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Federal Register / Vol. 86, No. 138 / Thursday, July 22, 2021 / Proposed Rules 23.230

Deductions.

The contractor may make deductions that reduce a workers wages below the Executive Order minimum wage rate only if such deduction qualifies as a:
a Deduction required by Federal, state, or local law, such as Federal or state withholding of income taxes;
b Deduction for payments made to third parties pursuant to court order;
c Deduction directed by a voluntary assignment of the worker or his or her authorized representative; or d Deduction for the reasonable cost or fair value, as determined by the Administrator, of furnishing such worker with board, lodging, or other facilities, as defined in 29 U.S.C.
203m1 and part 531 of this title.
23.240

Overtime payments.

a General. The Fair Labor Standards Act and the Contract Work Hours and Safety Standards Act require overtime payment of not less than one and onehalf times the regular rate of pay or basic rate of pay for all hours worked over 40 hours in a workweek to covered workers. The regular rate of pay under the Fair Labor Standards Act is generally determined by dividing the workers total earnings in any workweek by the total number of hours actually worked by the worker in that workweek for which such compensation was paid.
b Tipped employees. When overtime is worked by tipped employees who are entitled to overtime pay under the Fair Labor Standards Act and/or the Contract Work Hours and Safety Standards Act, the employees regular rate of pay includes both the cash wages paid by the employer see 23.220a and 23.280a1 and the amount of any tip credit taken see 23.280a2. See part 778 of this title for a detailed discussion of overtime compensation under the Fair Labor Standards Act.
Any tips received by the employee in excess of the tip credit are not included in the regular rate.
23.250

Frequency of pay.

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Wage payments to workers shall be made no later than one pay period following the end of the regular pay period in which such wages were earned or accrued. A pay period under Executive Order 14026 may not be of any duration longer than semi-monthly.
23.260 Records to be kept by contractors.

a Records. The contractor and each subcontractor performing work subject to Executive Order 14026 shall make and maintain, for three years, records containing the information specified in paragraphs a1 through 6 of this
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section for each worker and shall make them available for inspection and transcription by authorized representatives of the Wage and Hour Division of the U.S. Department of Labor:
1 Name, address, and social security number of each worker;
2 The workers occupations or classifications;
3 The rate or rates of wages paid;
4 The number of daily and weekly hours worked by each worker;
5 Any deductions made; and 6 The total wages paid.
b Interviews. The contractor shall permit authorized representatives of the Wage and Hour Division to conduct interviews with workers at the worksite during normal working hours.
c Other recordkeeping obligations.
Nothing in this part limits or otherwise modifies the contractors recordkeeping obligations, if any, under the DavisBacon Act, the Service Contract Act, or the Fair Labor Standards Act, or their implementing regulations in this chapter.
23.270

Anti-kickback.

All wages paid to workers performing on or in connection with covered contracts must be paid free and clear and without subsequent deduction except as set forth in 23.230, rebate, or kickback on any account. Kickbacks directly or indirectly to the employer or to another person for the employers benefit for the whole or part of the wage are prohibited.
23.280

Tipped employees.

a Payment of wages to tipped employees. With respect to workers who are tipped employees as defined in 23.20 and this section, the amount of wages paid to such employee by the employees employer shall be equal to:
1 An hourly cash wage of at least:
i $10.50 an hour beginning on January 30, 2022;
ii Beginning January 1, 2023, 85
percent of the wage in effect under section 2 of the Executive Order, rounded to the nearest multiple of $0.05;
iii Beginning January 1, 2024, and for each subsequent year, 100 percent of the wage in effect under section 2 of the Executive Order; and 2 An additional amount on account of the tips received by such employee tip credit which amount is equal to the difference between the hourly cash wage in paragraph a1 of this section and the wage in effect under section 2
of the Executive Order. Where tipped employees do not receive a sufficient amount of tips in the workweek to equal
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the amount of the tip credit, the employer must increase the cash wage paid for the workweek under paragraph a1 of this section so that the amount of the cash wage paid and the tips received by the employee equal the minimum wage under section 2 of the Executive Order.
3 An employer may pay a higher cash wage than required by paragraph a1 of this section and take a lower tip credit but may not pay a lower cash wage than required by paragraph a1
of this section and take a greater tip credit. In order for the employer to claim a tip credit, the employer must demonstrate that the worker received at least the amount of the credit claimed in actual tips. If the worker received less than the claimed tip credit amount in tips during the workweek, the employer is required to pay the balance on the regular payday so that the worker receives the wage in effect under section 2 of the Executive Order with the defined combination of wages and tips.
4 If the cash wage required to be paid under the Service Contract Act, 41
U.S.C. 6701 et seq., or any other applicable law or regulation is higher than the wage required by section 2 of the Executive Order, the employer shall pay additional cash wages equal to the difference between the wage in effect under section 2 of the Executive Order and the highest wage required to be paid.
b Requirements with respect to tipped employees. The definitions and requirements concerning tipped employees, the tip credit, the characteristics of tips, service charges, tip pooling, and notice set forth in 29
CFR 10.28b through f apply with respect to workers who are tipped employees, as defined in 23.20, performing on or in connection with contracts covered under Executive Order 14026, except that the minimum required cash wage shall be the minimum required cash wage described in paragraph a1 of this section for the purposes of Executive 14026. For the purposes of this section, where 29 CFR
10.28b through f uses the term Executive Order, that term refers to Executive Order 14026.
23.290

Notice.

a The contractor must notify all workers performing work on or in connection with a covered contract of the applicable minimum wage rate under the Executive Order. With respect to service employees on contracts covered by the Service Contract Act and laborers and mechanics on contracts covered by the Davis-Bacon Act, the contractor may meet the requirement in
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