"Very interesting...but so stupid!".  

--Arte Johnson, "Laugh in" TV Show

Two weeks ago, my colleague, Howard Wolf Rodda, raised the issue that the Service Contract Act (“SCA”) prevailing wage determinations for low wage occupations (particularly in places like California and Washington, DC) were lagging the state minimum wage increases and sometimes were being superseded thereby.  We agreed it is very stupid that the SCA wage determinations do not reflect the state minimum wages. In that event, absent work in a federal enclave, the federal contractor service workers get the benefit of whichever wage requirement is higher. Howard asked me if I thought contractors could get a price adjustment for the higher state minimum wages and I pointed to a blog we posted back in 2021 suggesting that it would be hard. See https://www.awrcounsel.com/blog/2021/8/23/catch-22-no-contractor-price-adjustments-for-state-minimum-wage-increases?rq=state. 

So where might those troubles arise? Here is a chart from CNN which gives a succinct summary of minimum wage increase which either have gone into effect with the new year or will happen over the course of the year: 

States with scheduled minimum wage increases on December 31, 2022, or January 1, 2023

• Delaware: $10.50 to $11.75

• Illinois: $12 to $13

• Maryland: $12.50 to $13.25

• Massachusetts: $14.25 to $15

• Michigan: $9.87 to $10.10

• Missouri: $11.15 to $12

• Nebraska: $9 to $10.50

• New Jersey: $13 to $14.13* (scheduled increase also includes inflation adjustment)

• New Mexico: $11.50 to $12

• New York: $13.20 to $14.20 (Upstate New York); $15 (in and around NYC)

• Rhode Island: $12.25 to $13

• Virginia: $11 to $12

Cost of living increases of state minimum hourly wages:

• Alaska: $10.34 to $10.85

• Arizona: $12.80 to $13.85

• California: $14.50 (firms with 25 or fewer employees) /$15 (firms with 26+ employees) to $15.50

• Colorado: $12.56 to $13.65

• Maine: $12.75 to $13.80

• Minnesota: $8.42 to $8.63 (small employer); $10.33 to $10.59 (large employer)

• Montana: $9.20 to $9.95

• Ohio: $9.30 to $10.10

• South Dakota: $9.95 to $10.80

• Vermont: $12.55 to $13.18

• Washington: $14.49 to $15.74

Later in 2023:

• Connecticut (effective July 1): $14 to $15

• Florida (September 2023): $11 to $12

• Nevada (effective July 1): $9.50 to $10.25 (firms that offer benefits); $10.50 to $11.25 (no benefits offered)

• Oregon: $13.50 (effective July 1, indexed annual increase to be based on the CPI)

Sources: State websites, National Conference of State Legislatures, Economic Policy Institute

https://www.cnn.com/2022/12/31/economy/minimum-wage-increases-2023.

Since much of government contracts world is focused on the Washington, DC metropolitan area, it is worthwhile specially noting that Virginia’s minimum wage jumps up a buck to $12 an hour. It is supposed to go to $15 by 2026, if the Virginia Assembly signs off on it, but with a new Republican majority in power over a portion of the State Assembly, and a Republican governor, that is now unclear. In Maryland, the state minimum wage rises $0.75 to $13.25. The District of Columbia’s minimum wage goes up $0.90 on July 1, 2023, to $17.00 an hour. The District also has a living wage for city contractors which just went to $16.50 and will reportedly join the minimum wage at $17 an hour in six months. See Washington Post, Metro Section, January 1, 2023, at p. C-1 and C-6.

We don’t have to discuss the Fair Labor Standards Act minimum wage, since that remains stuck at $7.25 an hour. But, as we already reported, we do have two Contractor Minimum Wage Executive Orders (“EOs”). EO  14026 was just raised to $16.20 an hour effective January 1, 2023. And the old EO 13568 went to $12.15 an hour effective January 1, 2023. See https://www.awrcounsel.com/blog/2023/1/4/happy-new-year-and-a-friendly-reminder. While the former is higher than most of the jurisdictions discussed above, it isn’t by that much in a few jurisdictions, and it may be exceeded by some local government minimum wages like has happened in the District of Columbia.

It is hard to look at this situation without concluding that the laboratory of experimentation for wage and hour purposes has passed to the states as the federal government gets bogged down in partisan gridlock.