Recently, I have run into a wage issue where I hope the forum can lend some guidance: The issue is around those locals where the State Min wage exceeds the Fed minimum wage. As we all know, DOL requires contractors to pay the State min wage if/when it exceeds the Federal min wage. My problem is I'm being told that in a nutshell, the Federal Government is not required to adjust wages to pay the higher State min wage should it exceed the federal min wage. This just doesn't seem fair to me. How can we require a contractor to pay the higher State min wage when it increases but not entertain the contractor's REA for a price adjustment? Note: The contract iin question includes clause 52.222–43, Fair Labor Standards Act and Service Contract Act—Price Adjustment.
I’ve tried to research the DOL website and the FAR for guidance that supports my position which is that the contracting officer may execute a Price Adjustment to meet the higher of the two minimum wages, either State or Federal, but I have had no success. Has anyone run into this problem before? How did you resolve it?