DOL sets $14.05 minimum wage for older federal contracts from 2027

DOL sets $14.05 minimum wage for older federal contracts from 2027

7 October 2026: The US Department of Labor's Wage and Hour Division will raise the minimum wage under Executive Order 13658 to $14.05 an hour, up from $13.65, and the cash wage for tipped employees to $9.85 from $9.55. The Federal Register published the notice on 8 October, and the new rates apply 90 days later, from 6 January 2027.

The order is the older of two federal contractor wage regimes. It covers workers on contracts that fall under the Davis-Bacon Act or the Service Contract Act, were entered into between 1 January 2015 and 29 January 2022, and have not been renewed or extended since 30 January 2022. Executive Order 14026, which set a higher $15 floor for newer contracts, was revoked in March 2025. The Department says the number of contracts still under the 2014 order keeps shrinking, but it expects some to remain.

The increase follows the order's formula. The Department averaged the Consumer Price Index for Urban Wage Earners and Clerical Workers for July 2025 to June 2026 and compared it with the prior twelve months, which gave a rise of 3.075 percent. Applied to $13.65 that produces $14.07, rounded to the nearest five cents. The tipped cash wage stays at 70 percent of the main rate, again rounded.

The previous rates took effect on 11 May 2026 after a notice published on 9 February. The Department also says it will post the rate on SAM.gov, the successor to the old Wage Determinations OnLine site, and on wage determinations issued under the two acts.

For payroll teams at contractors with legacy federal work, the practical task is to find which contracts still sit under the 2014 order and load the new rates before the January start. The order was signed on 12 February 2014, set $10.10 an hour from 2015 and has adjusted every year since.

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Sources

• U.S. Department of Labor, Wage and Hour Division: Minimum Wage for Federal Contracts, Notice of Rate Change in Effect for 2027 (Federal Register public inspection, document 2026-20646), 7 October 2026
• HR Dive: DOL to up minimum wage to $14 per hour for federal contractors, 7 October 2026
• Federal Register: Minimum Wage for Federal Contracts Covered by Executive Order 13658, Notice of Rate Change in Effect as of January 6, 2027 (document 2026-20646), 8 October 2026