DOL: Some Federal Contract Workers Set to Receive $13.65 Minimum Wage

Takeaways

• Effective 05.11.26, the applicable minimum wage for employees working on covered federal contracts is $13.65 per hour. 
• The minimum wage increase applies only to federal government contracts entered into between 01.01.15 and 01.29.22.
• Uncertainty remains whether there is a federal contractor minimum wage for contracts entered into after 01.30.22.

Related links

• 91 Fed. Reg. 5783, Minimum Wage for Federal Contracts Covered by Executive Order 13658
• EO 13658, Establishing a Minimum Wage for Contractors
• EO 14026, Increasing the Minimum Wage for Federal Contractors 
• EO 14236, Additional Rescissions of Harmful Executive Orders and Actions
• Trump Revokes Biden Federal Contractor Minimum Wage Mandate: What to Expect Next

Article

The Department of Labor (DOL) has announced that a $13.65 hourly minimum wage will apply to workers on certain federal government contracts effective May 11, 2026. This is an increase over the current $13.30 per hour rate. For tipped workers on covered federal contracts, the applicable minimum cash wage will increase to $9.55 per hour from the current hourly rate of $9.30.

The new minimum wage will apply to federal contracts entered into between Jan. 1, 2015, and Jan. 29, 2022, that were not renewed or extended on or after Jan. 30, 2022. The new rate does not apply to federal contracts entered into after Jan. 30, 2022.

Coverage Window

The DOL notice states that the $13.65 hourly rate applies to employees working on federal contracts that are covered by Executive Order (EO) 13658. EO 13658, issued by President Barack Obama in 2014, was the first to establish a minimum wage requirement for employees on federal contracts that is higher than the standard federal minimum wage. The EO set a $10.10 minimum wage rate for federal contractors, with annual rate adjustments to be determined by the secretary of labor.

EO 13658 was in effect between Jan. 1, 2015, and Jan. 29, 2022, at which point it was superseded (but not revoked) by EO 14026, issued by President Joe Biden in 2021. The Biden EO increased the applicable wage floor to $15 per hour, effective Jan. 30, 2022, for contracts then in effect, or renewed or extended after that date, adjusted annually for inflation. (The minimum wage under the Biden EO had increased to $17.75 per hour as of Jan. 1, 2025.)

On Mar. 14, 2025, President Donald Trump issued EO 14236, rescinding the Biden EO. (See Trump Revokes Biden Federal Contractor Minimum Wage Mandate: What to Expect Next.) President Trump’s EO did not rescind the Obama EO, however. Therefore, contracts entered into, renewed, or extended prior to Jan. 30, 2022, remain subject to EO 13658.

The minimum wage for federal contracts covered under EO 13658 will increase to $13.65 per hour, in accordance with EO 13658’s mandated inflation-adjusted increase. The increased cash wage for tipped employees to $9.55 is also enacted pursuant to EO 13658’s requirements.

The DOL notice acknowledged that “the number of contracts subject to Executive Order 13658 has significantly decreased over the past several years,” but the agency expects “there will be some existing contracts with the Federal Government that would not have qualified as a covered ‘new contract’ for purposes of Executive Order 14026 and that remain subject to the minimum wage requirements of Executive Order 13658.”

Uncertainty Remains

The $13.65 minimum wage rate will not apply to contracts issued after Jan. 30, 2022. The DOL has not provided guidance on what rate is in effect for contracts entered into after that date. It remains unclear whether any federal wage floor beyond the standard minimum wage of $7.25 applies to such contracts.

Adding to the uncertainty is the fact that a DOL rule implementing the Biden EO remains intact. After President Trump rescinded the Biden EO, the DOL indicated it would not enforce the implementing rule, but the agency has not formally revoked it. According to the DOL’s spring 2025 regulatory agenda (released in September 2025), rulemaking to rescind the implementing rule is in the final rule stage. For now, the Biden-era rule remains on the books.

The Biden EO and corresponding DOL rule have been the subject of several legal challenges. Litigation in three federal courts of appeal created a circuit split over the scope of presidential authority under the Procurement Act to impose minimum wage mandates for federal contractors. In two of those cases, the parties have agreed that the Trump EO rescinding the Biden rule rendered the cases moot. In the U.S. Court of Appeals for the Ninth Circuit (where the DOL had petitioned for en banc rehearing of a panel decision invalidating the Biden EO), however, the state governments that filed the underlying suit have told the court that until the DOL formally rescinds the rule, the rule continues to have the force of law, regardless whether it is currently being enforced, and the states do not regard the matter as moot.

Takeaways

The applicable minimum wage for employees working on or in connection to federal contracts has been on unsteady terrain for several years, presenting a considerable compliance and business challenge for federal contractors.

It is possible the DOL will provide clarity, issuing a final rule rescinding the Biden-era rule and setting a new minimum wage mandate for federal contracts entered into post-Jan. 30, 2022. Alternatively, the agency could make clear that no higher wage floor will be imposed.

In the meantime, federal contractors should consult with counsel to ensure they are paying the proper wage rate to covered workers. They must also be sure to comply with applicable state minimum wage rates in the jurisdiction in which they perform federal contract work and with prevailing wage rates that may apply.

Jackson Lewis attorneys are available to assist employers with the legal requirements related to government contracts and other workplace matters.