Minimum Wage for Federal Contracts Covered by Executive Order 13658, Notice of Rate Change in Effect for 2027

Issuing agencies

Abstract

The Wage and Hour Division (WHD or Division) of the U.S. Department of Labor (the Department) is announcing the applicable minimum wage rate for workers performing work on or in connection with federal contracts covered by Executive Order 13658, Establishing a Minimum Wage for Contractors (the Executive Order or the order), beginning January 6, 2027. The rates announced in this notice apply to certain types of federal contracts entered into between January 1, 2015, and January 29, 2022, that were not renewed or extended (pursuant to an exercised option or otherwise) on or after January 30, 2022. Beginning on January 6, 2027, the Executive Order 13658 minimum wage rate that generally must be paid to workers performing work on or in connection with contracts covered by Executive Order 13658 will increase to $14.05 per hour, while the required minimum cash wage that generally must be paid to tipped employees performing work on or in connection with covered contracts will increase to $9.85 per hour.

Full Text

<html>
<head>
<title>Federal Register, Volume 91 Issue 194 (Thursday, October 8, 2026)</title>
</head>
<body><pre>
[Federal Register Volume 91, Number 194 (Thursday, October 8, 2026)]
[Notices]
[Pages 64403-64405]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20646]


-----------------------------------------------------------------------

DEPARTMENT OF LABOR

Wage and Hour Division


Minimum Wage for Federal Contracts Covered by Executive Order 
13658, Notice of Rate Change in Effect for 2027

AGENCY: Wage and Hour Division, Department of Labor.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Wage and Hour Division (WHD or Division) of the U.S. 
Department of Labor (the Department) is announcing the applicable 
minimum wage rate for workers performing work on or in connection with 
federal contracts covered by Executive Order 13658, Establishing a 
Minimum Wage for Contractors (the Executive Order or the order), 
beginning January 6, 2027. The rates announced in this notice apply to 
certain types of federal contracts entered into between January 1, 
2015, and January 29, 2022, that were not renewed or extended (pursuant 
to an exercised option or otherwise) on or after January 30, 2022. 
Beginning on January 6, 2027, the Executive Order 13658 minimum wage 
rate that generally must be paid to workers performing work on or in 
connection with contracts covered by Executive Order 13658 will 
increase to $14.05 per hour, while the required minimum cash wage that 
generally must be paid to tipped employees performing work on or in 
connection with covered contracts will increase to $9.85 per hour.

DATES: These new Executive Order 13658 rates shall take effect on 
January 6, 2027.

FOR FURTHER INFORMATION CONTACT: Daniel Navarrete, Director, Division 
of Regulations, Legislation, and Interpretation, Wage and Hour 
Division, U.S. Department of Labor, Room S-3502, 200 Constitution 
Avenue NW Washington, DC 20210; telephone: (202) 693-0406 (this is not 
a toll-free number). Alternative formats are available upon request by 
calling 1-866-487-9243. If you are deaf, hard of hearing, or have a 
speech disability, please dial 7-1-1 to access telecommunications relay 
services.

SUPPLEMENTARY INFORMATION: 

I. Executive Order 13658 Background

    On February 12, 2014, President Obama signed Executive Order 13658, 
establishing an hourly minimum wage for workers performing work on or 
in connection with covered federal contracts of $10.10 per hour, 
beginning January 1, 2015, with annual adjustments thereafter in an 
amount determined by the Secretary pursuant to the order. See 79 FR 
9851. The Executive Order directed the Secretary to issue regulations 
to implement the order's requirements, and the Secretary delegated 
authority to promulgate these regulations to the Administrator of the 
WHD. See 79 FR 9852; see also Secretary's Order 05-2010 (Sept. 2, 
2010), 75 FR 55352 (published Sept. 10, 2010).\1\ Accordingly, after 
engaging in notice-and-comment rulemaking, the Department published a 
final rule on

[[Page 64404]]

October 7, 2014, to implement the Executive Order. See 79 FR 60634. The 
final regulations, set forth at 29 CFR part 10, established standards 
and procedures for implementing and enforcing the minimum wage 
protections of the order.
---------------------------------------------------------------------------

