81 FR 64513 - Establishing a Minimum Wage for Contractors, Notice of Rate Change in Effect as of January 1, 2017
DEPARTMENT OF LABOR
Office of the Secretary Federal Register Volume 81, Issue 182 (September 20, 2016)
Office of the Secretary
Federal Register Volume 81, Issue 182 (September 20, 2016)
| Page Range | 64513-64517 | |
| FR Document | 2016-22515 |
[Federal Register Volume 81, Number 182 (Tuesday, September 20, 2016)] [Notices] [Pages 64513-64517] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-22515] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF LABOR Office of the Secretary Establishing a Minimum Wage for Contractors, Notice of Rate Change in Effect as of January 1, 2017 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 to be paid to workers performing work on or in connection with Federal contracts covered by Executive Order 13658, beginning January 1, 2017. Executive Order 13658, Establishing a Minimum Wage for Contractors (the Executive Order or the Order), was signed by President Barack Obama on February 12, 2014, and raised the hourly minimum wage paid by contractors to workers performing work on covered Federal contracts to: $10.10 per hour, beginning January 1, 2015; and beginning January 1, 2016, and annually thereafter, an amount determined by the Secretary of Labor (the Secretary) in accordance with the methodology set forth in the Order. See 79 FR 9851. The Secretary's determination of the Executive Order minimum wage rate also affects the minimum hourly cash wage that must be paid to tipped employees performing work on or in connection with covered contracts. See 79 FR 9851-52. The Secretary is required to provide notice to the public of the new minimum wage rate at least 90 days before such rate is to take effect. See 79 FR 9851. The applicable minimum wage under Executive Order 13658 is currently $10.15 per hour, in effect since January 1, 2016. See 80 FR 55646. The applicable minimum cash wage that generally must be paid to tipped employees performing work on or in connection with covered contracts is currently $5.85 per hour, in effect since January 1, 2016. Id. Pursuant to Executive Order 13658 and its implementing regulations at 29 CFR part 10, notice is hereby given that beginning January 1, 2017, the Executive Order minimum wage rate that generally must be paid to workers performing work on or in connection with covered contracts will increase to $10.20 per hour. Notice is also hereby given that, beginning January 1, 2017, 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 $6.80 per hour. DATES: This notice is effective on September 20, 2016. FOR FURTHER INFORMATION CONTACT: Robert Waterman, 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). Copies of this notice may be obtained in alternative formats (Large Print, Braille, Audio Tape, or Disc), upon request, by calling (202) 693-0023 (not a toll-free number). TTY/TTD callers may dial toll-free (877) 889-5627 to obtain information or request materials in alternative formats. SUPPLEMENTARY INFORMATION: I. Executive Order 13658 Background and Requirements for Determining Annual Increases to the Minimum Wage Rate Executive Order 13658 was signed by President Barack Obama on February 12, 2014, and raised the hourly minimum wage paid by contractors to workers performing work on or in connection with covered Federal contracts to $10.10 per hour, beginning January 1, 2015; and beginning January 1, 2016, and annually thereafter, 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. The Executive Order and its implementing regulations require the Secretary to determine the applicable minimum wage rate to be paid to 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), explain that the applicable minimum wage determined by the Secretary for each calendar year shall be: (i) Not less than the amount in effect on the date of such determination; (ii) 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 (iii) Rounded to the nearest multiple of $0.05. Section 2(b) of the Executive Order 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. In order to calculate the annual percentage increase in the CPI-W, the Department elected in its 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 its 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, in order ``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 to be paid to workers performing work on or in connection with covered contracts, the Executive Order 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 is to take effect. See 79 FR 9851; 29 CFR 10.5(a)(2), [[Page 64514]] 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 is to take 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), http://www.wdol.gov, or any successor site; 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). Section 3 of the Executive Order 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. At all times, 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. On September 16, 2015, the Administrator published a notice in the Federal Register informing the public that, effective January 1, 2016, the Executive Order minimum wage and the minimum cash wage required to be paid to tipped employees covered by the Executive Order would be $10.15 and $5.85 per hour, respectively. See 80 FR 55646. II. The 2017 Executive Order Minimum Wage Rate In accordance with the methodology set forth in the Executive Order 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 in order to determine the new Executive Order minimum wage rate. In calculating the annual percentage increase in the CPI, 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 current Executive Order minimum wage rate must then be increased by the resulting annual percentage change and rounded to the nearest multiple of $0.05. In order to determine the Executive Order minimum wage rate beginning January 1, 2017, the Department therefore 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 2016 and the last two quarters of 2015 (i.e., July 2015 through June 2016). The Department then compared that data to the average CPI-W for the preceding year, which consists of the first two quarters of 2015 and the last two quarters of 2014 (i.e., July 2014 through June 2015). 