Limited federal-contract wage rates rise January 6, 2027
Oct 11, 2026 edition · GC-2026-0309 · Published 2026-10-11 · Version 3 · Final
DOL sets January 6, 2027 rates of $14.05 generally and $9.85 in tipped cash wages for the limited older-contract coverage of EO 13658. Contract dates and renewals control coverage, while contractors must cover any tipped-worker shortfall from the full minimum.
What happened
DOL's October 8 rate notice raises the EO 13658 minimum from $13.65 to $14.05 per hour and the associated tipped cash wage from $9.55 to $9.85, beginning January 6, 2027. The notice applies to covered work on or in connection with specified federal contracts entered January 1, 2015 through January 29, 2022, provided they were not renewed or extended on or after January 30, 2022. An exercised option can be such an extension. January 6 is the express effective date, rather than an inferred January 1 annual change.
For tipped workers, the lower cash figure is not permission for total compensation below the EO 13658 minimum. When a contractor takes a tip credit, tips must supply at least the difference between the cash wage and the full required minimum; the contractor must raise cash pay if tips fall short. The notice's discussion of the later executive order and its revocation does not remove the older order's contract-date limits. These rates therefore require a contract-specific coverage assessment rather than application to all healthcare employees or every organization receiving federal payments.
Scope and timing
- Authority status
- Final
- Applicability
- Potentially applicable
- Audience
- Health systems, Provider networks
- Jurisdiction
- Federal
- Recorded date
- 2027-01-06
- Date type
- effective
Why it matters
Coverage is limited to specified federal contracts entered January 1, 2015 through January 29, 2022 and not renewed or extended on or after January 30, 2022. The notice does not apply this rate to all healthcare workers or all federal contracts. Covered tipped workers must receive the full minimum through cash plus tips, with the contractor covering a shortfall.
Recommended action
Contracting and payroll owners should identify any remaining covered contracts, document the governing wage requirements and prepare the January 6 payroll update. Check applicable wage determinations and other wage protections before using this federal floor.
Sources
- EO 13658 minimum wage: 2027 rate changeOfficial · DOL Wage and Hour Division · 2026-10-08 · Source review 2026-10-11
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