President Donald Trump has reversed a minimum wage requirement imposed by his predecessor Joe Biden on federal contractors, which required businesses to pay workers $17.75 an hour. The order, adopted in January 2022, applied to around 20% of U.S. workers who are employed by federal contractors.
As a result, most contractors will now be required to pay the federal minimum wage of $7.25 per hour or state minimums, which range from $13.30 to $17.50 per hour. The decision was made without explanation from Trump, but critics of the Biden-era order had argued that it made it harder for smaller businesses to compete for contracts.
The reversal comes as part of a broader package of executive orders rescinded by Trump, including those on corporate diversity initiatives and apprenticeship programs. The U.S. Supreme Court declined to review an appeals court ruling upholding the minimum wage requirement last January, but Trump’s move could potentially pave the way for further challenges to Biden-era regulations.
The decision affects around 20% of the U.S. workforce, which is employed by federal contractors. When Biden initially raised the minimum wage to $15 per hour, it was later increased to $17.75 in January. The order was made under a 1949 law that allows the president to regulate federal contracting to promote economic efficiency and competitiveness.
The reversal of the minimum wage requirement is part of a larger effort by Trump to roll back regulations imposed by his Democratic predecessor.
Source: https://www.reuters.com/world/us/us-judge-extend-block-trump-administration-ordering-mass-firings-2025-03-13