---
kind: "section"
citation: "5 C.F.R. § 532.205"
title: "5"
number: "532.205"
heading: "The use of Federal, State, and local minimum wage requirements in determining prevailing rates."
url: "https://uscodex.org/cfr/5/532.205"
---

# §532.205. The use of Federal, State, and local minimum wage requirements in determining prevailing rates.

- (a) Wage schedules, including special schedules, shall not include any rates of pay less than the higher of:
  - (1) The minimum rate prescribed by section 6(a)(1) of the Fair Labor Standards Act of 1938, as amended, or
  - (2) The highest State or local minimum wage rate in the local wage area which is applicable to the private industry counterparts of the single largest Federal industry/occupation in the wage area.
- (b) Wage data below the minimum wage rates prescribed by section 6(a)(1) of the Fair Labor Standards Act of 1938, as amended, shall not be used in determining prevailing rates.
- (c) Adjustments to regular wage schedules to comply with the minimum wage rate determined to be applicable under [paragraph (a)](#a) of this section shall be computed as follows:
  - (1) The step 2 rate of grade 1 of the nonsupervisory wage schedule shall be set at a rate which, upon application of the 4 percent step-rate differential, provides a step 1 rate which is equal to the applicable minimum wage rate.
  - (2) An intergrade differential shall be determined as 5 percent of the rate established as the step 2 rate of grade 1, rounded to the nearest whole cent. This intergrade differential shall be added to the step 2 rate of each grade, beginning with grade 1, to determine the step 2 rate for the succeeding grade until the grade is reached at which the step 2 rate established through the wage survey process equals or exceeds the rate determined under this procedure. Rates of all grades above that point shall be computed in accordance with [§ 532.221(b)](/cfr/5/532.221.md?p=b) of this subpart.
  - (3) Steps 1, 3, 4, and 5 of each grade adjusted under [paragraph (c)](#c) of this section shall be set at 96, 104, 108, and 112 percent of the step 2 rate, respectively.
  - (4) The leader and supervisory wage schedule grades corresponding to each nonsupervisory grade adjusted under [paragraph (c)](#c) of this section shall be constructed in accordance with the procedures of [§ 532.203](/cfr/5/532.203.md) of this subpart, on the basis of the step 2 rates established under this paragraph for the nonsupervisory wage schedule grades.
- (d) All wage schedule adjustments made under this section shall be effective on the effective date of the applicable minimum wage rate.

## Notes

### Authority

Authority: 5 U.S.C. 5343, 5346. Sec. 532.707 also issued under 5 U.S.C. 552.

### Source

Source: 46 FR 21344, Apr. 10, 1981, unless otherwise noted.