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1/26/2015 | Construction Blog

Following the lead set in President Obama’s Executive Order 13658, the Department of Labor’s Wage & Hour Division issued a final rule raising the minimum wage for workers providing labor on federal construction and service contracts to $10.10 an hour.This final rule applies to new and replacement contracts that result from solicitations after January 1, 2015. It also places the Secretary of Labor in charge of setting the minimum wage beginning in 2016 with the restriction that the Secretary cannot ever lower it.

President Obama’s Executive Order and the subsequent final DOL rule are ultimately meaningless though. In addition to the fact that most employers already pay more than the minimum wage, the application of Davis-Bacon Act and the similar Service Contract Act requirements on federal projects already require a higher wage than the newly minimum wage rate. Moreover, a completed 2014 analysis of the previous year’s salary records shows that the pay of construction professionals was up on average 10% in any case. FMI reviewed 75,000 salary records for 280 positions to reach its conclusions.

In the end the construction market seems to have turned the corner. It still has a ways to go to reach full recovery, but the signs are positive and likely have nothing to do with the policies being set in Washington.