Executive Order 14026 Rescinded: Wage Rate, Tips, and Back Pay

Executive Order 14026, which set a $15.00 minimum wage for federal contractors and indexed it to inflation, was rescinded on March 14, 2025, when President Trump signed Executive Order 14236. The Department of Labor has stopped enforcing it, and federal contractor minimum wages have reverted to the older Executive Order 13658, which sets a rate of $13.65 per hour effective May 11, 2026.¹²

What Changed on March 14, 2025

Executive Order 14236 revoked EO 14026 along with several other Biden-era directives. The Department of Labor followed with an announcement that it is no longer enforcing EO 14026 or its implementing regulation at 29 CFR part 23, and that it is taking steps to formally rescind the regulation.¹ As of early 2026, 29 CFR part 23 still appears in the electronic Code of Federal Regulations, but the DOL treats it as a dead letter.

The last rate published under EO 14026 was $17.75 per hour, effective January 1, 2025. That rate applied for roughly ten weeks before revocation.

The Wage Rate That Applies Now

With EO 14026 gone, federal contractor wages fall back to Executive Order 13658, which President Obama signed in 2014. The DOL has published the 2026 EO 13658 rates: a general minimum wage of $13.65 per hour and a tipped-employee cash wage of $9.55 per hour, both effective May 11, 2026.² That is more than $4.00 an hour below the last EO 14026 figure.

Whether that drop actually reaches a worker’s paycheck depends on the contract. Many workers under Service Contract Act or Davis-Bacon Act wage determinations already earn well above both executive order floors, so the ceiling change does nothing for them. The workers who feel it hardest are those paid at or near the federal minimum.

Tipped Workers Lose Ground

The change hits tipped employees on covered contracts especially hard. EO 14026 had phased out the tip credit entirely, requiring the full minimum wage in cash by 2024. Under EO 13658, the tip credit is back. The 2026 cash wage of $9.55 per hour is roughly 70 percent of the $13.65 general rate.² For food-service and hospitality workers on military bases and other federal property, that is a real pay cut.

State and Local Minimum Wages Still Apply

Neither EO 14026 nor EO 13658 overrides a higher state or local minimum wage. Contractors operating in jurisdictions where the state or local floor already exceeds $13.65 per hour will not see the reversion in their payroll obligations, because the higher local rate still governs.³ Contractors with employees in multiple states should check each location independently before adjusting anyone’s pay.

The Nondisplacement Rule Is Also Gone

Executive Order 14055, which required a successor contractor on a Service Contract Act engagement to offer jobs to the predecessor’s workers before hiring outside, was revoked separately by Executive Order 14148 on January 20, 2025.⁴ The DOL formally rescinded the implementing regulation at 29 CFR part 9 on December 22, 2025.⁵ Successor contractors on new service contracts no longer have a federal obligation to hire the outgoing workforce.

Back-Wage Claims From the Period EO 14026 Was Active

Revocation does not erase obligations that existed while the order was in force. Workers who were paid less than the required EO 14026 rate at any point between January 30, 2022, and March 14, 2025, may still have viable back-wage claims. Contractors carrying unresolved wage disputes from that window should treat them as live liabilities, not as issues cleaned up by the change in administration.

During that period, the rate schedule was:

$15.00 per hour from January 30, 2022, with annual increases each January 1 tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, rounded to the nearest $0.05.³
$17.75 per hour effective January 1, 2025, the last rate published before revocation.

Coverage during that period extended to four categories of federal contracts, provided workers’ wages were governed by the Fair Labor Standards Act, the Service Contract Act, or the Davis-Bacon Act: service contracts under the McNamara-O’Hara Service Contract Act, construction contracts under Davis-Bacon, concession contracts (including some the DOL had previously excluded), and contracts connected to federal property or lands that involved offering services to federal employees, their dependents, or the public.⁶ Food service on military bases and vendors in national parks are typical examples of the last two categories.

Some work was outside the order even during its active years. Grants, contracts for manufacturing goods for the government (including Walsh-Healey work), work performed outside the United States, and workers in bona fide executive, administrative, or professional roles under FLSA overtime rules were not covered.³

Prime contractors were required to flow the minimum wage clause down through every tier of subcontracting during the period the order was active. A prime that failed to include the clause was responsible for its subcontractor’s wage violations, and that exposure survives the revocation for the years the order was in force.

What Contractors Still Have to Do

Revocation of EO 14026 does not reduce federal contractor wage obligations to $7.25 per hour. Three separate obligations remain:

Executive Order 13658 sets the current contractor minimum at $13.65 per hour ($9.55 cash for tipped employees) effective May 11, 2026.²
Service Contract Act and Davis-Bacon Act wage determinations, which often exceed either executive order rate, apply independently to contracts within their scope.
Higher state and local minimum wages continue to govern where they exceed the federal contractor rate.

For contractors, the near-term work is checking each active contract against the correct floor for its jurisdiction and worker category, updating payroll where the reversion actually changes the required rate, and separately resolving any outstanding wage claims tied to the years EO 14026 was in force.

1
U.S. Department of Labor. Final Rule: Increasing the Minimum Wage for Federal Contractors (Executive Order 14026)
2
Federal Register. Minimum Wage for Federal Contracts Covered by Executive Order 13658, Notice of Rate Change in Effect
3
eCFR. 29 CFR Part 23 – Increasing the Minimum Wage for Federal Contractors
4
Federal Register. Initial Rescissions of Harmful Executive Orders and Actions
5
U.S. Department of Labor. Final Rule: Nondisplacement of Qualified Workers under Service Contracts (Executive Order 14055)
6
GovInfo. Executive Order 14026 – Increasing the Minimum Wage for Federal Contractors