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 0.278%. The Department then applied that annual percentage increase of 0.278% to the current Executive Order hourly minimum wage rate of $10.15, which resulted in a wage rate of $10.18 (($10.15 x .00278) + $10.15); however, pursuant to the Executive Order, that rate must be rounded to the nearest multiple of $0.05. The new Executive Order minimum wage rate that must generally be paid to workers performing on or in connection with covered contracts beginning January 1, 2017 is therefore $10.20 per hour. III. The 2017 Executive Order Minimum Cash Wage for Tipped Employees As noted above, section 3 of the Executive Order 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 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). Section 3 of the Executive Order also provides a methodology to be utilized each year in determining the amount of the minimum hourly cash wage that must be paid to tipped employees performing on or in connection with covered contracts. Pursuant to the Order, in each succeeding year, beginning January 1, 2016, the required cash wage increases by $0.95 (or a lesser amount if necessary) until it reaches 70 percent of the Executive Order minimum wage rate. For subsequent years, the cash wage for tipped employees will be 70 percent of the Executive Order minimum wage rate rounded to the nearest $0.05. In order to determine the minimum hourly cash wage that must be paid to tipped employees performing on or in connection with covered contracts beginning January 1, 2017, the Department first calculated that 70 percent of the new Executive Order minimum wage rate of $10.20 is $7.14. The Executive Order provides that the current minimum hourly cash wage of $5.85 must increase by the lesser of $0.95 or the amount necessary for the hourly cash wage to equal 70 percent of the applicable Executive Order minimum wage. Because $0.95 is less than $1.29 (the amount necessary for the hourly cash wage to reach 70 percent of $10.20), the hourly cash wage must increase by $0.95. The new minimum hourly cash wage that must generally be paid to tipped workers performing on or in connection with covered contracts beginning January 1, 2017 is therefore $6.80 per hour. IV. Appendices Appendix A to this notice provides a comprehensive chart of the CPI-W data published by BLS that the Department utilized to calculate the new Executive Order minimum wage rate based on the methodology explained herein. Appendix B to this notice sets forth an updated version of the Executive Order 13658 poster that the Department published with its Final Rule, reflecting the updated wage rates that will be in effect beginning January 1, 2017. See 79 FR 60732-33. Pursuant to 29 CFR 10.29, contractors are required to notify all workers performing on or in connection with a covered contract of the applicable minimum wage rate under the Executive Order. Contractors with employees covered by the Fair Labor Standards Act who are performing on or in connection with a covered contract may satisfy the notice requirement by displaying the poster set forth in [[Page 64515]] Appendix B in a prominent or accessible place at the worksite. Dated: September 6, 2016. David Weil, Wage and Hour Administrator. Appendix A: Data Used To Determine Executive Order 13658 Minimum Wage Rate Effective January 1, 2017 Data Source: Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) (United States city average, all items, not seasonally adjusted) ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Quarter 3 Quarter 4 Quarter 1 Quarter 2 Annual Average ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 2014Q3 to 2015Q2................................. 234.525 234.030 234.170 233.229 231.551 229.909 228.294 229.421 231.055 231.520 232.908 233.804 232.0347 2015Q3 to 2016Q2................................. 233.806 233.366 232.661 232.373 231.721 230.791 231.061 230.972 232.209 233.438 234.444 235.308 232.6792 ---------------------------------------------------------------------------------------------------------------------------------------------- Annual Percentage Increase................... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... 0.278% ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 64516]] Appendix B: [GRAPHIC] [TIFF OMITTED] TN20SE16.026 [[Page 64517]] [FR Doc. 2016-22515 Filed 9-19-16; 8:45 am] BILLING CODE 4510-27-P
![Federal Register / Vol. 81, No. 182 / Tuesday, September 20, 2016 / Notices 64513
If additional information is required is currently $5.85 per hour, in effect Secretary to determine the applicable
contact: Jerri Murray, Department since January 1, 2016. Id. minimum wage rate to be paid to
Clearance Officer, United States Pursuant to Executive Order 13658 workers performing work on or in
Department of Justice, Justice and its implementing regulations at 29 connection with covered contracts on an
Management Division, Policy and CFR part 10, notice is hereby given that annual basis, beginning January 1, 2016.
