Trump Executive Order Cancels a $17.75 Minimum Wage for Federal Contractors

During the Biden Administration, in 2021, President Biden issued an executive order establishing a $15 minimum wage for federal contractors, stating that the raise would generate “higher–quality work by boosting workers’ health, morale and effort.”  He did this after efforts to raise the nationwide minimum wage as part of one of the COVID–19 relief bills failed.  Biden’s executive order also included annual adjustments for inflation, so that the current minimum wage for contractors under Executive Order 14026 is now $17.75.   President Biden acted pursuant to the Procurement Act, allowing the President to implement policies that promote “economy and efficiency” in federal procurement.  Several states brought litigation attacking the federal minimum wage for federal contractors, contending that the Procurement Act gave the President no broad policy making power to set a minimum wage for federal contractors.  In addition, the measures seemed inconsistent with other prevailing wage federal contracting laws.  Eventually the issue reached the federal appellate courts, with the Fifth Circuit and the Tenth Circuit upholding the $15 contractor wage, and with the Ninth Circuit going the other way. v

On March 14, President Trump nixed this executive order and also another order directing federal agencies to incentivize the use of registered apprentices by their contractors, which tended to drive federal infrastructure investments towards companies with union contracts.  Trump's recent actions rescinded Executive Orders in 14026, 14119 and 14126, favoring companies that participate in registered apprenticeships.  It also rejected requiring federal agencies to prioritize grant applicants that have project labor agreements or promote “voluntary union recognition, and neutrality with respect to union organizing.”

This article is part of our April 2025 Newsletter. 

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