Minimum Wage Increase for Federal Government Contractors

In April 2021, President Biden issued Executive Order 14026, a significant policy change that increased the minimum wage for employees of federal government contractors to $15. This increase is not a one-time adjustment but will be regularly adjusted for inflation, ensuring fair compensation for workers.

Executive Order (EO) 14026 requires that federal contractors pay workers performing work on or in connection with covered contracts at least the minimum wage in effect. From January 1, 2024, through December 31, 2024, the minimum wage is $17.20 per hour.

Executive Order 14026, and its increase in the federal contractor employee minimum wage, applies to federal contracts after January 30, 2022. This includes existing federal contracts that are renewed or extended after this date. The minimum wage will be adjusted every year thereafter, as determined by the Secretary of Labor in accordance with EO 14026 and appropriate regulations. It's important to note that the increase will apply to contracts for work within the United States and its territories.

Construction contracts covered by the Davis-Bacon Act, services covered by the Service Contract Act, and contracts with the federal government in connection to federal property or lands and related to offering services for federal employees, their dependents, or the general public and with wages governed by the Fair Labor Standards Act, Service Contract Act, or Davis-Bacon Act.