On November 24, 2021, the Department published the final rule, “Increasing the Minimum Wage for Federal Contractors,” This final rule introduced regulations to implement Executive Order 14026, “Increasing the Minimum Wage for Federal Contractors,” which was signed by President Joseph R. Biden Jr. on April 27, 2021. Executive Order 14026 states that the Federal Government’s procurement interests in economy and efficiency are promoted when the Federal Government contracts with sources that adequately compensate their workers. The Executive Order raises the minimum wage paid by those contractors to workers performing work on or in connection with covered federal contracts to $15.00 per hour, beginning January 30, 2022; and beginning January 1, 2023, and annually thereafter, an amount determined by the Secretary of Labor (Secretary). The Department’s final rule established standards and procedures for implementing and enforcing the minimum wage protections of Executive Order 14026, and became effective on January 30, 2022.
On September 28, 2023, the Department of Labor published a notice in the Federal Register announcing that, beginning January 1, 2024, the Executive Order 14026 minimum wage rate will increase to $17.20 per hour (Minimum Wage for Federal Contracts Covered by Executive Order 14026, Notice of Rate Change in Effect as of January 1, 2024). This Executive Order minimum wage generally applies to workers performing work on or in connection with federal contracts that are entered into, renewed, or extended (pursuant to an option or otherwise) on or after January 30, 2022, in the following four categories:
Procurement contracts for construction covered by the DBA;
Service contracts covered by the SCA;
Concessions contracts, including any concessions contract excluded from the SCA by the Department’s regulations at 29 CFR 4.133(b); and
Contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.[1]
Additionally, beginning on January 1, 2024, contractors may no longer credit employee tips toward the Executive Order 14026 minimum wage, and tipped employees covered by Executive Order 14026 will be entitled to a cash wage of at least $17.20 per hour. Contractors covered by Executive Order 14026 must ensure that workers receive no less than the minimum wage rates in effect during each calendar year in which a covered contract is performed.
Contracts in the four categories described above that were entered into, extended, or renewed prior to January 30, 2022, are generally subject to a lower minimum wage rate established by Executive Order 13658, “Establishing a Minimum Wage for Contractors.” Questions relating to Executive Orders 13658 and 14026 may be directed to the Wage and Hour’s Division of Government Contracts Enforcement at (202) 693-0064.
Based on an order issued by the U.S. District Court for the Southern District of Texas on September 26, 2023, the minimum wage requirements of the final rule implementing Executive Order 14026 are not currently being enforced as to contracts or subcontracts to which the states of Texas, Louisiana, or Mississippi (including their agencies) are a party.
[1] Based on an order issued by the U.S. Court of Appeals for the Tenth Circuit on February 17, 2022, the minimum wage requirements of the final rule implementing Executive Order 14026 are not currently being enforced as to “contracts or contract-like instruments entered into with the federal government in connection with seasonal recreational services or seasonal recreational equipment rental for the general public on federal lands.”
Additional Information
- Final Rule: Increasing the Minimum Wage for Federal Contractors
- Secretary Walsh remarks on the Minimum Wage Executive Order Final Rule
- Proposed Rule: Increasing the Minimum Wage for Federal Contractors
- Frequently Asked Questions
- Side-by-Side Comparison of EO 13658 and EO 14026
- SocialMedia Toolkit(Spanish)
- 5 Numbers: Minimum Wage Final Rule (YouTube)
- Executive Order 14026: Increasing the Minimum Wage For Federal Contractors (YouTube)
- Poster: Worker Rights Under Executive Order 14026: Federal Minimum Wage for Contractors(PDF) Spanish (PDF)
Based on a decision issued by the U.S. Court of Appeals for the Tenth Circuit on February 17, 2022, the final rule’s requirements are not currently being enforced as to “contracts or contract-like instruments entered into with the federal government in connection with seasonal recreational services or seasonal recreational equipment rental for the general public on federal lands” while an appeal is pending before that court. The final rule’s requirements remain in effect for all other contracts subject to the rule.
