Guam covered by Labor rules on $15 wage for federal contractors

NEX: Guam and other U.S. territories will be included in a raised federal minimum wage imposed on contracts beginning in 2022, including for concessions at military bases. File photo courtesy of the Navy Exchange

Federal contractors on Guam and other American territories are slated to get a new minimum wage next year: $15 an hour.

The pay increase will be possible through newly released proposed rules by the U.S. Department of Labor. The federal agency, following a request from Gov. Lou Leon Guerrero, formally includes Guam, Puerto Rico, the Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, American Samoa and Wake Island as part of the definition of "United States" when considering an executive order that raises the wage.

"To be clear, the department is not proposing to extend coverage of this executive order to contracts entered into with the governments of those territories, but rather is proposing to expand coverage to covered contracts with the federal government that are being performed inside the geographical limits of those territories," the proposed rules state.

USDOL did not originally extend the order to Guam, which has enjoyed reliable economic activity from military-funded construction projects throughout the COVID-19 pandemic. Leon Guerrero formally asked Secretary of Labor Martin Walsh for the island's inclusion, Post files show.

"The new rate, if applied to Guam, will improve worker productivity and promote higher work standards by recognizing the efforts of workers and promoting morale," she wrote in a letter to Walsh. "We have the opportunity to help lift up the workers who are vital to the operations of the federal government."

The increased minimum wage won't affect current contracts, and won't kick in until Jan. 30, 2022. As an example in its rules, USDOL stated a concessions contract entered into in October 2020 would not be subject to the executive order. However, if the contract is renewed in October 2022, the vendor would need to begin paying out the higher rate.

Estimates unclear

Two different figures for potential affected employees in Guam, Puerto Rico and the U.S. Virgin Islands are included in the labor department's report.

One methodology estimated 11,800 employees from these three territories would get raises, while another resulted in an estimate of 7,200. The Labor Department did not specify how many workers in an individual territory would be affected, nor did it explain which estimate was more accurate.

USDOL said it could not make similar calculations for the CNMI and American Samoa because not enough data was available. The department, in a release, stated the executive order also will eliminate the tipped minimum wage for contractors by 2024, and restores minimum wage protections to outfitters and guides operating on federal lands.

Public comments can be made on the proposed rules at until Aug. 23.


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