83 FR 44906 - Establishing a Minimum Wage for Contractors, Notice of Rate Change in Effect as of January 1, 2019

DEPARTMENT OF LABOR
Wage and Hour Division

Federal Register Volume 83, Issue 171 (September 4, 2018)

Page Range		44906-44909
FR Document		2018-19166

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, beginning January 1, 2019. Executive Order 13658, Establishing a Minimum Wage for Contractors (the Executive Order or the Order), 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 as determined by the Secretary of Labor (the Secretary) in accordance with the methodology set forth in the Order. The Secretary's determination of the Executive Order minimum wage rate also affects the minimum hourly cash wage for tipped employees performing work on or in connection with covered contracts. The Secretary is required to provide notice to the public of the new minimum wage rate at least 90 days before the rate takes effect. The applicable minimum wage under the Executive Order is currently $10.35 per hour, in effect since January 1, 2018. Pursuant to the Executive Order and its implementing regulations in the Code of Federal Regulations, notice is hereby given that beginning January 1, 2019, 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 $10.60 per hour. Notice is also hereby given that, beginning January 1, 2019, 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 $7.40 per hour.

Federal Register, Volume 83 Issue 171 (Tuesday, September 4, 2018)

[Federal Register Volume 83, Number 171 (Tuesday, September 4, 2018)]
[Notices]
[Pages 44906-44909]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2018-19166]

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DEPARTMENT OF LABOR

Wage and Hour Division

Establishing a Minimum Wage for Contractors, Notice of Rate
Change in Effect as of January 1, 2019

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,
beginning January 1, 2019.
Executive Order 13658, Establishing a Minimum Wage for Contractors
(the Executive Order or the Order), 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 as determined by
the Secretary of Labor (the Secretary) in accordance with the
methodology set forth in the Order. The Secretary's determination of
the Executive Order minimum wage rate also affects the minimum hourly
cash wage for tipped employees performing work on or in connection with
covered contracts. The Secretary is required to provide notice to the
public of the new minimum wage rate at least 90 days before the rate
takes effect. The applicable minimum wage under the Executive Order is
currently $10.35 per hour, in effect since January 1, 2018.
Pursuant to the Executive Order and its implementing regulations in
the Code of Federal Regulations, notice is hereby given that beginning
January 1, 2019, 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 $10.60 per hour. Notice is also
hereby given that, beginning January 1, 2019, 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 $7.40 per
hour.

DATES: These new rates shall take effect on January 1, 2019.

FOR FURTHER INFORMATION CONTACT: Melissa Smith, 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). 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

The Executive Order 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

[[Page 44907]]

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 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), 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. 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, ``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, 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 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), 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.
The Executive Order minimum wage and the cash wage required for
tipped employees are currently $10.35 and $7.25 per hour, respectively.
The Department announced these rates on September 15, 2017, 82 FR
43408, and the rates took effect on January 1, 2018.

II. The 2019 Executive Order Minimum Wage Rate

Using 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, to determine the
new Executive Order 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.
In order to determine the Executive Order minimum wage rate
beginning January 1, 2019, 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 2018 and
the last two quarters of 2017 (i.e., July 2017 through June 2018). The
Department then compared that data to the average CPI-W for the
preceding year, which consists of the first two quarters of 2017 and
the last two quarters of 2016 (i.e., July 2016 through June 2017).
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 2.337 percent. The Department then
applied that annual percentage increase of 2.337 percent to the current
Executive Order hourly minimum wage rate of $10.35, which resulted in a
wage rate of $10.592 (($10.35 x 0.02337) + $10.35); 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, 2019 is therefore $10.60 per hour.

III. The 2019 Executive Order Minimum Cash Wage for Tipped Employees

As noted above, section 3 of the Executive Order provides a
methodology to determine the amount

[[Page 44908]]

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
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 minimum wage. Seventy percent of the new Executive
Order minimum wage rate of $10.60 is $7.42. 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, 2019 is
therefore $7.40 per hour.

IV. Appendices

Appendix A to this notice provides a comprehensive chart of the
CPI-W data published by BLS that the Department used 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 poster that the Department published
with its Final Rule, reflecting the updated wage rates that will be in
effect beginning January 1, 2019. 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 Appendix B in a prominent or
accessible place at the worksite.

Dated: August, 22, 2018.
Bryan Jarrett,
Acting Administrator, Wage and Hour Division.

