Government Contractors: Minimum Wage Increase Approaching

Federal government contractors comprise a significant portion of our national economy. In fact, over $500 billion was spent by the federal government on contractors in 2018. Looking at the D.C.-Metro area alone, government contractor employers dominate job opportunities, second to only the federal government itself.

I recently wrote about the Department of Labor’s increase to the overtime threshold, which takes effect on January 1, 2020 for all employers. Government contractors should similarly be aware of the upcoming increase to the minimum wage for its employees. The Department of Labor’s rule change increases the minimum wage for government contractors from $10.60 to $10.80, effective January 1, 2020.

While seemingly small, this increase must be adhered to. Employers that do not adjust affected employees’ wages face significant penalties from the Department of Labor and liability for damages from the employees themselves. I recommend updating policies and working with your payroll team now rather than waiting until late December. Feel free to reach out to me discuss.