Upcoming Minimum Wage Increase for Federal Contractors

Federal Budget
​On November 24, the U.S. Department of Labor released its final rule based on the executive order signed on April 27, 2021, by President Joe Biden on raising the minimum hourly wage for federal contractors to $15 beginning on January 30, 2022 (and will be indexed for inflation). The current hourly minimum is $10.95 under an executive order that President Barack Obama signed in 2014. This final rule has a muted impact on the sector overall.
What does this regulatory development mean for you as a health care provider? A provider's participation in Medicare or Medicaid does not make you a federal contractor. The same is true with respect to participation in TRICARE following the issuance of new regulations last year.
However, if you are currently in a contract with the U.S. Department of Veterans Affairs (VA) or plan to be in the future, the new executive order may impact you depending on the type of contract and when you enter into or renew such contracts. For example, if you have a Veterans Care Agreement (VCA), the final rule confirmed in response to AHCA’s comment letter that the new executive order does not impact you because of statutory language in the VA MISSION Act of 2018 providing that entering into a VCA does not generally make one a federal contractor. In addition, the VA’s Community Care Network (CCN) is not impacted by this final rule.  
In contrast, contracts under older, legacy VA programs will likely be affected. If you are renewing or entering into a new VA contract that is not a VCA or a CCN, this wage increase will likely apply.