The Trump administration has issued yet another executive order officially repealing the existing executive order that set the minimum wage for federal contractors at $15 per hour. The federal wage policy, along with some adjustments, had the minimum wage set at $17.75 for the year. However, that requirement, after the issue of the new executive order, now stands eliminated. If you are someone who wants to know more about the wage rollbacks in 2025, this article is for you. It brings you everything you need to know about the new executive order that now has the minimum wage for federal contractors set at $13.30 per hour.
Executive Order Brings The Minimum Wage Back To $13.30 Per Hour
The administration has recently issued the new wage policy for the year, which is going to repeal the minimum wage protection for employees working in the private sector with government contracts. The recently elected President Donald Trump issued EO 14236 and revoked EO 14026, the order that had the minimum wage rate for federal workers set at $15 per hour. The yearly adjustments had the minimum wage rate for this year officially set at $17.75. Following the newly introduced regulations, the Labor Department is going to stop the $17.75 per hour minimum wage for federal contractors.
Who’s Going To Take The Fall After This Executive Order?
The private sector workers the federal contractors have employed are the ones who are going to take the fall after the executive order. These workers roughly amount to 390,000 to 600,000 and are going to face major pay cuts that may go as high as 25%. The previous order covered employees working directly under or in connection with the federal contractors. Private organisations with federal contractors who have already established a contract with the workers will have to abide by it. The order will only affect the contracts that will be established in the future. The workers will now have to negotiate even harder if they wish to ensure their ways remain unaffected. However, the employers cannot be stopped from offering lower wage rates.
What Will Be The Effect Of The Federal Contractors’ Minimum Wage Change?
The previous administration under Joe Biden raised the wages for the workers, ensuring they were allowed a living wage. This, in turn, ensured these workers were an active part of the economy. With the new executive order issued, thousands of workers have now lost this protection. The federal minimum wage for the US was set at $7.25. This was done so that the prior contract wage laws gave workers a boost in society. The current regulations will still have the minimum wage for federal contractors higher than the federal standards of employment for other roles. However, the gap is still unfavorably narrow. On the other hand, many believe the changes will have employers hiring more people. But the real impact on workers requires a detailed analysis. The employers will now keep a close eye on how the Labor Department is going to implement the changes.
