On March 14, 2025, President Trump rescinded a Biden-era executive order that had required certain federal construction and service contractors to pay an elevated minimum wage that increased annually, most recently set at $17.75 per hour in 2025. President Trump’s Executive Order 14236, Additional Rescissions of Harmful Executive Orders and Actions, rescinded a long list of prior orders, including President Biden’s Executive Order 14026, Increasing the Minimum Wage for Federal Contractors, which had applied to covered federal contracts signed, renewed, or extended on or after January 30, 2022.
Biden’s Order Stuck in Legal Tug-of-War Before Being Mooted by Trump Rescission
The Biden order was already in legal limbo, though. As we previously reported, the U.S. Ninth Circuit Court of Appeals ruled in November 2024 that it exceeded the authority of the President (State of Nebraska v. Su, 9th Cir, Nov. 2024). The Fifth Circuit later disagreed, upholding the Biden order (State of Texas v. President Donald J. Trump, 5th Cir, Feb. 2025), but then on March 28, 2025, it dismissed the case because President Trump’s rescission of the order made it moot (State of Texas v. President Donald J. Trump, 5th Cir, March 2025).
Obama-Era Contractor Wage Order Still Technically Alive, But Its Reach Has Faded
An older executive order issued by President Obama (Executive Order 13658, Establishing a Minimum Wage for Contractors, technically remains in effect but the passage of time has greatly whittled down the number of covered federal contractors. It established a different minimum wage scale for federal contracts signed, renewed, or extended on or after January 1, 2015, through January 29, 2022. The federal contractor minimum wage under both the Obama and Biden orders applied only to (1) procurement contracts for construction covered by the Davis-Bacon Act; (2) contracts for services covered by the Service Contract Act; (3) contracts for concessions (such as at a national park); and (4) contracts to provide services to federal employees, their dependents, or the general public on federal property or lands.
Tips: Regardless of what happens with the Ninth Circuit case, it won’t have any practical impact on employers. President Trump’s rescission of the Biden order means that covered federal contractors are no longer subject to it. Before reducing any affected employees’ wage rates, though, you should consider the employee relations impact and consult with your general business counsel to determine whether you are contractually permitted to do so.