Planning Staff, Two Constitution beginning January 1, 2017, the See 79 FR 9851; 29 CFR 10.1(a)(2),
Square, 145 N Street NE., Room Executive Order minimum wage rate 10.5(a)(2), 10.12(a). Sections 2(a) and (b)
3E.405B, Washington, DC 20530. that generally must be paid to workers of the Order establish the methodology
Dated: September 15, 2016. performing work on or in connection that the Secretary must use to determine
Jerri Murray, with covered contracts will increase to the annual inflation-based increases to
$10.20 per hour. Notice is also hereby the minimum wage rate. See 79 FR
Department Clearance Officer for PRA, U.S.
Department of Justice. given that, beginning January 1, 2017, 9851. These provisions, which are
the required minimum cash wage that implemented in 29 CFR 10.5(b), explain
[FR Doc. 2016–22549 Filed 9–19–16; 8:45 am]
generally must be paid to tipped that the applicable minimum wage
BILLING CODE 4410–13–P
employees performing work on or in determined by the Secretary for each
connection with covered contracts will calendar year shall be:
increase to $6.80 per hour. (i) Not less than the amount in effect
DEPARTMENT OF LABOR on the date of such determination;
DATES: This notice is effective on
September 20, 2016. (ii) Increased from such amount by
Office of the Secretary the annual percentage increase in the
FOR FURTHER INFORMATION CONTACT:
Establishing a Minimum Wage for Consumer Price Index for Urban Wage
Robert Waterman, Division of Earners and Clerical Workers (CPI–W)
Contractors, Notice of Rate Change in Regulations, Legislation, and
Effect as of January 1, 2017 (United States city average, all items,
Interpretation, Wage and Hour Division, not seasonally adjusted), or its successor
AGENCY: Wage and Hour Division, U.S. Department of Labor, Room S– publication, as determined by the
Department of Labor. 3502, 200 Constitution Avenue NW., Bureau of Labor Statistics (BLS); and
ACTION: Notice.
Washington, DC 20210; telephone: (202) (iii) Rounded to the nearest multiple
693–0406 (this is not a toll-free of $0.05.
SUMMARY: The Wage and Hour Division number). Copies of this notice may be Section 2(b) of the Executive Order
(WHD) of the U.S. Department of Labor obtained in alternative formats (Large further provides that, in calculating the
(the Department) is issuing this notice to Print, Braille, Audio Tape, or Disc), annual percentage increase in the CPI–
announce the applicable minimum upon request, by calling (202) 693–0023 W for purposes of determining the new
wage rate to be paid to workers (not a toll-free number). TTY/TTD minimum wage rate, the Secretary shall
performing work on or in connection callers may dial toll-free (877) 889–5627 compare such CPI–W for the most
with Federal contracts covered by to obtain information or request recent month, quarter, or year available
Executive Order 13658, beginning materials in alternative formats. (as selected by the Secretary prior to the
January 1, 2017. SUPPLEMENTARY INFORMATION: first year for which a minimum wage is
Executive Order 13658, Establishing a in effect) with the CPI–W for the same
Minimum Wage for Contractors (the I. Executive Order 13658 Background month in the preceding year, the same
Executive Order or the Order), was and Requirements for Determining quarter in the preceding year, or the
signed by President Barack Obama on Annual Increases to the Minimum preceding year, respectively. See 79 FR
February 12, 2014, and raised the hourly Wage Rate 9851. In order to calculate the annual
minimum wage paid by contractors to Executive Order 13658 was signed by percentage increase in the CPI–W, the
workers performing work on covered President Barack Obama on February Department elected in its Final Rule
Federal contracts to: $10.10 per hour, 12, 2014, and raised the hourly implementing the Executive Order to
beginning January 1, 2015; and minimum wage paid by contractors to compare such CPI–W for the most
beginning January 1, 2016, and annually workers performing work on or in recent year available with the CPI–W for
thereafter, an amount determined by the connection with covered Federal the preceding year. See 29 CFR
Secretary of Labor (the Secretary) in contracts to $10.10 per hour, beginning 10.5(b)(2)(iii). In its Final Rule, the
accordance with the methodology set January 1, 2015; and beginning January Department explained that it decided to
forth in the Order. See 79 FR 9851. The 1, 2016, and annually thereafter, an compare the CPI–W for the most recent
Secretary’s determination of the amount determined by the Secretary year available (instead of using the most
Executive Order minimum wage rate pursuant to the Order. See 79 FR 9851. recent month or quarter, as allowed by
also affects the minimum hourly cash The Executive Order directed the the Order) with the CPI–W for the
wage that must be paid to tipped Secretary to issue regulations to preceding year, in order ‘‘to minimize
employees performing work on or in implement the Order’s requirements. the impact of seasonal fluctuations on
connection with covered contracts. See See 79 FR 9852. Accordingly, after the Executive Order minimum wage
