Military fast food outlets get temporary reprieve from new wage rules

The Labor Department re-evaluates the new minimum wage rules.

SPRINGFIELD, V.A.–The Labor Department has pulled back — at least temporarily — from new minimum wage rules that had led several fast-food restaurants to end their contracts on military installations and prompted others to possibly follow suit.

Labor officials are “reevaluating” wage determinations for fast food workers and expect to “reissue industry-specific fast food wage determinations in the near future,” according to a departmental announcement sent to interested parties and contracting offices.

At issue are recently implemented Labor Department rules for fast food workers on federal contracts under the Service Contract Act that require an increase in their minimum wage, varying by region.

The rules also require payment of new, additional “health and welfare” benefits at a rate of $3.81 per hour.

In a request for a waiver from these new wage rules regulations, the Navy noted that in six areas in Florida, California and Virginia, the increase in the new mandated hourly wage ranges from 72 percent to 76 percent.

Last year, DoL decided that fast food workers under federal contracts would be subject to these requirements, and included the codes in their wage determinations, although they had not been in the past. DoL has now removed the codes for fast food workers from these wage determinations.

With those rules now removed, contracting agencies will have to submit an e98 request form to Labor officials before they set wage and benefit rates for fast food workers in federal contracts. Meanwhile, Labor officials expect to finish their reevaluation soon.

In March, McDonald’s restaurants closed on three Navy bases, and Marine Corps officials have said one will close on a Marine base. Another eatery, “I Love Country,” has closed at Naval Station Pearl Harbor, Hawaii.

The majority of fast food concessions on Army and Air Force bases are unaffected because they are operated directly by the Army and Air Force Exchange Service, not by contract.

Russell Beland, deputy assistant secretary of the Navy for military manpower and personnel, had sent a letter to DoL April 8 asking for an exemption from the wage regulations.

In that letter, Beland said Navy and Marine Corps exchange officials estimate that unless relief is granted, up to 390 fast food concession operations would close on installations across the U.S. and its territories, with a loss of nearly 5,750 jobs, many held by military family members and veterans.