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Notice of 2021 Federal Contractor Minimum Wage Rate Change

September 23, 2020


The Department of Labor’s Wage and Hour Division (WHD) announced effective January 1, 2021, the new minimum wage for federal government contractors will be $10.95/hour as instructed by Executive Order 13658 (the Order), Establishing a Minimum Wage for Contractors.

The Order, adopted in 2014, raised the hourly minimum wage for federal contractor employees beginning on January 1, 2015, with annual adjustments after that. Each year, the WHD conducts an assessment to determine the yearly inflation-based increases to the minimum wage rate. The 2021 rate is an increase of $0.15/hour over the 2020 minimum wage.

The minimum wage for federal contractors applies to four categories of contractual agreements; service contracts covered by the Service Contract Act, construction contracts covered by the Davis-Bacon Act, concession contracts, and contracts connected with federal land use or property under which services are offered. However, any fringe benefits paid to workers may not count towards the wage rate.

The notice can be found at https://www.federalregister.gov/documents/2020/08/31/2020-19037/establishing-a-minimum-wage-for-contractors-notice-of-rate-change-in-effect-as-of-january-1-2021