The Department of Labor's Wage and Hour Division says the minimum wage required on a shrinking set of older federal contracts — those still covered by Executive Order 13658 — rises to $14.05 an hour, and the required cash wage for tipped workers on them to $9.85 an hour, both starting January 6, 2027. The current rates are $13.65 and $9.55.
Who this applies to
The rate comes from Executive Order 13658, which set a minimum wage of $10.10 an hour on covered federal contracts starting January 1, 2015, with annual adjustments after that. A later order, Executive Order 14026, set a higher $15.00 rate, also adjusted annually, for contracts entered — or renewed or extended, by an exercised option or otherwise — on or after January 30, 2022, and superseded Executive Order 13658 to the extent the two were inconsistent. Executive Order 14026 was itself revoked on March 14, 2025, by section 2(d) of Executive Order 14236. The Department's notice says Executive Order 13658 now generally applies to contracts subject to the Davis-Bacon Act and the Service Contract Act that were awarded between January 1, 2015, and January 29, 2022, and not renewed or extended, by an exercised option or otherwise, on or after January 30, 2022. The Department says the number of those contracts "continues to dwindle," and that it anticipates some remain.
What to do
Whether this rate reaches a particular job depends on the contract behind it: when it was awarded, whether it is a Davis-Bacon Act or Service Contract Act contract, and whether it was renewed or extended on or after January 30, 2022. The notice sets no rate for contracts outside that window, says nothing about what applies to contracts once covered by Executive Order 14026, and does not say how many contracts remain under Executive Order 13658.
How the rate was set
Executive Order 13658 requires the rate to rise each year by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers — United States city average, all items, not seasonally adjusted — rounded to the nearest 5 cents. The Department averaged the available monthly data for July 2025 through June 2026 (320.866) and compared it with the prior year's average (311.293), a 3.075 percent increase, then applied that to the current $13.65 rate, producing $14.070, rounded to $14.05. The tipped cash wage stays at 70 percent of the full rate: 70 percent of $14.05 is $9.83, rounded to $9.85. One cell of the notice's own chart is blank, with a footnote saying the Bureau of Labor Statistics did not collect index data from October 1, 2025, through November 12, 2025, during the lapse in federal appropriations.
What the Department will do next
The order and its regulations require notice of a new rate at least 90 days before it takes effect. The regulations say the rate goes on the successor to Wage Determinations OnLine — now sam.gov's wage determinations site — and on all wage determinations issued under the Davis-Bacon Act and the Service Contract Act. The notice says a poster showing the new rate will be publicly available on the Wage and Hour Division's website.