Federal Contractor Minimum Wage Order Rescinded by Trump Administration

Background

The U.S. Department of Labor (DOL) previously implemented two key rules impacting the minimum wage for federal contract workers:

In 2014, the DOL issued regulations enforcing EO 13658, which increased the minimum wage for certain federal contractors.

In 2021, the DOL issued additional rules to implement EO 14026, mandating a higher wage rate for contracts signed, extended, or renewed on or after January 30, 2022.

Under EO 14026, federal contractors were required to pay at least $17.75 per hour starting on January 1, 2025, for covered contracts. However, contracts entered into, renewed, or extended before January 30, 2022, remained subject to the lower wage requirements of EO 13658.

Key Changes and Implications

With the March 2025 EO revoking EO 14026, federal contractors are no longer required to pay the $17.75 per hour wage rate in covered circumstances. Instead:

Contracts governed by EO 13658 are still bound by the previous minimum wage of $13.30 per hour ($9.30 for tipped employees), where applicable.

For contracts formerly subject to EO 14026, it is unclear whether they now fall under the scope of EO 13658.

In the absence of explicit clarification, federal contractors must comply with the highest applicable wage rate, whether it be the federal minimum wage, state minimum wage, or any other relevant regulation.

Uncertainty Around DOL Regulations

The DOL has not yet clarified whether it will formally rescind the regulations enacted under EO 14026. However, since the underlying authority for these regulations has been revoked, they are presumed unenforceable moving forward.

Recommendations for Federal Contractors

Federal contractors should:

• ‍Closely monitor updates from the DOL regarding the potential repeal of associated regulations.
• ‍Consult legal counsel to assess how the changes may impact their wage obligations and ensure compliance with all applicable wage laws.
• ‍Stay informed about potential litigation or regulatory challenges that could affect the implementation or interpretation of the March 2025 EO.

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