    \1\ Secretary's Order 05-2010 has been superseded by Secretary's 
Order 01-2014 (Dec. 19, 2014), 79 FR 77527 (published Dec. 24, 
2014). Secretary's Order 01-2014 delegates authority and assigns 
responsibility, including enforcement authority, to the WHD 
Administrator on matters pertaining to Executive Order 13658.
---------------------------------------------------------------------------

    On May 25, 2018, President Trump signed Executive Order 13838, 
``Exemption from Executive Order 13658 for Recreational Services on 
Federal Lands.'' 83 FR 25341. Executive Order 13838 amended Executive 
Order 13658 so as not to ``apply to contracts or contract-like 
instruments entered into with the Federal Government in connection with 
seasonal recreational services or seasonal recreational equipment 
rental for the general public on Federal lands,'' including ``river 
running, hunting, fishing, horseback riding, camping, mountaineering 
activities, recreational ski services, and youth camps,'' with the 
proviso that the exemption did ``not apply to lodging and food services 
associated with seasonal recreational services.'' Id. The Executive 
Order directed the Secretary to issue regulations to implement the 
exception. Id. Accordingly, the Department implemented Executive Order 
13838 through a final rule. 83 FR 48537.
    On April 27, 2021, President Biden signed Executive Order 14026, 
``Increasing the Minimum Wage for Federal Contractors.'' 86 FR 22835. 
Executive Order 14026 established a higher hourly minimum wage of 
$15.00 per hour, beginning on January 30, 2022, for the same types of 
contracts with the Federal Government that are covered by Executive 
Order 13658, and provided for annual inflation-based adjustments 
thereafter. Executive Order 14026 superseded Executive Order 13658 ``to 
the extent it is inconsistent with [E.O. 14026]'' and applied to 
contracts with the Federal Government entered on or after January 30, 
2022, or that were renewed or extended (pursuant to an exercised option 
or otherwise) on or after January 30, 2022. 86 FR 22837. Executive 
Order 14026 also revoked Executive Order 13838 as of January 30, 2022. 
On March 14, 2025, President Trump revoked Executive Order 14026 in 
section 2(d) of Executive Order 14236, ``Additional Rescissions of 
Harmful Executive Orders and Actions.'' 90 FR 13037.
    As a result, at this time Executive Order 13658 remains in effect 
and generally applies to contracts subject to the Davis-Bacon Act 
(DBA), 40 U.S.C. 3141 et seq., and the Service Contract Act (SCA), 41 
U.S.C. 6701 et seq., awarded between January 1, 2015, and January 29, 
2022, and not renewed or extended on or after January 30, 2022. This 
notice updates the wage rate applicable to said contracts pursuant to 
that order. Although the number of contracts subject to Executive Order 
13658 has significantly decreased over the past several years and 
continues to dwindle, the Department anticipates that there will be 
some existing contracts with the Federal Government that would not have 
qualified as a covered ``new contract'' for purposes of Executive Order 
14026 and that remain subject to the minimum wage requirements of 
Executive Order 13658. Executive Order 13658 and its implementing 
regulations require the Secretary to determine the applicable minimum 
wage rate for workers performing work on or in connection with covered 
contracts on an annual basis, beginning January 1, 2016. See 79 FR 
9851; 29 CFR 10.1(a)(2), 10.5(a)(2), 10.12(a). Accordingly, the 
Department is announcing the 2027 annual update to Executive Order 
13658's minimum wage rates.

