Last year, President Donald Trump withdrew a Biden-era executive order setting the minimum wage for workers employed by federal contractors at $17.75. This week, the Department of Labor’s Wage and Hour Division announced a more modest increase in the minimum wage from $13.30 to $13.65. That wage level is tied to inflation and will be periodically reset by DOL. The minimum wage for tipped employees will increase to $9.55.

Most federal contractors pay well above this level. In the past, the minimum wage has primarily affected vendors in the hospitality, retail, food service, janitorial, and other lower-wage industries. Federal contractors providing these services in national parks or on military bases are particularly impacted by changes to the minimum wage. The new wage rates take effect May 11, 2026.

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