The Trump administration has repealed a Biden-era policy that guaranteed a baseline wage for workers on federal contracts, cutting the federal contractor minimum wage down from $17.75 an hour. However, the move still leaves an Obama-era rule in place that puts the minimum at $13.30 an hour. With that single change, hundreds of thousands of private-sector workers employed by federal contractors are at risk of wage reductions up to 25% — a shift that will disproportionately affect workers without college degrees and those already earning near-poverty wages, the Center for American Progress reports.

The Federal Contractor Minimum Wage: A Lifeline Now Lost

The now-defunct regulation, established under Executive Order 14026, raised the federal contractor minimum wage in 2021 to $15 and indexed it to inflation, bringing it to $17.75 in 2025. It was designed to ensure that janitors, cooks, maintenance workers, and other federal contract laborers earned a livable wage. More than 327,000 workers saw an average pay bump of $5,228 annually.

Under Executive Order 14236, “Additional Rescissions of Harmful Executive Orders and Actions,” the policy is gone, and workers are left exposed to significant wage volatility.

Outdated Laws Can’t Fill The Gap

Although some may point to older wage laws like the McNamara-O’Hara Service Contract Act (SCA) and the Davis-Bacon Act (DBA) as safety nets, those statutes fall short in today’s economy. SCA requires federal service contractors to pay prevailing wages and benefits, but those rates vary by region and job type — and are often outdated. Similarly, DBA mandates minimum wages for construction workers on federal projects, yet it frequently excludes non-union or lower-tier subcontracted roles.

Neither law offers the consistency or comprehensive coverage of the now-repealed federal contractor minimum wage, leaving significant gaps for many modern contract workers​. The market rates established by the SCA and DBA often fall well below the now-repealed $17.75 benchmark and fail to keep pace with inflation. In Grand Rapids, MI, for example, a landscape laborer on a federal contract may now earn just $10.47 per hour. A food service worker in Mississippi could earn $12.06, while a nursing assistant in Pennsylvania might bring in only $13.17​.

Without a strong, centralized federal contractor minimum wage, many workers — such as concessions employees at U.S. national parks and uniform makers in Puerto Rico — are left with even lower pay protections or none at all.

Why The Repeal Of The Federal Contractor Minimum Wage Matters

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. For decades, the federal government has led by example, requiring that contractors provide workers with fair pay and benefits. The elimination of this federal contractor minimum wage undermines that legacy.

Workers already struggling with inflation and rising costs may now face renegotiated contracts, lower base pay, and weaker bargaining power. The rollback narrows the wage gap between federal and non-federal jobs, discouraging talent from pursuing government-aligned roles.

The Bigger Picture: A Familiar Pattern Of Cuts

According to HR Digest, this isn’t the first time the Trump administration has targeted wage protections. He rolled back wages for recreational service workers on federal lands during his first term. With the repeal of the $17.75 federal contractor minimum wage, he’s again targeting some of the most economically vulnerable workforce segments.

Supporters of the rollback claim it will allow companies to create more jobs and expand access. But the data — and the lived experience of workers — paint a different picture. Stripping away over $5,000 a year from someone’s income only destabilizes them.

Undoing the federal contractor minimum wage isn’t just an economic policy decision, it’s a values statement. 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.

Without those protections, the message is clear: Stability is negotiable, and worker well-being is optional.