(2) The wages of many working Americans
have not kept pace with the cost of providing for
their families.
(3) The Federal Government provides billions of
dollars in subsidies to businesses each year through
both spending programs and the Internal Revenue
Code of 1986.
(4) Recipients of Federal contracts have bene-
fited greatly from the provision of taxpayers’ dollars.
(5) The Congressional Budget Office concluded
that the Federal Government spends more than $30
billion a year on spending and credit programs.
(6) Congress must ensure that Federal dollars
are used responsibly to improve the economic secu-
rity and well-being of Americans across the country.
SEC. 3. POVERTY LEVEL WAGE.
(a) REQUIREMENT.—
(1) GENERAL
RULE.—Except as provided in
paragraph (2), any employer under a Federal con-
tract for an amount exceeding $10,000 or a sub-
contract under a Federal contract for such an
amount shall, except as provided in subsection (b),
pay each of the employer’s employees working on or
hired in conjunction with such contract or sub-
contract—
(A) an hourly wage necessary for such em-
ployee to earn, while working 40 hours a week
on a full-time basis, the amount of the Federal
poverty level for a family of 4 (as published in
the Federal Register by the Department of
Health and Human Services under the author-
ity of section 673(2) of the Omnibus Budget
Reconciliation Act of 1981), or
(B) $7.50 an hour,
whichever is greater.
(2) EXCEPTION.—An employer which is—
(A) a small business concern as defined
under section 3 of the Small Business Act (15
U.S.C. 632), or
(B) a nonprofit organization exempt from
Federal income tax under section 501(c) of the
Internal Revenue Code of 1986 if the ratio of
the total compensation of its chief executive of-
ficer to the compensation of the full-time equiv-
alent of its lowest paid employee is not greater
than 25 to 1,
shall not be required to pay the wage prescribed by
paragraph (1).
(3) SCOPE.—An employer may not avoid the re-
quirement of paragraph (1) by laying off or other-
wise terminating the employment of an employee
with the intention of replacing such employee with
an employee who, under subsection (b), is not eligi-
ble for the subsection (a) wage.
(b) EXCEPTION.—An employee who is participating
in—
(1) an apprenticeship program, or
(2) any other training program which does not
exceed 6 months in duration and which is offered to
an employee while employed in productive work that
provides training, technical and other related skills,
and personal skills that are essential to the full and
adequate performance of the employee’s employ-
ment,
is not eligible for the wage prescribed by subsection (a).
(c) CONTRACT REQUIREMENT.—Any contract be-
tween the Federal Government and any contractor and
any contract between such contractor with a subcontractor
to carry out work for the Federal Government shall re-
quire the contractor or subcontractor to pay the wage pre-
scribed by subsection (a)(1).
(d) ENFORCEMENT.—
(1) SUSPENSION.—If an employer does not pay
the wage required by subsection (a) the Federal con-
tract or subcontract under which such employer was
employing employees shall be suspended.
(2) INELIGIBILITY.—An employer described in
paragraph (1) shall not be eligible for any Federal
contract or subcontract for a period of 5 years be-
ginning on the date the employer does not pay the
required wage.
(3) RESTITUTION.—An employer who does not
pay the wage required by subsection (a) shall be lia-
ble to the United States in an amount equal to the
unpaid wages and in addition an equal amount as
liquidated damages. The Secretary of Labor shall
pay to the employees who were not paid such wage
the amount recovered by the United States under
this paragraph.
SEC. 4. EFFECTIVE DATE.
This Act shall take effect with respect to Federal con-
tracts entered into, renewed, or extended after 90 days
after the date of enactment of this Act.
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