On November 22, 2021, the U.S. Department of Labor ("DOL")’s Wage and Hour Division published its final rule implementing Executive Order 14026, "Increasing the Minimum Wage for Federal Contractors." The final rule adopts the terms of the Executive Order and the proposed rule, and increases the hourly minimum wage for certain federal contractors performing work on or in connection with covered federal contracts to $15 per hour, beginning January 30, 2022. The final rule also phases out the lower minimum wage for tipped workers on federal contracts by 2024. In addition, the final rule ensures a $15 per hour minimum wage for workers with disabilities performing work on or connected to covered contracts and restores minimum wage protections to outfitters and guides operating on federal lands.

The DOL published a Frequently Asked Questions page clarifying the terms of the final rule and addressing frequently asked questions. The minimum wage will be updated annually to keep pace with inflation. Starting January 1, 2023, the Secretary of Labor will determine the new applicable minimum wage amount each year. Each change in the minimum wage will be published at least 90 days before it takes effect and published on the Wage Determination webpage of the System for Award Management ("SAM") and at DOL’s Wage and Hour Division webpage.

The DOL expects the pay boost to apply to 327,000 workers, with employees receiving annual wage increases of $5,228 on average. "The truth is that federal contract workers are essential workers and are critical to the federal government," Labor Secretary Marty Walsh said on November 22 during a conference call. "The people that we’re going to be covering clean and maintain federal buildings; they provide health care for veterans and child care to kids; they provide food services for the military; they build and repair roads and bridges all across this country."