Government Contracts DOL Adds Government Contractor Minimum Wage Exemption
Wednesday, October 10, 2018

DOL Adds Government Contractor Minimum Wage Exemption

By Government Contracts Editorial Staff

The Department of Labor has released a final rule to exempt contracts in connection with seasonal recreational services and seasonal recreational equipment rental offered to the general public on federal lands from the requirements of President Obama’s Executive Order 13658, Minimum Wage for Contractors. The exemption was created by President Trump’s Executive Order 13838, issued on May 25, 2018, which amended EO 13658 to create the exemptions and directed executive departments and agencies to promptly implement it. EO 13658, issued on February 12, 2014, raised the hourly minimum wage for certain workers performing work on covered federal contracts to $10.10 per hour in 2015, with annual inflation-based adjustments thereafter as determined by the Secretary of Labor. As of January 1, 2018, the EO 13658 minimum wage rate is $10.35 per hour. As of January 1, 2019, the EO 13658 minimum wage will be $10.60 per hour.

Seasonal Recreational Services. EO 13838, Exemption from Executive Order 13658 for Recreational Services on Federal Lands, amended EO 13658 to add language stating that the provisions of EO 13658 do “not apply to federal contracts or contract-like instruments” entered into “in connection with seasonal recreational services or seasonal recreational equipment rental.” The EO further stated that seasonal recreational services include “river running, hunting, fishing, horseback riding, camping, mountaineering activities, recreational ski services, and youth camps”, and that this exemption does not apply to “lodging and food services associated with seasonal recreational activities.” Because of the nature of the industry, seasonal recreational workers have “irregular work schedules, a high incidence of overtime pay, and an unusually high turnover rate,” according to EO 13838. Therefore, implementing EO 13658 threatened to significantly increase the cost of seasonal recreational services on federal lands, while limiting the hours that recreational-service workers would be available to work. For the text of the final rule, which went into effect September 26, 2018, see 83 FR 48537.

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