Former President Donald Trump has repealed an executive order enacted by his predecessor, President Joe Biden, which mandated that businesses contracting with the federal government pay their workers a minimum wage of $17.75 per hour. This move, announced late Friday, is part of a broader effort to roll back nearly 20 Biden-era executive orders and memos, marking a significant shift in the administration’s approach to federal contracting and labor standards.
Biden’s order, which took effect in January 2022, initially raised the minimum wage for federal contractors to $15 per hour with automatic annual adjustments. This rate increased to $17.75 in January 2023. The rule directly impacted federal contractors, including many large companies, which employ around 20% of the U.S. workforce.
Under Trump’s new directive, contractors involved in agreements prior to Biden’s wage hike will revert to paying their workers $13.30 an hour, in line with an Obama-era executive order. For contracts after Biden’s January 2022 mandate, companies will now be required to pay workers at least the federal minimum wage of $7.25 an hour or applicable state minimum wages, which could go up to $17.50 in certain areas.
This latest move by Trump also rescinds Biden-era policies that had made it easier for businesses to win federal contracts by pledging neutrality in union campaigns or engaging in government-approved apprenticeship programs. Trump did not provide an explanation for the decision to roll back these executive orders.
Critics of Biden’s wage mandate, including many business groups and Republican lawmakers, argue that the higher wage rate made it more difficult for smaller businesses to compete for government contracts. They also contend that the $17.75 minimum wage was unreasonably high in areas of the country with lower costs of living.
Although a pair of appeals court rulings had upheld Biden’s wage rule, Trump’s actions could signal a shift in federal procurement policy. Legal experts suggest that Trump may use the authority granted by the 1949 procurement law to further advance his agenda, which could include the elimination of corporate diversity initiatives.
While Trump did not overturn Obama’s original minimum wage order during his first term, he had exempted contractors operating seasonal recreational businesses on federal land. Biden had later removed this exemption, a change upheld by a U.S. appeals court last year.
