The 2027 minimum wage rate for some federal contractor employees will increase from $13.65 to $14.05 per hour, while the tipped employee cash wage will rise from $9.55 to $9.85 per hour, the Labor Department has announced. The rates will take effect January 6, 2027.
These rates apply only to employees working on federal contracts entered into between January 1, 2015, and January 29, 2022, that were not renewed or extended on or after January 30, 2022. DOL noted that the number of these contracts continues to decline.
For most federal contractors, the updated rate may have little impact because contracts covered by the Davis-Bacon Act or Service Contract Act generally require higher prevailing wage rates. The increase relates to the limited number of non-DBA/SCA contracts that remain subject to E.O. 13658, such as some agreements involving federal property or federal lands.
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