The U.S. Department of Labor (DOL) has finalized a new minimum wage rate for certain federal contractors covered under Executive Order (EO) 13658. The updated wage rates will take effect May 11, 2026, requiring employers with qualifying contracts to review pay practices and compliance procedures.
New Federal Contractor Minimum Wage Rates
According to the recently published Federal Register notice, the updated rates are:
- $13.65 per hour for non-tipped employees performing work on or in connection with covered federal contracts
- $9.55 per hour as the minimum cash wage for tipped employees working on such contracts
These annual adjustments are part of the government’s ongoing wage index process for contracts still subject to EO 13658.
Which Contracts Are Covered
Only certain federal contracts remain subject to EO 13658’s wage requirements. Specifically, according to the DOL,
- Contracts entered into, renewed, or extended between January 1, 2015, and January 29, 2022
- Contracts that have not been renewed or extended on or after January 30, 2022
Employers should carefully review contract dates to determine whether the updated wage rates apply.
Employer Compliance Steps Before May 11, 2026
For federal contractors covered by EO 13658, meeting compliance requirements will involve several practical steps:
- Updating payroll systems to reflect new wage rates
- Verifying which employees perform work connected to covered contracts
- Notifying subcontractors of updated wage obligations
- Pre-ordering the updated Federal Contractors Workplace Poster
Early preparation can help prevent payroll errors, contract violations, or audit issues.
Looking Ahead
While broader federal wage policy may shift with future executive actions, the DOL’s annual adjustment process under EO 13658 continues to raise minimum wage levels where applicable. Employers should stay alert for further guidance from the DOL’s Wage and Hour Division and regularly review contract portfolios to confirm ongoing obligations.
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