Appendix A: Data Used To Determine Executive Order 13658 Minimum Wage
Rate Effective January 1, 2019

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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2016Q3 to 2017Q2................................. 234.771 234.904 235.495 235.732 235.215 235.390 236.854 237.477 237.656 238.432 238.609 238.813 236.6123
2017Q3 to 2018Q2................................. 238.617 239.448 240.939 240.573 240.666 240.526 241.919 242.988 243.463 244.607 245.770 246.196 242.1427
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Annual Percentage Increase....................... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... 2.337%
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Appendix B: Updated Version of the Executive Order 13658 Poster

BILLING CODE 4510-27-P

[[Page 44909]]

[GRAPHIC] [TIFF OMITTED] TN04SE18.005

[FR Doc. 2018-19166 Filed 8-31-18; 8:45 am]
BILLING CODE 4510-27-C

44906 Federal Register / Vol. 83, No. 171 / Tuesday, September 4, 2018 / Notices

be included in each type of notice and functions of the agency, including with covered federal contracts to $10.10
further authorize the Secretary of Labor whether the information will have per hour, beginning January 1, 2015,
to prescribe (1) how notice to practical utility; with annual adjustments thereafter as
participants and beneficiaries must be • Evaluate the accuracy of the determined by the Secretary of Labor
given and (2) any additional reporting agency’s estimate of the burden of the (the Secretary) in accordance with the
requirements deemed necessary. proposed collection of information, methodology set forth in the Order. The
ERISA Technical Release 91–1 including the validity of the Secretary’s determination of the
provides guidance on how to satisfy the methodology and assumptions used; Executive Order minimum wage rate
subject ERISA notice requirements. The • Enhance the quality, utility, and also affects the minimum hourly cash
Release made two changes in the clarity of the information to be wage for tipped employees performing
statutory requirements for the second collected; and work on or in connection with covered
type of notice. First, it required the • Minimize the burden of the contracts. The Secretary is required to
notice to include a filing date and the collection of information on those who provide notice to the public of the new
intended asset transfer date. The Release are to respond, including through the minimum wage rate at least 90 days
also simplified the statutory filing use of appropriate automated, before the rate takes effect. The
requirements by providing that filing electronic, mechanical, or other applicable minimum wage under the
with the DOL would be deemed technological collection techniques or Executive Order is currently $10.35 per
sufficient notice to both the DOL and other forms of information technology, hour, in effect since January 1, 2018.
the Department of the Treasury. ERISA e.g., permitting electronic submission of Pursuant to the Executive Order and
section 101(e) authorizes this responses. its implementing regulations in the
information collection. See 29 U.S.C. Agency: DOL–EBSA. Code of Federal Regulations, notice is
1021(e). Title of Collection: Employee hereby given that beginning January 1,
This information collection is subject Retirement Income Security Act of 1974 2019, the Executive Order minimum
to the PRA. A Federal agency generally Technical Release 1991–1. wage rate that generally must be paid to
cannot conduct or sponsor a collection OMB Control Number: 1210–0084. workers performing work on or in
of information, and the public is Affected Public: Private Sector— connection with covered contracts will
generally not required to respond to an businesses or other for-profits. increase to $10.60 per hour. Notice is
information collection, unless it is Total Estimated Number of also hereby given that, beginning
approved by the OMB under the PRA Respondents: 4. January 1, 2019, the required minimum
and displays a currently valid OMB Total Estimated Number of cash wage that generally must be paid
Control Number. In addition, Responses: 26,966. to tipped employees performing work
notwithstanding any other provisions of Total Estimated Annual Time Burden: on or in connection with covered
law, no person shall generally be subject 422 hours. contracts will increase to $7.40 per
to penalty for failing to comply with a Total Estimated Annual Other Costs hour.
collection of information that does not Burden: $6,917.
display a valid Control Number. See 5 DATES: These new rates shall take effect
Authority: 44 U.S.C. 3507(a)(1)(D).
CFR 1320.5(a) and 1320.6. The DOL on January 1, 2019.
Dated: August 27, 2018. FOR FURTHER INFORMATION CONTACT:
obtains OMB approval for this
information collection under Control Michel Smyth, Melissa Smith, Director, Division of
Number 1210–0084. Departmental Clearance Officer. Regulations, Legislation, and
OMB authorization for an ICR cannot [FR Doc. 2018–19100 Filed 8–31–18; 8:45 am] Interpretation, Wage and Hour Division,
be for more than three (3) years without BILLING CODE 4510–29–P U.S. Department of Labor, Room S–
renewal, and the DOL seeks to extend 3502, 200 Constitution Avenue NW,
PRA authorization for this information Washington, DC 20210; telephone: (202)
collection for three (3) more years, DEPARTMENT OF LABOR 693–0406 (this is not a toll-free
without any change to existing number). Copies of this notice may be
requirements. The DOL notes that Wage and Hour Division obtained in alternative formats (Large
existing information collection Print, Braille, Audio Tape, or Disc),
Establishing a Minimum Wage for upon request, by calling (202) 693–0023
requirements submitted to the OMB
Contractors, Notice of Rate Change in (not a toll-free number). TTY/TTD
receive a month-to-month extension
Effect as of January 1, 2019 callers may dial toll-free (877) 889–5627
while they undergo review. For
additional substantive information AGENCY: Wage and Hour Division, to obtain information or request
about this ICR, see the related notice Department of Labor. materials in alternative formats.
published in the Federal Register on ACTION: Notice. SUPPLEMENTARY INFORMATION:
April 11, 2018 (83 FR 15635).
Interested parties are encouraged to SUMMARY: The Wage and Hour Division I. Executive Order 13658 Background
send comments to the OMB, Office of (WHD) of the U.S. Department of Labor and Requirements for Determining
Information and Regulatory Affairs at (the Department) is issuing this notice to Annual Increases to the Minimum
the address shown in the ADDRESSES announce the applicable minimum Wage Rate
section within thirty (30) days of wage rate for workers performing work The Executive Order was signed on
publication of this notice in the Federal on or in connection with federal February 12, 2014, and raised the hourly
minimum wage for workers performing
sradovich on DSK3GMQ082PROD with NOTICES

