Categories: General Wage Hour

by Michael D. Thompson

President Obama announced in his State of the Union address that he will issue an executive order increasing the minimum wage for employees of federal contractors to $10.10 per hour. The executive order is undoubtedly a prelude to a push for Congressional support of an increase in the Fair Labor Standards Act minimum wage of $10.10 per hour.

“If you cook our troops’ meals or wash their dishes, you should not have to live in poverty,” President Obama said. 

According to the Obama administration, the increase would affect more than 2 million employees. 

Many of those employees, however, are already paid in excess of $10.10 per hour under statutes such as the Service Contract Act and the Davis-Bacon Act. Those acts require certain federal contractors and subcontractors to pay workers no less than the locally prevailing wages and fringe benefits for similar projects in the area.

Accordingly, as the President’s remarks might suggest, the impact of the wage increase is generally limited to employees in food service, cleaning/maintenance and laundry occupations. For example, at Fort Bragg (the nation’s largest military base), dishwashers earn only $7.87 per hour and would be impacted by the increase in the minimum wage, but cooks already earn from $10.41 to $12.40 per hour. Similarly, occupations such as receptionist, refuse collector and school crossing guard are already compensated in excess of $10.10 per hour.

Indeed, of the 392 occupations receiving standard Service Contract Act wage determinations for Cumberland County, North Carolina (the headquarters of Fort Bragg), only 26 -- or 6.6% -- have been paid at rates below the new minimum wage.

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