We believe that the Department of Labor’s new minimum wage rules do not apply to financial institutions, unless an institution enters into a procurement contract with the federal government (for example, to provide financial services in a federal building).

The minimum wage rules only apply to four specific types of procurement contracts, ranging from construction to laundry services provided to the federal government. After examining each of the four specific types of covered contracts, we do not believe that they would encompass a financial institution’s acceptance of deposit insurance provided by the federal government.

It is possible that a bank could choose to enter into a federal procurement contract that would subject it to the minimum wage requirements. For example, the Department of Labor has stated that a credit union providing financial services in a federal building would be covered by the minimum wage requirements. On the other hand, certain credit card services are exempt they meet several prerequisites under the Service Contract Act.

For resources related to our guidance, please see:

• 29 CFR 10.3(a) (“This part applies to any new contract with the Federal Government, unless excluded by §10.4, provided that: (1)(i) It is a procurement contract for construction covered by the Davis-Bacon Act; (ii) It is a contract for services covered by the Service Contract Act; (iii) It is a contract for concessions . . . ; or (iv) It is a contract entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public; . . .”)

• Department of Labor Final Rule, Establishing a Minimum Wage for Contractors, 79 Fed. Reg. at 60633, 60655 (October 7, 2014) (“Additional examples of agreements that would generally be covered by the Executive Order . . . include delegated leases of space in a Federal building from an agency to a contractor whereby the contractor operates a . . . credit union . . . in the Federal agency building to serve Federal employees and/or the general public.”)

• 29 CFR 4.123(e)(2)(i)(B) (Creates an exception from the Service Contract Act’s coverage for “financial services involving the issuance and servicing of cards (including credit cards, debit cards, purchase cards, smart cards, and similar card services),” provided that several other criteria are met.)