Register. In order to help ensure contracts covered by Executive Order
appropriate consideration, comments 13658, beginning January 1, 2019. work on or in connection with covered
should mention OMB Control Number Executive Order 13658, Establishing a federal contracts to $10.10 per hour,
1210–0084. The OMB is particularly Minimum Wage for Contractors (the beginning January 1, 2015, with annual
interested in comments that: Executive Order or the Order), was adjustments thereafter in an amount
• Evaluate whether the proposed signed on February 12, 2014, and raised determined by the Secretary pursuant to
collection of information is necessary the hourly minimum wage for workers the Order. See 79 FR 9851. The
for the proper performance of the performing work on or in connection Executive Order directed the Secretary

VerDate Sep<11>2014 17:54 Aug 31, 2018 Jkt 244001 PO 00000 Frm 00050 Fmt 4703 Sfmt 4703 E:\FR\FM\04SEN1.SGM 04SEN1

$44908 Federal Register / Vol. 83, No. 171 / Tuesday, September 4, 2018 / Notices of the minimum hourly cash wage that January 1, 2019 is therefore $7.40 per the Executive Order. Contractors with must be paid to tipped employees hour. employees covered by the Fair Labor performing on or in connection with Standards Act who are performing on or IV. Appendices covered contracts. Because the cash in connection with a covered contract wage for tipped employees reached 70 Appendix A to this notice provides a may satisfy the notice requirement by percent of the Executive Order comprehensive chart of the CPI–W data displaying the poster set forth in published by BLS that the Department Appendix B in a prominent or minimum wage beginning on January 1, used to calculate the new Executive accessible place at the worksite. 2018 (i.e., $7.25 per hour compared to Order minimum wage rate based on the $10.35 per hour), future updates to the methodology explained herein. Dated: August, 22, 2018. cash wage for tipped employees must Appendix B to this notice sets forth an Bryan Jarrett, continue to set the rate at 70 percent of updated version of the Executive Order Acting Administrator, Wage and Hour the full Executive Order minimum poster that the Department published Division. wage. Seventy percent of the new with its Final Rule, reflecting the Executive Order minimum wage rate of updated wage rates that will be in effect Appendix A: Data Used To Determine $10.60 is $7.42. Because the Executive beginning January 1, 2019. See 79 FR Executive Order 13658 Minimum Wage Order provides that the rate must be 60732–33. Pursuant to 29 CFR 10.29, Rate Effective January 1, 2019 rounded to the nearest $0.05, the new contractors are required to notify all Data Source: Consumer Price Index for minimum hourly cash wage for tipped workers performing on or in connection Urban wage Earners and Clerical Workers workers performing on or in connection with a covered contract of the (CPI–W) (United States city average, all with covered contracts beginning applicable minimum wage rate under items, not seasonally adjusted). Quarter 3 Quarter 4 Quarter 1 Quarter 2 Annual Average 2016Q3 to 2017Q2 ......... 234.771 234.904 235.495 235.732 235.215 235.390 236.854 237.477 237.656 238.432 238.609 238.813 236.6123 2017Q3 to 2018Q2 ......... 238.617 239.448 240.939 240.573 240.666 240.526 241.919 242.988 243.463 244.607 245.770 246.196 242.1427 Annual Percent- age Increase ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ 2.337% Appendix B: Updated Version of the Executive Order 13658 Poster BILLING CODE 4510–27–P sradovich on DSK3GMQ082PROD with NOTICES VerDate Sep<11>2014 17:54 Aug 31, 2018 Jkt 244001 PO 00000 Frm 00052 Fmt 4703 Sfmt 4703 E:\FR\FM\04SEN1.SGM 04SEN1$

Document Created: 2018-09-01 02:59:10
Document Modified: 2018-09-01 02:59:10

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		These new rates shall take effect on January 1, 2019.
Contact		Melissa Smith, 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). 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		83 FR 44906

83 FR 44906 - Establishing a Minimum Wage for Contractors, Notice of Rate Change in Effect as of January 1, 2019

DEPARTMENT OF LABORWage and Hour Division

Federal Register Volume 83, Issue 171 (September 4, 2018)

DEPARTMENT OF LABOR
Wage and Hour Division