II. Requirements for Determining Annual Increases to the Minimum Wage 
Rate

    Sections 2(a) and (b) of Executive Order 13658 establish the 
methodology that the Secretary must use to determine the annual 
inflation-based increases to the minimum wage rate. See 79 FR 9851. 
These provisions, which are implemented in 29 CFR 10.5(b)(2), explain 
that the applicable minimum wage determined by the Secretary for each 
calendar year shall be:
    <bullet> Not less than the amount in effect on the date of such 
determination;
    <bullet> Increased from such amount by the annual percentage 
increase in the Consumer Price Index for Urban Wage Earners and 
Clerical Workers (CPI-W) (United States city average, all items, not 
seasonally adjusted), or its successor publication, as determined by 
the Bureau of Labor Statistics (BLS); and
    <bullet> Rounded to the nearest multiple of $0.05.
    Once a determination has been made with respect to the new minimum 
wage rate, Executive Order 13658 and its implementing regulations 
require the Secretary to notify the public of the applicable minimum 
wage rate on an annual basis at least 90 days before any new minimum 
wage takes effect. See 79 FR 9851; 29 CFR 10.5(a)(2), 10.12(c)(1). The 
regulations explain that the Administrator of the Wage and Hour 
Division (the Administrator) will publish an annual notice in the 
Federal Register stating the applicable minimum wage rate at least 90 
days before any new minimum wage takes effect. See 29 CFR 
10.12(c)(2)(i). Additionally, the regulations state that the 
Administrator will provide notice of the Executive Order 13658 minimum 
wage rate on Wage Determinations OnLine (WDOL), <a href="http://www.wdol.gov">http://www.wdol.gov</a>, or 
any successor site; \2\ on all wage determinations issued under the DBA 
and the SCA; and by other means the Administrator deems appropriate. 
See 29 CFR 10.12(c)(2)(ii)-(iv).
---------------------------------------------------------------------------

    \2\ <a href="http://WDOL.gov">WDOL.gov</a>has since moved to <a href="https://sam.gov/content/wage-determinations">https://sam.gov/content/wage-determinations</a>. This website is the authoritative and single website 
for obtaining appropriate Service Contract Act and Davis-Bacon Act 
wage determinations for each official contract action.
---------------------------------------------------------------------------

    Section 3 of Executive Order 13658 requires contractors to pay 
tipped employees covered by the order performing on or in connection 
with covered contracts an hourly cash wage of at least $4.90, beginning 
on January 1, 2015, provided the employees receive sufficient tips to 
equal the Executive Order 13658 minimum wage rate under section 2 of 
the order when combined with the cash wage. See 79 FR 9851-52; 29 CFR 
10.28(a). The order further provides that, in each succeeding year, 
beginning January 1, 2016, the required cash wage must increase by 
$0.95 (or a lesser amount if necessary) until it reaches 70 percent of 
the Executive Order 13658 minimum wage. Id. For subsequent years, the 
cash wage for tipped employees will be 70 percent of the Executive 
Order 13658 minimum wage rounded to the nearest $0.05. Id. When a 
contractor is using a tip credit to meet a portion of its wage 
obligations under the Executive Order, the amount of tips received by 
the employee must equal at least the difference between the cash wage 
paid and the Executive Order 13658 minimum wage. If the employee does 
not receive sufficient tips, the contractor must increase the cash wage 
paid so that the cash wage in combination with the tips received equals 
the Executive Order 13658 minimum wage. Id.
    The Executive Order 13658 minimum wage and the cash wage required 
for tipped employees are currently $13.65 and $9.55 per hour, 
respectively. The Department announced these rates on February 9, 2026, 
91 FR 5783, and the rates took effect on May 11, 2026.

III. The 2027 Executive Order 13658 Minimum Wage Rate

    Using the methodology set forth in Executive Order 13658 and 
summarized above, the Department must first determine the annual 
percentage increase in the CPI-W (United States city average, all 
items, not seasonally adjusted), as published by BLS, to

[[Page 64405]]

determine the new Executive Order 13658 minimum wage rate. In 
calculating the annual percentage increase in the CPI-W, the Department 
must compare the CPI-W for the most recent year available with the CPI-
W for the preceding year. The Department therefore compared the 
percentage change in the CPI-W between the most recent year and the 
prior year. The Department then increased the current Executive Order 
13658 minimum wage rate by the resulting annual percentage change and 
rounded to the nearest multiple of $0.05.
    Consistent with past practice, the Department determined the 2027 
Executive Order 13658 minimum wage rate by averaging the available CPI-
W data for the first two quarters of 2026 and the last two quarters of 
2025 (i.e., July 2025 through June 2026).\3\ This produced an average 
index level of 320.866. The Department then compared that data to the 
average CPI-W for the preceding year--311.293--which consists of the 
first two quarters of 2025 and the last two quarters of 2024 (i.e., 
July 2024 through June 2025). Based on this methodology, the Department 
determined that the annual percentage increase in the CPI-W was 3.075 
percent ((320.866 / 311.293) -1). The Department then applied that 
annual percentage increase of 3.075 percent to the current Executive 
Order hourly minimum wage rate of $13.65, which resulted in a wage rate 
of $14.070 (($13.65 x 0.03075) + $13.65). Pursuant to the Executive 
Order, that rate must be rounded to the nearest multiple of $0.05.
---------------------------------------------------------------------------

