Following President Trump’s issuance of Executive Order 14148 on January 20, 2025, which rescinded 78 executive actions taken by Former President Biden, the President rescinded an additional slew of Biden-era executive actions on March 14. Among the 18 executive actions revoked is a duo of Executive Orders which applied to federal contractors and subcontractors and will impact labor and employment issues:

  1. Executive Order 14026 of April 27, 2021 (Increasing the Minimum Wage for Federal Contractors); and
  2. Executive Order 14126 of September 6, 2024 (Investing in America and Investing in American Workers).

Executive Order 14026

Rescinded Executive Order 14026 (E.O. 14026) raised the minimum wage requirement for employees of federal contractors and subcontractors to an initial minimum wage rate of $15.00 per hour beginning on January 30, 2022. As of January 1, 2025, the minimum wage rate had increased to $17.75 per hour, with subsequent inflation-based adjustments determined annually by the U.S. Department of Labor (DOL).

E.O. 14026 generally applied to the following categories of new contracts and contract-like instruments and any extensions, renewals, or options of existing contracts and contract-like instruments under 29 CFR § 23.30:

  1. Procurement contracts for construction covered by the Davis-Bacon Act;
  2. Service contracts covered by the Service Contract Act;
  3. Concessions contracts; and,
  4. Contracts entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.

Covered contracts must also have satisfied any applicable value threshold requirements.

Workers who performed on or in connection with covered contracts were entitled to the minimum wage under E.O. 14026 if their wages under the contract were governed by the Fair Labor Standards Act, the Service Contract Act, or the Davis-Bacon Act (except for those individuals employed in a bona fide executive, administrative, or professional capacity), regardless of the contractual relationship alleged to exist between the individual worker and the employer.

Executive Order 14126

Rescinded Executive Order 14126 (E.O. 14126) had provided for union neutrality in federal infrastructure investment projects and favored equitable compensation practices and registered apprenticeship programs. E.O. 14126 directed the federal implementing agencies tasked with selecting projects to receive federal financial assistance from the Investing in America agenda to consider actions that prioritized projects that:

  • Provided a clear plan for efficient project delivery by promoting positive labor-management relations;
  • Enhanced worker productivity by promoting family-sustaining wages;
  • Supplied critical benefits that promote economic security for workers, such as paid leave (including paid sick, family, and medical leave), health care, retirement benefits, and child, dependent, and elder care;
  • Promoted and expanded access to, and put in place policies that combat discrimination that limits employment in, high-quality jobs for workers from underserved communities;
  • Strengthened workforce development by expanding worker access to high-quality training and portable credentials that lead to good jobs; and
  • Promoted and protected worker health and safety through policies that encourage supplemental safety training, worker and union participation in the design and implementation of workplace safety and health management systems, and disclosure of occupational safety and health violations.

E.O. 14126 defined “implementing agencies” as the Department of the Interior, the Department of Agriculture, the Department of Commerce, the Department of Labor, the Department of Housing and Urban Development, the Department of Transportation, the Department of Energy, the Department of Education, the Department of Homeland Security, and the Environmental Protection Agency.

Takeaways

The revocation of E.O. 14026 and E.O. 14126 continues the new Administration’s pattern of rolling back the previous Administration’s worker and labor-friendly policies. Federal contractors and subcontractors are no longer required to comply with the minimum wage mandate of E.O. 14026 or adhere to the labor-friendly provisions of E.O. 14126, providing more flexibility in setting wages and negotiating labor and contract terms.

Ballard Spahr’s Labor and Employment Group frequently advises employers on issues related to labor and employment policies. We will continue to monitor the new Administration’s agenda and the impact of further executive actions affecting federal contractors, subcontractors, and employers. Please contact us if we can assist you with these matters.