The county where the contractor was performing raised the local minimum wage. The contractor claimed it was entitled to a contract adjustment for the new wage rate. The CBCA denied the claim. While the contractor was entitled to an adjustment for federal rate changes, the government was not required to adjust for local wage changes.
Didlake, Inc. v. General Services Administration, CBCA 7769, 7911
- Local Minimum Wage Hike – The contractor performed janitorial services for GSA in Montgomery County, Maryland. The Department of Labor wage determination for janitorial service in Montgomery County set the minimum wage oat$15.40 per hour. This rate was incorporated into the contract. But in 2017, Montgomery County raised the local minimum wage to $15.65.
- Claim – The contractor submitted a claim alleging it was entitled to an adjustment for the new county minimum wage. The agency denied the claim. The contractor appealed to CBCA.
- No Adjustment – The board denied the appeal. The contract was subject to federal wage laws—the Fair Labor Standards Act and Service Contract Labor Standards. The contract entitled the contractor to an adjustment when the Department of Labor makes new wage determinations. But the regulations incorporated into the contract did not address local wage changes. The obligation to pay the local minimum wage was independent of the terms of the contract. The contractor obligated itself to pay the local minimum wage when it chose to do business in Montgomery County. An adjustment was not required for a local hike in wage rates.
The contractor is represented by Charlotte R. Rosen of Oden Feldman Pittleman PC. The government is represented by Michael Converse of the General Services Administration.
Case summary by Craig LaChance, Editor in Chief
