Federal Contractors Should Prepare for 2025 Minimum Wage Hike as Legal Challenges Unfold
Federal contractors may need to be prepared to increase pay for employees working on, or in connection with, covered federal government contracts. The hourly minimum wage for employees performing work on federal contracts will rise from $17.20 to $17.75 on Jan. 1, 2025, the Department of Labor (DOL) has announced . The new minimum wage rate will apply in full to tipped and non-tipped employees alike, as well as to workers with disabilities. Contracts entered into, renewed, or extended prior to Jan. 30, 2022, generally remain subject to the minimum wage rate under Executive Order 13658. The operative minimum wage for those contracts will increase from $12.90 to $13.30 per hour. There are a number of pending lawsuits challenging the Biden Administration’s authority to impose the minimum wage increase for federal contractors. It is unlikely these cases will be resolved prior to Jan. 1. Employers should not count on a reprieve before the mandated wage hike takes effect. 500,000 Emplo...