Apr 14, 2025
Minimum Wage for Federal Contractors Cut in 2025: What Workers Should Know
In March 2025, a new executive order lowered the federal contractor minimum wage from $17.75 to $13.30 per hour, reversing years of wage increases aimed at protecting workers on federal projects. This change affects hundreds of thousands of private-sector employees who work on federally funded contracts—and many are now facing potential pay cuts of up to 25%.
This article explains what minimum wage is, how this policy shift came about, which workers are impacted, and how you can stay in control of your finances with tools like Copiafy.
What Is the Minimum Wage in the U.S.?
As of 2025:
Federal minimum wage: $7.25 per hour (unchanged since 2009)
Federal contractor minimum wage: Now $13.30 per hour (was $17.75)
Tipped workers: $2.13/hour + tips (must reach $7.25 total)
Some states have set higher minimum wages, with rates ranging from $8.75 to over $16.66 per hour. In states like California, Washington, and Connecticut, minimum wage laws exceed the federal floor. See your state’s minimum wage.
What Changed for Federal Contractor Wages?
In 2021, the Biden administration raised the minimum wage for federal contractors to $15/hour, with automatic inflation adjustments that brought it to $17.75 by 2025.
However, on March 14, 2025, the Trump administration issued Executive Order 14236, rolling back those protections. This new policy:
Revokes EO 14026, which set the $15/hour minimum
Reduces the required wage to $13.30/hour
Allows employers to renegotiate future contracts at lower rates
According to the Center for American Progress, this change could impact up to 600,000 workers across industries like construction, food service, national parks, and maintenance.
What States Still Use the $7.25 Minimum Wage?
Seven states—Alabama, Georgia, Louisiana, Mississippi, South Carolina, Tennessee, and Wyoming—have no state minimum wage or use the federal rate of $7.25/hour.
States with minimum wage over $15/hour include:
Washington: $16.66
California: $16.50
Connecticut: $16.35
New Jersey: $15.49
💡 Explore a state-by-state wage chart →
Who’s Affected by the $13.30 Contractor Wage?
Workers most affected include:
Janitors, security guards, and maintenance crews on federal sites
Food service workers and cashiers in national parks
Laborers on federal construction contracts
Concession workers and uniform providers for government facilities
These workers may now see wage cuts unless protected by union contracts or state/local laws that require higher pay.
Why Does the Minimum Wage Matter?
The minimum wage sets the lowest legal amount workers can be paid. Increasing it can help people afford basic expenses like rent, food, and transportation—but critics argue it can also lead to fewer job opportunities if businesses can't afford higher wages.
💬 Common questions people ask:
Is $17 an hour a minimum wage? → No, it was the federal contractor wage before this rollback.
What is the federal minimum wage? → Still $7.25/hour.
Why is minimum wage different by state? → States can set higher rates, but not lower than federal.
What Can You Do?
If you’re worried about how this change could affect your pay, budgeting becomes more important than ever.
Copiafy is a modern financial tool that helps you:
Track income, bills, and spending
Set smart savings goals
Manage credit and avoid overspending
Plan ahead—even if wages change
📲 Take control of your money. Start using Copiafy today.
