Published date: 06/11/2026
Keeping up with labor compliance requirements often means tracking annual regulatory updates, and one of those updates is now officially in effect for certain federal contractors.
As of May 11, 2026, the U.S. Department of Labor’s latest adjustment to the Executive Order (EO) 13658 took effect. This update increases the minimum wage rates that apply to certain covered federal contracts.
While the increase itself is modest, contractors working on affected projects should take time to:
- Confirm required notices have been updated
- Review employee pay rates
- Verify contract coverage
What Changed?
The updated EO 13658 minimum wage rates are now:
- $13.65 per hour for covered non-tipped workers
- $9.55 per hour for covered tipped workers
These rates increased from the 2025 levels of $13.30 and $9.30 per hour, as part of the Department of Labor’s annual inflation-based adjustment.
Who Does This Apply To?
Not every federal contract falls under EO 13658, making it important to confirm coverage.
In general, these requirements apply to certain federal construction and service contracts, including those subject to the Davis-Bacon Act (DBA) and Service Contract Act (SCA), although many of these contracts already require higher prevailing wage rates.
EO 13658 generally applies to contracts:
- Entered into between January 1, 2015 and January 29, 2022, and
- Not renewed or extended on or after January 30, 2022
Notable Exceptions
Some contracts are excluded, for example:
- Certain seasonal recreational services on federal lands
- Some workers who provide support in connection with federal contracts for less than 20% of their hours worked in a week
If you’re unsure whether a contract is covered, now is a good time to review contract
What Should Contractors Be Doing?
For organizations with covered contracts, the next steps are straightforward:
Review Employee Pay Rates
Check to make sure covered workers are earning at least the updated minimum wage for work performed on or after May 11, 2026. Keep in mind that some state or local laws may require a higher rate—employers must follow whichever law provides the highest pay.
Update Required Notices
The Department of Labor has updated its EO 13658 worker notice. Confirm the current version is both:
- Posted where workers can see it
- Easily accessible to covered employees
Plan for Future Adjustments
These rates are updated annually based on inflation. Building regular wage reviews into your compliance process can make future changes easier to manage.
Why Does This Update Matter?
A $0.35 hourly increase may seem small, but labor compliance is often shaped by incremental changes that add up over time.
Missing a wage adjustment, overlooking contract coverage, or failing to update required postings can create avoidable compliance risks.
For organizations managing Davis-Bacon, prevailing wage, certified payroll, and other federal requirements, staying current is key to maintaining compliance across projects.
Cloud-based prevailing wage and workforce compliance management solutions can help bring certified payroll reporting, wage compliance tracking, and project documentation into a more streamlined, centralized workflow.
Looking Ahead
While recent conversations around federal contractor wages have focused on broader policy changes, EO 13658 remains in effect for certain contracts and continues to be an important requirement.
Organizations should use this update as an opportunity to:
- Confirm whether the new rates apply
- Make any necessary payroll adjustments
- Monitor future Department of Labor updates
As with many areas of labor compliance, staying informed and proactive is the best way to avoid issues down the road!
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These materials are being issued with the understanding that LCPtracker is not engaged in rendering legal or other professional services and is providing these for informational purposes only. If legal, accounting, or tax expert assistance is required, the services of a competent legal, accounting or tax professional should be sought.
