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EO 14026Executive OrderBiden · D Quiet signal

Executive Order 14026

Increasing the Minimum Wage for Federal Contractors

This executive order raises the minimum wage for workers on federal contracts to $15.00 per hour, effective January 30, 2022, with annual inflation adjustments beginning January 1, 2023. It also establishes a phased increase for tipped workers and revokes a 2018 exemption for recreational services on federal lands.

Federal Register Open PDF 86 FR 22835

Impact dates

  1. Tipped worker cash wage reaches 100% of minimum wage

  2. First annual CPI-based wage adjustment takes effect; tipped wage becomes 85% of base wage

  3. $15.00 minimum wage and $10.50 tipped wage take effect; EO 13838 revoked; EO 13658 superseded

  4. Secretary of Labor issues regulations implementing EO requirements

  5. FAR Council amends Federal Acquisition Regulation (within 60 days of Secretary's regulations)

  6. Agencies take steps to ensure contract compliance (within 60 days of Secretary's regulations)

Key directives

  • Set federal contractor minimum wage at $15.00/hour effective January 30, 2022
  • Annual CPI-based wage adjustments beginning January 1, 2023, published 90 days prior
  • Tipped worker minimum cash wage: $10.50/hour starting January 30, 2022; 85% of base wage starting January 1, 2023; 100% starting January 1, 2024
  • Secretary of Labor to issue implementing regulations by November 24, 2021
  • FAR Council to amend Federal Acquisition Regulation within 60 days of Secretary's regulations
  • Agencies to ensure compliance for contracts entered into on or after January 30, 2022
  • Revoke Executive Order 13838 (recreational services exemption) effective January 30, 2022
  • Supersede Executive Order 13658 to the extent inconsistent, effective January 30, 2022

Who is ordered

Timeline

Immediate

  • EO effective immediately
  • encouragement for agencies to apply wage standards to interim contracts

Near term (90d)

  • Secretary of Labor to issue regulations by November 24, 2021
  • FAR Council to amend Federal Acquisition Regulation within 60 days of regulations
  • agencies to take compliance steps within 60 days of regulations

Long term

  • $15.00 minimum wage takes effect January 30, 2022
  • annual CPI-based adjustments begin January 1, 2023
  • tipped worker cash wage reaches 100% of minimum wage by January 1, 2024

Risks & tensions

  • Regulatory timeline was tight: 211 days from signing to November 24, 2021 deadline for complex rulemaking
  • Annual CPI adjustments create administrative burden and potential wage compression effects
  • Strong encouragement language for interim contracts (sections 9(b)-(c)) lacks enforcement teeth
  • Tipped worker phase-in creates a multi-tier wage system with compliance complexity
  • Contractor pass-through costs to federal procurement budgets uncertain
  • Revocation of recreational services exemption may face industry pushback
Executive Order 14026: Increasing the Minimum Wage for Federal Contractors · Executive Orders