Minimum Wage for Certain Federal Contractors Will Increase May 11, 2026

On February 9, 2026, the U.S. Department of Labor (DOL) announced that the minimum wage for federal contractors covered by Executive Order 13658 will increase to $13.65 per hour on May 11, 2026, up from the current rate of $13.30 per hour.

Minimum wage for federal contractors is a complicated area that has seen significant developments and uncertainty in recent years. For covered California employers, the discussion has been largely academic since California’s minimum wage is higher than federal contractor minimum wages. However, this issue is important for federal contractors to monitor, especially those with workers outside of California. Here’s a quick snapshot of the status of federal contractor minimum wages.

First, Executive Order 13658, issued in 2014 by President Obama, set minimum wage requirements for contracts made, renewed or extended between January 1, 2015, and January 29, 2022. It set the initial minimum wage at $10.10 per hour and provided for future adjustments for inflation, most recently rising to $13.30 per hour on January 1, 2025.

For subsequent contracts, President Biden issued Executive Order 14026, mandating federal contractor minimum wage requirements for contracts made, renewed or extended on or after January 30, 2022. The order set the minimum wage for covered contracts at $15 per hour with annual adjustments for inflation, most recently scheduled to increase to $17.75 per hour in 2025. As previously reported, however, Executive Order 14026 was subject to several legal challenges.

The Ninth Circuit Court of Appeals concluded that the order exceeded the authority granted to the President and the Department of Labor. However, both the Fifth and Tenth Circuit courts concluded that the order was valid. Despite the circuit split on the issue, the U.S. Supreme Court declined to take up the issue in early 2025.

Then, on March 14, 2025, President Trump issued an executive order that rescinded President Biden’s Executive Order 14026. With the order rescinded and no longer in effect, both the Fifth Circuit and Tenth Circuit cases were dismissed as moot. The DOL’s regulations on Executive Order 14026 have not been officially withdrawn yet, but the agency has stated it will no longer enforce the order and will take steps to rescind the related regulations.

President Trump’s order did not, however, rescind Executive Order 13658, which remains in effect. The DOL noted in its rate change notice that although the number of contracts subject to Executive Order 13658 has significantly decreased over the past several years, some existing contracts still fall under the order and remain subject to the minimum wage requirements.

Federal contractors subject to Executive Order 13658 should take the necessary steps to prepare for the May rate increase. Additionally, all federal contractors should continue to monitor this area for future developments, including revised DOL regulations and guidance for contracts formerly subject to Executive Order 14026.

Federal contractors should consult legal counsel with any questions they may have about applicable wage rates or other federal contractor requirements. Remember that federal contractors are subject to applicable state minimum wage rates, which, in California, are currently $16.90 per hour statewide and even higher in certain cities and counties under local ordinances.

James W. Ward, J.D., Employment Law Subject Matter Expert/Legal Writer and Editor, CalChamber

CalChamber members can read more about Wage and Hour Requirements for Specific Industries in the HR Library. Not a member yet? See how CalChamber can help you.

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