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WHAT: As anticipated, President Biden issued an executive order (EO) on Wednesday raising the minimum wage to $15 for many employees of federal contractors, effective January 30, 2022. All agencies will need to incorporate the new minimum wage into their solicitations and incorporate it into existing contracts at option exercise or other extension or renewal by that date. Covered contracts are principally those subject to the Service Contract Act (SCA) or Davis-Bacon Act (DBA).
This new EO builds on the existing contractor minimum wage required by EO 13658, which began applying to federal contracts in January 2015 and is currently $10.95 per hour. Forthcoming implementing regulations for the $15 minimum wage order will likely incorporate, where appropriate, existing definitions and obligations from the EO 13658 implementation. One new provision is notable: the new EO requires phasing out the tipped minimum wage (currently
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The Executive Order is projected to increase the hourly wage paid to hundreds of thousands of Federal contractor employees.
TAKEAWAYS
President Biden issued an Executive Order raising to $15.00 per hour the minimum wage that Federal contractors and subcontractors must pay workers on covered contracts, beginning on January 30, 2022.
Because the new $15.00 minimum wage is higher than some prevailing minimum wages paid under the McNamara-O’Hara Service Contract Act (SCA), this Executive Order is projected to increase wages of nearly 400,000 Federal contractor employees.
The Executive Order requires the Secretary of Labor to issue regulations implementing its requirements by November 24, 2021.
Subaward Monitoring and Management - D11
The purpose of this procedure is to execute the OHIO obligation regarding the proper monitoring and stewardship of sponsored funds when those funds are used to issue a subaward to a subrecipient. As a condition of an award made to OHIO, the University is obligated to comply with applicable federal, state, and local regulations. When the University assigns responsibility to a subrecipient for conducting a substantive portion of the work under an OHIO award, the University remains responsible to the sponsor for the management of funds and meeting performance goals. Thus, the monitoring of technical and financial activities associated with a subrecipient is an integral part of the University’s stewardship of sponsor funds.
The U.S. Court of Appeals for the Federal Circuit, in
BGT Holdings LLC v. United States, recently held that the government does not have the discretion to deny a contractor’s request for equitable adjustment (REA) under Federal Acquisition Regulation (FAR) 52.245-1 (Government Property) where the conditions specified in that clause are present and the contractor is able to show financial loss. As discussed below, the Federal Circuit’s decision in this regard is a welcome development for government contractors because the court’s basic reasoning extends to all FAR clauses that direct that the government “shall” or “must” consider or make an equitable adjustment if the conditions set forth in the applicable FAR clause are present.
[co-author: Craig Stetson ]
In our last post on this topic, we touched on how the acceptance, use, and forgiveness of Paycheck Protection Program (“PPP”) loans can be viewed in the context of a Defense Contract Audit Agency (“DCAA”) audit. This post focuses on audits and investigations involving PPP loans. Close scrutiny of PPP loans is not a prediction; it is reality. The Small Business Administration (“SBA”) has announced it will audit all PPP loans in excess of two million dollars following a lender’s submission of a borrower’s loan forgiveness application, and it reserves the right to “spot check” any PPP loan of a lesser amount at its discretion. The Department of Justice has already charged multiple individuals with PPP fraud. And this is just the beginning of what many think will be a tidal wave of enforcement activity involving PPP loans.