DOL Sets Federal Contractor Minimum at $14 per Hour, Below Biden-Era $15

The U.S. Department of Labor will raise the minimum wage for federal contractors to $14 per hour, falling short of the $15-per-hour level set during the Biden administration.

The new rate raises pay for some covered contractor workers but maintains a $1 gap with the federal contractor minimum standard established under Biden's Executive Order 14026. That order set the wage floor at $15 per hour for new federal contracts beginning in 2022.

"Despite the increase, the rate remains below Biden-era levels, which hit $15 per hour," according to the Department of Labor's announcement.

What the change covers

The $14-per-hour floor governs worker pay on federal service contracts, construction agreements and procurement projects. The rules apply to private companies holding contracts above specified dollar thresholds with executive agencies, the U.S. Postal Service and certain government corporations.

Federal contractor minimum wages trace to President Barack Obama's Executive Order 13658 in 2014, which set a $10.10-per-hour floor for covered workers. Subsequent executive orders raised the rate and tied adjustments to inflation. The Biden administration's Executive Order 14026 brought the floor to $15 per hour for new contracts and option periods.

The Labor Department's $14 figure signals a downward recalibration from that high-water mark, returning the contractor wage floor closer to where it stood before the 2022 increase.

Who is affected

The policy covers workers employed under federal contracts in industries including food service, custodial work, grounds maintenance, security and building services. Labor union estimates place the affected workforce in the hundreds of thousands nationwide. The Labor Department has not disclosed updated workforce estimates specific to the new $14 rate.

Industry reaction

Federal contractor trade groups have generally opposed wage floor increases, citing higher labor costs on government-funded projects. Labor unions have pushed to retain the $15 standard, framing the contractor minimum as a benchmark for federal procurement pay standards across agencies.

How indexing has worked

Under previous administrations, federal contractor wage floors have been adjusted annually through the Department of Labor's Employment Cost Index or tied to prevailing minimum wage standards. Whether the new $14 floor will follow a similar indexing structure will be determined when implementing guidance is published.

What happens next

The Labor Department is expected to publish implementing guidance in the Federal Register, with an effective date for the new $14 rate to follow. The notice will trigger a public comment period during which contractors, trade groups and labor organizations typically file comments on the proposed wage adjustment.

The $1 gap between the new rate and the Biden-era $15 standard is likely to draw continued scrutiny from labor advocates tracking federal procurement pay policy.