    \3\ Due to the 2025 lapse in federal appropriations, BLS did not 
collect CPI data from October 1, 2025, through November 12, 2025. 
<a href="https://www.bls.gov/cpi/additional-resources/2025-federal-government-shutdown-impact-cpi.htm">https://www.bls.gov/cpi/additional-resources/2025-federal-government-shutdown-impact-cpi.htm</a>
---------------------------------------------------------------------------

    As a result, the new Executive Order 13658 minimum wage rate that 
must generally be paid to workers performing on or in connection with 
covered contracts beginning January 6, 2027, is $14.05 per hour.

IV. The 2027 Executive Order 13658 Minimum Cash Wage for Tipped 
Employees

    As noted above, section 3 of Executive Order 13658 provides a 
methodology to determine the amount of the minimum hourly cash wage 
that must be paid to tipped employees performing on or in connection 
with covered contracts. Because the cash wage for tipped employees 
reached 70 percent of the Executive Order 13658 minimum wage beginning 
on January 1, 2018 (i.e., $7.25 per hour compared to $10.35 per hour), 
future updates to the cash wage for tipped employees must continue to 
set the rate at 70 percent of the full Executive Order 13658 minimum 
wage. Seventy percent of the new Executive Order 13658 minimum wage 
rate of $14.05 is $9.83 ($14.05 x 0.70). Because the Executive Order 
provides that the rate must be rounded to the nearest $0.05, the new 
minimum hourly cash wage for tipped workers performing on or in 
connection with covered contracts beginning January 6, 2027, is 
therefore $9.85 per hour.

V. Appendix

    Appendix A to this notice provides a chart of the CPI-W data 
published by BLS that the Department used to calculate the new 
Executive Order 13658 minimum wage rate based on the methodology 
explained herein. A poster reflecting the new Executive Order 13658 
minimum wage rate will be publicly available on the WHD website.

    Dated: October 2, 2026.
Andrew B. Rogers,
Administrator, Wage and Hour Division.

Appendix A: Data Used To Determine 2027 Executive Order 13658 Minimum 
Wage Rate Effective January 6, 2027.

    Data Source: Consumer Price Index for Urban Wage Earners and 
Clerical Workers (CPI-W) (United States city average, all items, not 
seasonally adjusted).

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Quarter 3
                                                                          Quarter 4
                                                                          Quarter 1
                                                                          Quarter 2            Annual
                                                                                               average
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2024Q3 to 2025Q2..............................................   308.501   308.640   309.046   309.358   308.998   309.067   311.172   312.460   313.250   314.243   314.839   315.945   311.293
2025Q3 to 2026Q2..............................................   316.349   317.306   318.139       \a\   317.414   317.014   317.942   319.422   323.500   326.541   328.829   327.075   320.866
Annual Percentage Increase....................................  ........  ........  ........  ........  ........  ........  ........  ........  ........  ........  ........  ........    3.075%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note:\a\Due to the 2025 lapse in federal appropriations, BLS did not collect CPI data from October 1, 2025, through November 12, 2025. <a href="https://www.bls.gov/cpi/additional-resources/2025-federal-government-shutdown-impact-cpi.htm">https://www.bls.gov/cpi/additional-resources/2025-federal-government-shutdown-impact-cpi.htm</a>.


[FR Doc. 2026-20646 Filed 10-7-26; 8:45 am]
BILLING CODE 4510-27-P


</pre></body>
</html>