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Federal Register / Vol. 86, No. 138 / Thursday, July 22, 2021 / Proposed Rules H. Exemption From Coverage of the Rule for Small Entities Executive Order 14026 establishes its own coverage and exemption requirements; therefore, the Department has no authority to exempt small businesses from the minimum wage requirements of the order.
VI. Unfunded Mandates Reform Act The Unfunded Mandates Reform Act of 1995 UMRA, 2 U.S.C. 1532, requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing any Federal mandate that may result in excess of $100 million adjusted annually for inflation in expenditures in any one year by state, local, and tribal governments in the aggregate, or by the private sector. This statement must: 1
Identify the authorizing legislation; 2
present the estimated costs and benefits of the rule and, to the extent that such estimates are feasible and relevant, its estimated effects on the national economy; 3 summarize and evaluate state, local, and Tribal government input; and 4 identify reasonable alternatives and select, or explain the non-selection, of the least costly, most cost-effective, or least burdensome alternative.
A. Authorizing Legislation This proposed rule is issued in response to section 4 of Executive Order 14026, Increasing the Minimum Wage for Federal Contractors, which instructs the Department to issue regulations by November 24, 2021, to implement the requirements of this order. 86 FR 22836.

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B. Assessment of Costs and Benefits For purposes of the UMRA, this proposed rule includes a Federal mandate that would result in increased expenditures by the private sector of more than $158 million in at least one year, and could potentially result in increased expenditures by state and local governments that hold contracts with the Federal Government.118 It will not result in increased expenditures by Tribal govenments because they are excluded from coverage under section 8c of the order. In the Departments experience, state and local governments are parties to a relatively small number of SCAand DBA-covered contracts.
Additionally, because costs are a small
share of revenues, impacts to governments and tribes should be small.
The Department determined that the proposed rule would result in Year 1
direct employer costs to the private sector of $17.1 million, in regulatory familiarization and implementation costs. The proposed rule will also result in transfer payments for the private sector of $1.5 billion in Year 1, with an average annualized value of $1.5 billion over ten years.
UMRA requires agencies to estimate the effect of a regulation on the national economy if such estimates are reasonably feasible and the effect is relevant and material.119 However, OMB
guidance on this requirement notes that such macroeconomic effects tend to be measurable in nationwide econometric models only if the economic effect of the regulation reaches 0.25 percent to 0.5 percent of Gross Domestic Product GDP, or in the range of $52.3 billion to $104.7 billion using 2020 GDP.120 A
regulation with a smaller aggregate effect is not likely to have a measurable effect in macroeconomic terms, unless it is highly focused on a particular geographic region or economic sector, which is not the case with this rule.
The Departments RIA estimates that the total costs of the final rule will be $1.5 billion. Given OMBs guidance, the Department has determined that a full macroeconomic analysis is not likely to show that these costs would have any measurable effect on the economy.
VII. Executive Order 13132, Federalism The Department has 1 reviewed this proposed rule in accordance with Executive Order 13132 regarding federalism and 2 determined that it does not have federalism implications.
The proposed rule would not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government.
VIII. Executive Order 13175, Indian Tribal Governments This proposed rule would not have tribal implications under Executive Order 13175 that would require a tribal summary impact statement. The proposed rule would not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of 119 See
118 Calculated
using growth in the Gross Domestic Product deflator from 1995 to 2020. Bureau of Economic Analysis. Table 1.1.9. Implicit Price Deflators for Gross Domestic Product.

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2 U.S.C. 1532a4.
to the Bureau of Economic Analysis, 2020 GDP was $20.9 trillion. https
www.bea.gov/sites/default/files/2021-04/gdp1q21_
adv.pdf.

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power and responsibilities between the Federal Government and Indian tribes.
List of Subjects in 29 CFR Parts 10 and 23
Administrative practice and procedure, Construction, Government contracts, Law enforcement, Minimum wages, Reporting and recordkeeping requirements, Wages.
Jessica Looman, Acting Administrator, Wage and Hour Division.

For the reasons set out in the preamble, the Department of Labor proposes to amend 29 CFR subtitle A as follows:
PART 10ESTABLISHING A MINIMUM
WAGE FOR CONTRACTORS
1. The authority citation for part 10 is revised to read as follows:

Authority: 5 U.S.C. 301; section 4, E.O.
13658, 79 FR 9851, 3 CFR, 2014 Comp., p.
219; section 4, E.O. 14026, 86 FR 22835;
Secretary of Labors Order No. 012014, 79
FR 77527.

2. Amend 10.1 by adding paragraph d to read as follows:

10.1

Purpose and scope.

d Relation to Executive Order 14026.
As of January 30, 2022, Executive Order 13658 is superseded to the extent that it is inconsistent with Executive Order 14026 of April 27, 2021, Increasing the Minimum Wage for Federal Contractors, and its implementing regulations at 29 CFR part 23. A covered contract that is entered into on or after January 30, 2022, or that is renewed or extended pursuant to an option or otherwise on or after January 30, 2022, is generally subject to the higher minimum wage rate established by Executive Order 14026 and its regulations at 29 CFR part 23.
3. Amend 10.2 by revising the definition of New contract to read as follows:
10.2

Definitions.

New contract means a contract that results from a solicitation issued on or between January 1, 2015 and January 29, 2022, or a contract that is awarded outside the solicitation process on or between January 1, 2015 and January 29, 2022. This term includes both new contracts and replacements for expiring contracts. It does not apply to the unilateral exercise of a pre-negotiated option to renew an existing contract by the Federal Government. For purposes of the Executive Order, a contract that is entered into prior to January 1, 2015

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