Never Do Today That Which You Can Put Off Until Tomorrow: Delay in Announcing Contractor Minimum Wage Rates for January 1, 2026, Under Executive Order 13658.

“A party is not liable for a failure to perform if it arises from causes beyond their control and without their fault or negligence.”

--General principle of the excusable delay doctrine

Last March 2025, I wrote a blog about the repeal of the federal Biden-era Contractor Minimum Wage by virtue of an Executive Order issued by President Trump. See https://www.awrcounsel.com/blog/2025/3/18/going-going-gone-repeal-of-the-1775-an-hour-contractor-minimum-wage. As I predicted then, the demise of the Biden-era Contractor Minimum Wage left us with the Obama-era Executive Order 13658 still in place. This meant that most federal service and construction contractors no longer had to pay the $17.75 minimum wage. Instead, they could revert to the older but still in place requirement to pay not less than $13.30 an hour.

Of course, the impact of this downward adjustment in wages is minimized by the simple fact that the prevailing wages specified in the Service Contract Act (“SCA”) and the Davis-Bacon Act (“DBA”) usually exceed the Contractor Minimum Wage. However, for some lesser skilled positions such as SCA-covered clerical or food service workers or DBA-covered rural laborers, the Contractor Minimum Wage does put a floor under which the wages cannot fall below.

In addition, another mitigating factor is that, given that the states are the laboratories of democracy, and particularly in the so-called “blue” states, there are state minimum wages in place which are higher than the Contractor Minimum Wage. A case in point is Washington State where the minimum wage will go to $17.13 commencing January 1, 2026. And local minimum wages can be even higher. In Seattle, where I have a second home, they are $21.30 effective January 1, 2026. And Tukwila, WA, next to SeaTac Airport, likely will still have the nation’s highest local minimum wage at $21.65. Generally, there is no federal preemption, so the Federal Government contractor personnel get the benefit of whatever is higher – i.e., the prevailing wage, the EO 13658 wage, or the state or local minimum wages. The one exception is federal enclaves where only federal law applies.

Last year on September 30, 2024, DOL announced the new contractor minimum wage levels for the coming year for both of the EOs then in extant. See https://www.awrcounsel.com/blog/2024/10/9/dol-announces-federal-contractor-minimum-wage-rates-for-2025,  This year obviously that process has been delayed. No doubt the blame rests with the Federal Government shutdown and the furlough of workers. Just last week, I finally got a reply from DOL related to an inquiry I had submitted earlier during the furlough period. The fact of the matter is that DOL is backed up, due to the furlough, with many urgent deadlines approaching. And data collection and inflation indexing are some of the most obvious casualties of the budget battles.

The implementation date for the new Contractor Minimum Wage rates is ordinarily set for January 1, 2026. That is fast approaching. Yet no formal rulemaking or notice has been issued. It should be about a 3% increase due to inflation, so I would expect a new Contractor Minimum Wage for 2026 to be in the neighborhood of $13.70 an hour or thereabout. Hopefully, DOL will be able to attend to its duties prior to January 1, 2026.