Sep 13, 2018

By Wayne Simpson, CFCM, CSCM

New Hourly Rates Effective January 1, 2019

The U.S. Department of Labor’s Wage and Hour Division announced the new applicable minimum wage rates for workers performing work on or in connection with Federal contracts covered by Executive Order (E.O.) 13658. The new rates, effective January 1, 2019, are $10.60 per hour for covered contracts, and $7.40 per hour for tipped employees.

The announcement was published in the September 4, 2018, edition of the Federal Register.  E.O. 13568, signed February 12, 2014, raised the hourly minimum wage rate for workers performing work in connection with Federal contracts covered by the Service Contract Labor Standards to $10.10 per hour, beginning January 1, 2015.  The E.O. requires annual adjustments thereafter, as determined by the U.S. Secretary of Labor.  The Secretary’s determination 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 rates at least 90 days before the rates take effect.

E.O. 13568 is codified in Federal Acquisition Regulation (FAR) Subpart 22.19, Establishing a Minimum Wage for Contractors, and implemented in FAR Clause 52.222-55—Minimum Wages Under Executive Order 13658 (Dec 2015).

Federal contractors should note FAR Clause 52.222-55 has a flow-down requirement for subcontracts (including purchase orders issued by the contractor) regardless of the dollar value of the subcontract or purchase order.

FedBizAssist, a Centre Subcontractor, has flow-down clause subscriptions available for Federal prime and subcontractors seeking to increase their compliance and reduce risks associated with flow-down requirements.  Centre Clients and blog readers receive a 20% discount. Please enter promo code “CENTRE” at checkout to receive the discount. These one-year subscriptions are available at

Best wishes for every continued success in the Federal Marketplace!


About the Author:

Wayne Simpson
Wayne Simpson is retired from the U.S. Department of Veterans Affairs (VA) after 38 years of federal service. He served as the Executive Assistant to VA’s Deputy Assistant Secretary for Acquisition and Logistics where he was the primary staff advisor to the Deputy Assistant Secretary, who serves concurrently as VA’s Senior Procurement Executive and Debarring Official.






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