2025 Minimum Wage Increase for Contracts Covered by Executive Order 14026

Each year, the Department of Labor publishes notices of wage rates associated with work covered by federal contracts. Most recently, Executive Order (EO) 14026 details an increase in these wage rates, along with certain exemptions.

Effective January 1, 2025, the minimum wage for federal contracts covered by EO 14026 will increase from $17.25 (2024 rate) to $17.75. The EO minimum wage generally applies to work performed on or in connection with federal contracts entered into, renewed, or extended on or after January 30, 2022.

The following four types of contracts covered by EO 14026 apply to most of our clients:

• Service contracts covered by the McNamara-O’Hara Service Contract Act (SCA)
• Procurement contracts for construction covered by the Davis-Bacon Act (DBA)
• Contracts connected to federal property or land and related to services provided to federal employees, their dependents, or the public
• Concession contracts, including concessions excluded from the SCA by the Department’s regulations at 29 CFR 4.133(b)

Certain categories of contracts and workers are excluded from EO 14026:

• Employees exempt from the Fair Labor Standards Act’s minimum wage and overtime requirements
• Contracts for services performed exclusively outside the United States or its territories
• Contracts and agreements with Indian Tribes under the Indian Self-Determination and Education Assistance Act
• Certain procurement contracts for construction that are not subject to the Davis-Bacon Act
• Grants

Read more about exclusions and exemptions on the Department of Labor’s FAQs.