The US Department of Labor will increase the minimum hourly wage for certain federal contractors to $14.05, with the minimum wage for eligible tipped workers rising to $9.85 per hour.
The updated rates are set to take effect 90 days after the notice is published in the Federal Register. They apply to a limited group of contracts covered by Executive Order 13658, rather than all federal contracts.
The current rates under this order are $13.65 per hour for non-tipped workers and $9.55 for tipped workers. The increase follows the restoration of the earlier contractor wage framework after President Donald Trump revoked President Joe Biden’s Executive Order 14026 in March 2025.
How the Federal Contractor Minimum Wage Changed
The federal contractor minimum wage has shifted under successive administrations. In 2014, President Barack Obama signed Executive Order 13658, setting the minimum wage at $10.10 per hour from January 2015, with annual adjustments.
In 2022, President Joe Biden introduced a $15-per-hour minimum wage for covered federal contractors under Executive Order 14026. That order applied to certain contracts entered into, renewed, or extended on or after January 30, 2022.
After the order was revoked in March 2025, Executive Order 13658 remained applicable to some existing contracts. The Department of Labor’s notice updates the wage rates for contracts that remain covered by that earlier order.
Which Contracts Are Covered?
The revised rates apply to certain contracts entered into between January 1, 2015, and January 29, 2022, that were not renewed or extended on or after January 30, 2022. The number of contracts covered by the earlier order has declined over time and is expected to continue dwindling.
For HR and payroll teams working with federal contractors, the key step is to confirm which contracts remain subject to Executive Order 13658 before applying the updated rates. The new minimums do not represent a universal wage increase for all federal contractors.
Source: US Department of Labor notice, as reported by HR Dive.
