the executive order apply to all federal contractors or contracts? No, it doesn’t

What Are the Terms and Conditions of This Order?

First of all, for you to benefit from this new order as a contractor, there are terms and conditions in which you must follow or align with. 

The federal government contract must be performed in the United States and some of its colonies like Puerto Rico, the District of Columbia, and other US territories. Also, the contract be:

  • Covered by the Service Contract Act (SCA)
  • Covered and also obey the terms and conditions of the Davison-Bacon Act (DBA)

As expected, the new order accommodates concession contracts. Concession contracts are contracts whereby a contractor or its company has the full authority of the federal government to use its property or services in exchange for payment.

Meanwhile, the order does not cover grants, manufacturing contracts, or contracts not enshrined in the SCA or DBA. Also, it is essential to reiterate that these ‘contracts’ covered by these provisions would benefit from the order starting from the 30th of January,2022. The executive order also affects contracts that would run into or beyond the implementation date. Kindly see the Notice of Proposed Rulemaking (NPRM) document for more details on contracts eligibility.

Which Categories of Workers are Entitled to This New Minimum Wage?

Just like the previous executive order 13685, contractors whose contacts are covered by the SCA, DBA, or FLSA are entitled to this new increment.

The term’ worker’ refers to any contractor working on or in connection to the contracts covered by the acts mentioned above.

Finally, we advise that you keep yourself updated with the content of the new order and the subsequent release from the Department of Labor.

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