Trump Revokes Minimum Wage Hike For Federal Contractors

President Donald Trump has revoked an executive order from his predecessor that increased the minimum wage for federal contractors, a move that could end up stripping low-wage workers of a pay raise. 

In an order issued Friday, Trump said he was rescinding more than a dozen policies implemented by former President Joe Biden. Several of the Biden-era reforms were aimed at improving workplace conditions, including one that set a wage floor of $17.75 per hour this year for labor performed for the federal government.

Trump said in his order that killing the minimum wage raise and other measures would “restore common sense” and “unleash the potential of American citizens.”

The Service Employees International Union, which represents members who work for government contractors, said in a statement that Trump’s policy would “open the door to roll back wages.”

“This is yet another anti-worker move from an administration that promised to deliver jobs with higher wages, lower the cost of eggs and improve our economy for working families,” said SEIU’s president, April Verrett. “This executive order does none of that. Instead, it makes life harder for hundreds of thousands of hard-working Americans who keep our government running behind the scenes in good and bad times.”

There is a long history of the federal government using its contracting power to set basic standards in the workplace, by setting higher wage floors and barring discrimination among companies that take federal dollars. The Trump administration has been working hard to undo that tradition, in part by gutting the Labor Department’s contract compliance office.

Trump’s revocation of Biden’s minimum wage order would presumably not lead to immediate pay cuts, but instead apply to new or renewed contracts with the government moving forward. The Labor Department did not immediately comment Tuesday when asked for clarity on that point.

Contract workers would still be covered by federal or state minimum wage statutes, as well as the government’s prevailing wage rates, which set certain minimums according to job classification. But for many workers, those rates would be below the ones the Biden administration had set, meaning they’ll end up with lower pay thanks to Trump.

When the Biden administration announced the new minimum rate in 2021, it estimated that more than 300,000 workers would get a raise because of it. 

Many of those workers are employed in low-wage service jobs, cleaning government buildings and working in cafeterias or restaurants on federal properties. The raises came about in large part because of activism by groups like SEIU, which argued that the federal government shouldn’t underwrite poverty jobs through the procurement process.

The 2021 Biden rule initially set the new minimum wage at $15. That amount had been the rallying cry of the SEIU-backed Fight for $15 movement, which spearheaded worker strikes in the fast-food industry for years. But the reform also tied the wage floor to an inflation index so that it rose with the cost of living, leading to the $17.75 rate for 2025.

“The bottom line is we really want to make sure we are leveraging the purchasing power of the federal government to ensure fair wages for workers across the country,” a Biden official said at the time.

The federal minimum wage remains just $7.25 per hour and prevails in any state that doesn’t mandate a higher one. Democrats have tried for years to raise the federal rate, including during Trump’s first presidency, but have been stymied by Republican opposition.

Trump himself has flip-flopped repeatedly on the issue of raising the minimum wage, at times suggesting he backed the idea, only to reverse himself. He once said he wanted to raise and not raise it at the same time.

“Well, I would leave it and raise it somewhat,” he told Bill O’Reilly in 2016. “You need to help people. I know it’s not very Republican to say but you need to help people.”