On February 9, 2026, the U.S. Department of Labor’s Wage and Hour Division (WHD) announced new minimum wage rates under Executive Order 13658 for a limited set of legacy federal contracts. Beginning May 11, 2026, covered workers must be paid at least $13.65 per hour, or $9.55 per hour in cash wages where a valid tip credit applies. The Department of Labor will continue enforcing Executive Order (EO) 13658 for these legacy contracts, despite revoking the enforcement of EO 14026.

This update applies to federal contractors and subcontractors performing on or in connection with covered legacy federal contracts and takes effect on May 11, 2026.

What Employers Need to Do

• Identify Covered Agreements: Pull all federal contracts executed January 1, 2015, through January 29, 2022, that have not been renewed or extended on or after January 30, 2022; flag those still active after May 11, 2026.

• Update Wage Floors: Ensure any covered workers earn at least $13.65 per hour, or at least $9.55 in cash wages with a compliant tip credit, starting May 11, 2026.

• Posting: Continue using WHD’s EO 13658 poster, replace it once the 2026 version is posted, and update internal pay communications.

• Coordinate with Procurement: Because EO 14026 is not enforced, but some FAR text still references it, confirm any class deviation or guidance with your contracting officer and document any equitable adjustment discussions.

• Maintain Records: Keep wage and tip credit documentation consistent with 29 CFR part 10.

Overview

• Rates and Effective Date: $13.65 non-tipped, $9.55 tipped cash wage; beginning May 11, 2026.

• Who is Covered: Legacy contracts entered into January 1, 2015, through January 29, 2022, and not renewed or extended on or after January 30, 2022; commonly, Davis Bacon Act and Service Contract Act instruments and certain service contracts tied to federal property or lands.

• Policy Context: EO 14236 (March 14, 2025) revoked EO 14026; DOL ceased enforcing EO 14026 and continues annual EO 13658 updates for legacy contracts.

• Seasonal Recreation: Exempt under EO 13838.

Summary of Changes

• Mid-year Effective Date: Unlike prior January 1 effective dates, the 2026 EO 13658 rates take effect May 11, 2026.

• Methodology: EO 13658 uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI W) year-over-year change and rounds to the nearest $0.05. For 2026, WHD calculated 2.490% based on July 2024 through June 2025 compared with July 2023 through June 2024, producing $13.631, which rounds to $13.65, and a tipped cash wage equal to 70% of that amount ($9.55).

• Legacy Only Scope: Applies to contracts entered into any time between January 1, 2015, through January 29, 2022, that were not renewed or extended on or after January 30, 2022; WHD’s notice expressly ties coverage to these legacy instruments.

• Poster Update: WHD indicates a poster reflecting the 2026 rate will be posted on its website; employers should use the current poster until then.

Why This Matters

• New Floor for Legacy Contracts: Beginning May 11, 2026, covered workers on legacy contracts must be paid at least $13.65 per hour, or $9.55 per hour in cash wages where a valid tip credit applies.

• Scope is Narrow: The update applies only to contracts entered into any time between January 1, 2015, and January 29, 2022, that were not renewed or extended on or after January 30, 2022.

• Poster and Annual Updates Continue: WHD will continue EO 13658 annual updates and maintain an official contractor minimum wage poster that will be refreshed for 2026.

• Seasonal Recreation Exemption Remains: Seasonal recreational services on federal lands are exempt under EO 13838.

Key Risks for Employers

• Mis-scoping Coverage: Applying or ignoring the EO 13658 increase outside its legacy scope may create pricing and contract administration issues, including disputes over equitable adjustments.

• Poster and Records: Missing or outdated posters and incomplete tip credit records increase audit risk under 29 CFR part 10.

• Clause Confusion: FAR still references EO 14026 in places, which can conflict with DOL’s non-enforcement posture; misalignment can cause inconsistent application.

• Higher Local Floors: Many states and localities exceed $13.65; contractors must pay the highest applicable minimum.

Additional information

Readiness Checklist

• Contract Inventory: Confirm which agreements are legacy EO 13658 and remain active beyond May 11, 2026.

• Payroll Updates: Configure wage floors to $13.65 and $9.55 (with compliant tip credits) effective May 11, 2026.

• Poster Refresh: Monitor WHD and replace the EO 13658 poster when the 2026 version is posted.

• CO Coordination: Align with your contracting officer on any class deviations and how to handle legacy vs non-legacy instruments; capture file memos.

• Recordkeeping: Maintain wage and tip credit documentation per 29 CFR part 10 for audit readiness.

Source Reference

• DOL Wage and Hour Division – Press Release – Executive Order 13658, Establishing a Minimum Wage for Contractors: Annual Update (February 9, 2026)
• FAR – 22.1002-5 Executive Orders 13658 and 14026 (03/16/2026)
• Federal Register – Minimum Wage for Federal Contracts Covered by Executive Order 13658, Notice of Rate Change in Effect (February 9, 2026)

Resources

• DOL EO 13658 Resources

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