DOL Sets New Minimum Wage Rates For Certain Federal Contracts

On February 6, 2026, the U.S. Department of Labor's Wage and Hour Division issued a Notice announcing new minimum wage rates for workers performing work on or in connection with federal contracts covered by the 2014 Obama-era Executive Order 13658, which established a minimum wage for federal contractors and subcontractors. Effective May 11, 2026, the minimum wage for certain federal contracts will be $13.65 per hour for regular employees and $9.55 per hour for tipped employees.

This change comes less than one year after President Trump's March 2025 Executive Order 14236, which rescinded the 2021 Biden-era Executive Order 14026 raising the contractor minimum wage rate to $15.00 per hour. EO 14236 was silent on EO 13658, leading to uncertainty as to whether the minimum wage previously established by EO 13658 still applied to federal contracts.

In its Notice, the DOL takes the position that EO 13658 remains in effect and generally applies to contracts subject to the Davis-Bacon Act (DBA), 40 U.S.C. § 3141, et seq., and the Service Contract Act (SCA), 41 U.S.C. § 6701, et seq., awarded between January 1, 2015 and January 29, 2022, and not renewed or extended on or after January 30, 2022. The DOL states that these new rates apply specifically to contracts covered by EO 13658.

The DOL will annually review and adjust these wage rates based on inflation. Employers should review their contract awards and prepare to update payroll policies ahead of the effective date to ensure compliance with updated regulations.

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