79 FR 9851–52. The Secretary is engaging in notice-and-comment rate.’’ 79 FR 60666.
required to provide notice to the public rulemaking, the Department published a Once a determination has been made
of the new minimum wage rate at least Final Rule on October 7, 2014 to with respect to the new minimum wage
90 days before such rate is to take effect. implement the Executive Order. See 79 rate to be paid to workers performing
See 79 FR 9851. The applicable work on or in connection with covered
sradovich on DSK3GMQ082PROD with NOTICES
FR 60634. The final regulations, set
minimum wage under Executive Order forth at 29 CFR part 10, established contracts, the Executive Order and its
13658 is currently $10.15 per hour, in standards and procedures for implementing regulations require the
effect since January 1, 2016. See 80 FR implementing and enforcing the Secretary to notify the public of the
55646. The applicable minimum cash minimum wage protections of the applicable minimum wage rate on an
wage that generally must be paid to Order. annual basis at least 90 days before any
tipped employees performing work on The Executive Order and its new minimum wage is to take effect.
or in connection with covered contracts implementing regulations require the See 79 FR 9851; 29 CFR 10.5(a)(2),
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[FR Doc. 2016–22515 Filed 9–19–16; 8:45 am] FOR FURTHER INFORMATION CONTACT: OMB authorization for an ICR cannot
BILLING CODE 4510–27–P Michel Smyth by telephone at 202–693– be for more than three (3) years without
4129, TTY 202–693–8064, (these are not renewal, and the current approval for
toll-free numbers) or by email at this collection is scheduled to expire on
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including a description of the likely employee or the employee’s • Evaluate the accuracy of the
respondents, proposed frequency of dependents. ERISA section agency’s estimate of the burden of the
response, and estimated total burden 701(f)(3)(B)(i)(II) requires the DOL to proposed collection of information,
may be obtained free of charge from the provide employers with model language including the validity of the
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www.reginfo.gov/public/do/ information on how an employee may • Enhance the quality, utility, and
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(this link will only become active on the resides for additional information collected; and
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or by contacting Michel Smyth by premium assistance, including how to collection of information on those who
telephone at 202–693–4129, TTY 202– apply for such assistance. ERISA section are to respond, including through the
693–8064, (these are not toll-free 701(f)(3)(B), PHSA section 2701(f)(3)(B), use of appropriate automated,
numbers) or by email at and Code section 9801(f)(3)(B) authorize electronic, mechanical, or other
DOL_PRA_PUBLIC@dol.gov. this information collection. See 29 technological collection techniques or
Submit comments about this request U.S.C. 1181(f)(3)(b), 42 U.S.C. 300gg– other forms of information technology,
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sradovich on DSK3GMQ082PROD with NOTICES
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Document Created: 2018-02-09 13:20:30
Document Modified: 2018-02-09 13:20:30
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Notice. | |
| Dates | This notice is effective on September 20, 2016. | |
| Contact | Robert Waterman, 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). Copies of this notice may be obtained in alternative formats (Large Print, Braille, Audio Tape, or Disc), upon request, by calling (202) 693-0023 (not a toll-free number). TTY/TTD callers may dial toll-free (877) 889-5627 to obtain information or request materials in alternative formats. | |
| FR Citation | 81 FR 64513 |
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