Trump Administration Reverses $17.75 Federal Contractor Minimum Wage, Affecting Hundreds of Thousands

A sweeping change in labor policy under the Trump administration has undone a key Biden-era rule protecting low-wage federal contract workers. Through Executive Order 14236, the administration officially repealed Executive Order 14026, which had raised the federal contractor minimum wage to $15 in 2021 and tied it to inflation—bringing it to $17.75 in 2025.

With that rollback, the baseline minimum for federal contract labor now reverts to $13.30, the rate set by a still-standing Obama-era executive order. The change, according to the Center for American Progress, places hundreds of thousands of workers at risk of wage cuts as high as 25%.

"This change does more than slash wages — it chips away at a longstanding principle: Public dollars should set the standard for fair treatment and compensation."

Executive Order 14026 was initially introduced to ensure federal contract workers — such as janitors, food service employees, landscapers, and maintenance staff — could earn a livable wage. According to data, over 327,000 workers saw their annual income rise by an average of $5,228 as a result.

Now, with EO 14026 repealed, protections are weakened for many of these workers, particularly those without college degrees or in economically vulnerable communities.

Why Existing Labor Laws Fall Short

Some advocates argue older federal labor laws like the McNamara-O’Hara Service Contract Act (SCA) and the Davis-Bacon Act (DBA) offer continued protections. However, these laws have notable limitations. The SCA bases pay on "prevailing wages," which vary dramatically by location and job classification and are often outdated. The DBA, focused on construction jobs, tends to benefit unionized labor but excludes many subcontracted or entry-level roles.

In many areas, the prevailing wage set under these laws falls far below the repealed $17.75 benchmark. For instance:

• A landscaper in Grand Rapids, MI may now earn just $10.47/hour
• A food service worker in Mississippi could earn $12.06/hour
• A nursing assistant in Pennsylvania might earn $13.17/hour

The elimination of a strong, inflation-indexed federal contractor wage leaves many of these essential workers exposed to regional disparities and market volatility.

Who Is Affected Most

This rollback directly affects individuals employed through federal contracts, including:

• Concessions workers at national parks
• Custodians at military bases
• Kitchen staff in federal facilities
• Uniform manufacturers in U.S. territories like Puerto Rico

These are the types of jobs where every dollar matters. Without the federal contractor minimum wage, many of these workers are left without a consistent wage floor — despite providing services essential to the daily operation of the government.

A Broader Trend of Cuts

This isn’t the first rollback under the Trump administration targeting low-wage protections. During his first term, Trump rescinded wage protections for recreational workers on federal lands — a move that similarly reduced pay for outdoor guides and seasonal staff.

"Stripping away over $5,000 a year from someone’s income only destabilizes them," reads an editorial in HR Digest.

Supporters of the repeal argue that the rollback offers companies flexibility and will allow more job creation. However, critics argue it simply shifts the financial burden from federal budgets to working-class families.

More Than Just a Policy Shift

The move sends a powerful symbolic message about the value placed on federal contract labor. In the absence of a mandated, inflation-tied federal minimum wage for contract workers, government contractors are not required to uphold a consistent standard — and many are expected to cut wages as they compete for lower bids.

"Undoing the federal contractor minimum wage isn’t just an economic policy decision, it’s a values statement," one advocacy group argued. "It asks whether the people who support our government daily — those who clean, build, cook, and maintain — deserve basic protections and dignity on the job."

The message to many workers is stark: job security and fair wages are no longer guaranteed, even when working for the federal government.

Originally reported by Afrotech.