Federal Contractor Minimum Wage Change
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APPLIES TO All Employers with Covered Federal Contracts |
EFFECTIVE March 14, 2025 |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion:
President Trump recently issued an order rescinding Executive Order 14026 which had most recently increased the minimum wage for federal contractors to $17.75 per hour on January 1, 2025. President Biden’s 2022 Executive Order 14026 superseded President Obama’s 2014 Executive Order 13658 at the time. With Executive Order 14026 rescinded, the minimum wage rule currently falls to Executive Order 13658. This means that the federal contractor minimum wage is currently $13.30 per hour ($9.30 for covered tipped employees) for applicable federal contracts.
For employers who already increased minimum wages to $17.75 per hour at the beginning of the year, those rates may still be maintained; a decease in wage rates is not required. For those looking to make an adjustment, wage rates may be decreased on a prospective or going-forward basis, not on a retroactive basis for wages already earned. Keep in mind that some states and localities have minimum wage requirements higher than the currently applicable federal contractor minimum. Additionally, federal contracts may also still be covered by prevailing wage laws with higher requirements. Employers should review federal contracts with legal counsel to determine the impact of this change.
Action Items
- Review federal contracts to determine applicable minimum wage requirement.
- Evaluate whether wage rate adjustments are appropriate on a prospective basis.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase