Implementing Minimum Wage Increases on Federal Contractors
The U.S. Labor Department has released proposed regulations to raise the minimum-wage rate for workers on federal contracts from $7.25 per hour to $10.10 per hour – subject to annual increases after 2015. The proposed regulations generally apply to “new” contracts in one of four contract categories; 1. contracts covered by the Davis-Bacon Act, 2. contracts covered by the Service Contract Act, 3. concessions contracts and 4. contracts in connection with federal lands or employees. A covered worker is one who performs work in connection with the covered contract and whose wages are governed by the federal FLSA, by the Davis-Bacon Act or by the Service Contract Act. Also, as part of the regulation the tip credit wage would increase to $4.90 and overtime increases to the tip credit rate to bring it up to 70% of the full minimum wage.
DOL Changes to FLSA’s Overtime Exemptions
In March President Obama directed the U.S. Labor Department to “modernize and streamline” its regulations governing the federal Fair Labor Standards Act’s executive, administrative, professional, and “outside salesman” exemptions. In the March Presidential Memorandum, President Obama stated his administration’s view that the exemptions’ current salary threshold means that “millions of Americans aren’t getting the extra pay they deserve” because “an exception that was originally meant for high-paid, white-collar employees now covers workers earning as little as $23,660 a year.” The goal of this initiative appears to be to further limit these exemptions to include increasing the minimum salary requirement of $455 per week, and changing the duties-related requirements for exempt status so that fewer will qualify as exempt and more workers will become eligible for overtime pay.
Working Families Flexibility Act
This bill had been introduced to Congress in mid-2013 and failed to pass, however proponents have promised to continue to push for passage. This bill would enable hourly non-exempt employees to receive compensatory time-off in lieu of overtime pay. Employees could earn one and a half hours of compensatory time for each overtime hour worked and up to 160 hours per year could be “banked”. Employees could use the hours for personal needs, such as receiving medical care, caring for a sick family member, or attending school function. The employee can also choose to cash out their overtime bank and the employer must comply within 30 days. Once an employee has accrued 80 hours, the company has the option of paying out the accrual in overtime pay.
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