On March 14, 2025, President Trump issued an executive order ending the obligation to pay individuals working on or in connection with certain federal contracts or subcontracts a minimum wage currently set at $17.75 per hour. In particular, Trump has rescinded 18 Biden executive orders, including Biden’s Executive Order 14026 that had increased the federal contractor minimum wage.

A federal contractor minimum wage was first established by President Obama through his Executive Order 13658 of February 12, 2014 (Establishing a Minimum Wage for Contractors) (the “Obama E.O.”). The Obama E.O. applied to government contracts and subcontracts involving construction, services, or concessions or connected with federal property or lands and related to offering services for federal employees, their dependents, or the general public. Individuals working on or in connection with one of these types of covered contracts were entitled to a minimum wage originally set at $10.10 per hour ($4.90 per hour for tipped employees). The minimum wage was subject to annual increases tied to the Consumer Price Index. As of January 1, 2025, the minimum wage under the Obama E.O. was $13.30 per hour ($9.30 per hour for tipped employees).¹

President Biden issued Executive Order 14026 on April 27, 2021 (the “Biden E.O.”). In general, the Biden E.O. applied to the same types of contracts and workers as did the Obama E.O., but further increased the minimum wage and began a process of phasing out the lower minimum wage for tipped employees.² As with the Obama E.O., the Biden E.O. called for annual increases in the minimum wage based on changes in the Consumer Price Index. As of January 1, 2025, the wage was set at $17.75 per hour for both tipped and non-tipped federal contractor workers.

Biden’s E.O. and the higher minimum wage applied to contracts or subcontracts entered into or renewed, extended, or modified after January 30, 2022. Existing contracts already covered by the Obama E.O. would remain subject to that executive order and the lower minimum wage for the duration of the contract unless the contract was renewed, extended, or modified after January 30, 2022, in which case the Biden E.O. would then apply. This was effectuated by language in the Biden E.O. providing that the Obama E.O. “is superseded, as of January 30, 2022, to the extent it is inconsistent with this order.”

Accordingly it was assumed that the Obama E.O. would eventually become irrelevant and the federal contractor minimum wage would be determined only by the Biden E.O. This was recognized by the Department of Labor in its September 30, 2024 Notice announcing changes in the minimum wage for 2025:

The Department anticipates that, in the relatively near future, essentially all covered contracts with the Federal Government will qualify as “new” contracts under Executive Order 14026 and be subject to its higher minimum wage rate. Until such time, however, Executive Order 13658 and its regulations at 29 CFR part 10 must remain in place. Accordingly, the Department will continue announcing annual updates to Executive Order 13658's minimum wage rates for existing contracts still covered by Executive Order 13658.

With the rescission of the Biden E.O., however, a question now arises as to whether government contractors that were subject to the Biden E.O. are required to pay the $13.30 hourly wage set by the Obama E.O. or whether they are now subject to just the general federal minimum wage of $7.25 (or applicable state minimum wage).

Without a doubt, contractors that are subject to the Obama E.O. must continue to comply with its minimum wage requirements. There is less clarity as to what is required of contractors that were subject to the Biden E.O. and as to what will be required with regard to contracts entered into or renewed, extended, or modified after the revocation of the Biden E.O. on March 14, 2025. We expect the Department of Labor to offer guidance with regard to these questions and will report back when it does. Pending such further guidance, contractors should contact their legal counsel to discuss how to proceed.