Former President Donald Trump has revoked an executive order issued by his predecessor, Joe Biden, that required federal contractors to pay workers at least $17.75 per hour.
Late Friday, Trump rescinded nearly 20 executive orders and memos from Biden’s administration, including the 2021 mandate that significantly increased wages for employees working under federal contracts.
Biden had initially raised the minimum wage for federal contract workers to $15 per hour, with automatic increases that brought it to $17.75 in January 2024. Federal contractors, which include some of the nation’s largest companies, employ about 20% of the U.S. workforce.
Under the new changes, contractors with agreements made before Biden’s order took effect on January 30, 2022, must now follow an older Obama-era executive order requiring a minimum wage of $13.30 per hour. For newer contracts, employers will only need to pay either the federal minimum wage of $7.25 per hour or applicable state minimum wages, which can be as high as $17.50 per hour.
President Barack Obama had originally raised the minimum wage for federal contractors to $10.10 in 2014, with periodic increases. Biden’s order replaced that mandate but did not revoke it.
Trump also eliminated Biden-era policies that had given companies an advantage in securing federal contracts if they committed to staying neutral in union organizing efforts and participated in government-approved apprenticeship programs.
Trump did not provide a reason for rescinding these orders. However, critics of Biden’s wage mandate, including business groups and Republican lawmakers, argued that it made it harder for small businesses to compete for federal contracts and that the wage was too high for areas with a lower cost of living.
Two federal appeals courts had upheld Biden’s wage order against challenges from businesses and Republican-led states, ruling that a 1949 law grants the president broad authority over federal contracting to promote economic efficiency. The Supreme Court declined to review one of these rulings in January.
During his first term, Trump did not repeal Obama’s minimum wage order but did exempt seasonal recreational businesses on federal land from its requirements. When Biden raised the minimum wage, he removed that exemption— a decision upheld by an appeals court last year.