Trump Rescinds Biden’s Labor Orders: What It Means for Federal Contractors

On March 14, 2025, President Trump revoked two significant Biden-era executive orders, bringing major changes to federal contracting policies:

1. Executive Order 14026 (Increasing the Minimum Wage for Federal Contractors) – Issued by President Biden in 2021, this order raised the minimum wage for federal contractors to $15 per hour, with annual adjustments for inflation. By 2025, the mandated wage had reached $17.75. The revocation removes this wage floor. It may allow contractors to set wages based on state or federal minimum wage laws rather than a presidential directive. Just note that though Executive Order 13658, President Obama previously raised the minimum wage on federal construction and services contracts to $10.10 per hour.
2. Executive Order 14126 (Investing in America and Investing in American Workers) – Issued in 2024, this order promoted project labor agreements, union neutrality, and workforce development incentives in federally funded projects. It encouraged equitable compensation, registered apprenticeships, and community benefits agreements to support job training, particularly for underserved communities. With its rescission, contractors are no longer required to meet these labor-friendly provisions.

Legal Challenges to Biden’s Minimum Wage Order

President Biden’s authority to impose a minimum wage for federal contractors via executive order faced multiple legal challenges. As Rebecca Rainey at Bloomberg Daily Labor Report reported, appellate courts had split on whether the president had the authority to set wages through executive action. The Fifth and Tenth Circuits greenlit the minimum wage hike. The Ninth Circuit did not. By revoking EO 14026, President Trump has effectively ended the debate—at least for now—by removing the wage requirement entirely.

Key Takeaways for Employers

1. State and Federal Minimum Wage Laws Control Now
   The rollback of Executive Order 14026 removes the mandatory $17.75 per hour wage for federal contractors, allowing employers to set wages on federal contracts based on market conditions. Unless the Department of Labor enforces the Obama Executive Order, which seems unlikely, state and federal minimum wage requirements will be the new floor.
2. Changing Labor Relations and Union Dynamics
   Without the workforce protections in Executive Order 14126, federal contractors are no longer required to adopt union-friendly measures such as project labor agreements or union neutrality. This may lead to fewer unionized workplaces and greater autonomy in workforce management. However, it could also result in increased labor disputes and potential disruptions.
3. Reduced Compliance Burdens but Fewer Workforce Incentives
   The elimination of federal incentives for registered apprenticeships, equitable pay policies, and community benefits agreements means that businesses have fewer compliance obligations. Contractors who benefited from access to skilled labor through these initiatives may need to find alternative ways to recruit and train employees, particularly in industries facing workforce shortages.

Final Thought

President Trump’s decision to revoke these executive orders signals a shift away from Biden-era labor protections, favoring cost reductions and deregulation for federal contractors. Additionally, the move removes some lingering legal uncertainty surrounding the president’s authority to impose minimum wage mandates on federal contractors, which had already been creating compliance concerns.

What remains to be seen is what measures, if any, will fill the void.