['Government contracts']
['Government Contracts']
01/10/2024
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(a) For the E.O. minimum wage rate that becomes effective on January 1, 2016, and annually thereafter, the Administrator will—
(1) Notify the public of the new E.O. minimum wage rate at least 90 days before it becomes effective by publishing a notice in the Federal Register;
(2) Publish and maintain on Wage Determinations OnLine (WDOL), http://www.wdol.gov, or any successor site, the E.O. minimum wage rate; and
(3) Include a general notice on wage determinations which are issued under the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute. The notice will provide information on the E.O. minimum wage and how to obtain annual updates.
(b)(1) The contractor may request a price adjustment only after the effective date of a new annual E.O. minimum wage determination published pursuant to paragraph (a). Prices will be adjusted only for increased labor costs (including subcontractor labor costs) as a result of the annual E.O. minimum wage, and for associated labor costs (including those for subcontractors). Associated labor costs shall include increases or decreases that result from changes in social security and unemployment taxes and workers' compensation insurance, but will not otherwise include any amount for general and administrative costs, overhead, or profit.
(2) The wage rate price adjustment under this clause is the lowest amount calculated by subtracting from the new E.O. wage rate the following: The current E.O. minimum wage rate; the current service or construction wage determination rate under the contract (if the wage rate is applicable to that worker); or the actual wage currently paid the worker. If the amount is zero or below, there will be no increase paid for this worker.
| (i) Example 1—New E.O. wage rate is $11.10. | |
| Previous E.O. wage rate is $10.70 The current service or construction wage determination rate under the contract is $10.75. The actual wage paid to the worker prior the new minimum wage is $10.80. | Analysis: The calculation is $11.10 − $10.80 = $.30. The price adjustment for this worker is $.30. |
| (ii) Example 2—New E.O. wage rate is $10.50. | |
| Previous E.O. wage rate is $10.10 The current service or construction wage determination rate under the contract is $10.75. The actual wage paid to the worker prior to the new minimum wage is $10.80. | Analysis: The calculation is $10.50 − $10.80 = −$.30. There is no price adjustment for this worker. |
(3) The contracting officer shall not adjust the contract price for any costs other than those identified in paragraph (b)(1) of this section, and shall not provide duplicate price adjustments with any price adjustment under clauses implementing the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute.
[79 FR 74550, Dec. 15, 2014, as amended at 80 FR 75917, Dec. 4, 2015; 81 FR 11992, Mar. 7, 2016]
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