Increasing the Minimum Wage for Federal Contractors

The order directs all federal agencies to include a $15.00-per-hour minimum wage clause in covered procurement contracts, service contracts, and concession agreements starting January 30, 2022. Beginning January 1, 2023, the wage adjusts annually using the Consumer Price Index for Urban Wage Earners and Clerical Workers, with the Secretary of Labor publishing each new rate at least 90 days in advance. Tipped workers receive a phased-in cash wage floor: $10.50 per hour in 2022, 85 percent of the full rate in 2023, and the full rate by 2024. The order supersedes the inconsistent portions of Executive Order 13658 (2014) and revokes Executive Order 13838 (2018), which had exempted recreational services on federal lands from the prior wage floor.

The order covers new contracts, renewals, extensions, and option exercises on services, construction, concessions, and contracts tied to federal property — but excludes grants, tribal self-determination contracts, and contracts that fall below applicable statutory thresholds. It does not preempt higher state, local, or prevailing-wage requirements. Enforcement authority rests with the Secretary of Labor; disputes are resolved through departmental regulations, not the Contract Disputes Act.

Workers employed on covered federal contracts and subcontracts — including tipped and workers with special wage certificates under FLSA Section 14(c) — and the contractors and subcontractors who pay them. Federal agencies with procurement authority and the Federal Acquisition Regulatory Council must update contract templates and solicitations.

Hundreds of thousands of low-wage workers on federal service, construction, and concession contracts will see their hourly pay rise to at least $15, with automatic annual increases afterward. Businesses holding or bidding on federal contracts must budget for higher labor costs and update payroll practices or risk losing contract payments.

The Secretary of Labor must issue implementing regulations by November 24, 2021, defining covered contracts and exclusions. Within 60 days of those regulations, the Federal Acquisition Regulatory Council must amend the Federal Acquisition Regulation to insert the required wage clause into solicitations and contracts. Agencies must separately act within the same 60-day window for concession and federal-property contracts. The full $15 rate applies to all covered contracts entered on or after January 30, 2022. Annual CPI adjustments begin January 1, 2023; the Secretary must publish each adjusted rate at least 90 days before it takes effect. Enforcement authority belongs exclusively to the Secretary of Labor through departmental regulations.