The Department of Labor has issued final regulations that raise the minimum wage to $10.10 for workers and $4.90 for tipped employees. The increased wages are a result of President Obama’s Executive Order 13658, and apply to new contracts and replacements for expiring contracts with the federal government from solicitations issued starting January 1, 2015. Annual cost of living increases will begin on January 1, 2016.

The new rules apply to contractors and subcontractors in four major categories of contracts:

• Procurement contracts for construction covered by the Davis-Bacon Act;

• Service contracts covered by the Service Contract Act (SCA);

• Concessions contracts, including any concessions contract excluded from the SCA by regulations;

• Contracts in connection with Federal property or lands and related to offering services for Federal employees, their dependents or the general public.