Federal Contractor Minimum Wage Rates To Increase on January 1, 2025

October 2, 2024

What's New

The minimum wage rates for work performed on some government contracts will increase January 1, 2025, the U.S. Department of Labor announced September 30, 2024. The rate on government contracts subject to President Obama’s Executive Order 13658 — which affects government contracts signed, renewed, or extended before January 30, 2022 — will increase from $12.90 to $13.30. The rate on contracts subject to President Biden’s Executive Order 14026 — which affects government contracts signed, renewed, or extended on or after January 30, 2022 — will increase from $17.20 an hour to $17.75 an hour.

Neither E.O. applies to contracts for supplies and materials.

Both E.O.s contain an escalator clause that requires DOL to adjust the federal contractor minimum wage annually based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). 

What It Means

Both E.O.s have been challenged in court, with some courts ruling that the EOs exceeded Presidential authority and others upholding them. While the litigation continues, contractors subject to one or both E.O.s must comply.

What You Should Do

Covered federal contractors must pay their employees at least the new minimum wage and display posters with the new wage rate as of January 1, 2025. Posters reflecting the new wage rates will be available on DOL’s Wage & Hour Division (WHD) website on January 1, 2025.

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