The U.S. Department of Labor has set new standards for the minimum wage on federal contracts through Executive Order 14026, titled “Increasing the Minimum Wage for Federal Contractors.” Signed by President Biden on April 27, 2021, this Executive Order aims to ensure fair compensation for workers on federal contracts, recognizing that adequately compensated workers contribute to better performance and efficiency in government procurement.

The final rule implementing Executive Order 14026 was published on November 24, 2021, establishing regulations for raising the minimum wage for federal contractors to $15.00 per hour, effective January 30, 2022. Further, beginning January 1, 2023, and annually thereafter, the minimum wage rate is subject to adjustment by the Secretary of Labor to account for economic factors. On September 30, 2024, the Department of Labor announced an increase to $17.75 per hour, effective January 1, 2025.

Key Coverage of Executive Order 14026

The Executive Order’s minimum wage applies to specific types of contracts initiated, renewed, or extended on or after January 30, 2022. These contracts fall under four main categories:

1. Construction Contracts: Procurement contracts covered under the Davis-Bacon Act (DBA).






2. Service Contracts: Contracts governed by the Service Contract Act (SCA), which applies to various service workers.






3. Concessions Contracts: Concessions contracts providing food, beverages, or other services, even if these are exempt from the SCA under 29 CFR 4.133(b).






4. Contracts on Federal Property or Land: Contracts for services related to federal property or provided to federal employees, their families, or the general public.

In addition to applying to new and renewed contracts, these regulations align the federal contractor wage standards with the federal government’s broader goals of economic fairness and efficiency.

Changes for Tipped Employees

A significant update in the final rule concerns tipped employees. As of January 1, 2024, federal contractors are no longer permitted to use tips as a credit toward the Executive Order 14026 minimum wage. This change ensures that all workers, including those who traditionally rely on tips for part of their income, receive the full hourly rate set by the Executive Order. This shift promotes equitable pay across all contract work covered by the order, reinforcing the federal government’s commitment to fair wages.

Implementation and Compliance

The Department of Labor has provided guidance to help federal contractors comply with these wage requirements. Contractors must ensure that all workers on qualifying contracts receive no less than the applicable minimum wage each year. For contracts executed before January 30, 2022, Executive Order 13658 (Establishing a Minimum Wage for Contractors) applies, setting a lower minimum wage rate for those contracts.

Federal contractors and subcontractors impacted by these requirements should review the specific contract conditions and adhere to the rates and standards established. The Wage and Hour Division’s Government Contracts Enforcement team is available for questions at (202) 693-0064 for any concerns or clarifications regarding Executive Orders 13658 and 14026.

Why This Matters

Executive Order 14026 reflects a broader trend in federal policy focused on fair compensation and worker well-being. By ensuring that federal contract workers are paid fairly, the government promotes efficiency and productivity, strengthens the economy, and upholds equitable labor standards. With the rate set to rise to $17.75 in 2025, the policy continues to evolve to support the workforce and strengthen the quality of service on government projects.

• Federal Contractor Employers are required by law to share information with their employees on employment laws and provide other work-related information. They should be posted in a prominent place where employees have access such as a break room or time-clock area.

Where can I find more information?

• All In One Poster Company is the leading provider of labor law and safety posters for all 50 states in the USA. Our website: https://www.allinoneposters.com/






• Poster Update Log: Federal Contractor Package






• https://www.dol.gov/agencies/whd/government-contracts/eo14026

This state mandate effects Federal Contractor posters, requiring them to be REPLACED. Our All In One Poster keeps you compliant with one simple laid out poster.