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Short answer: A contractor minimum wage is a floor for covered work; it does not replace the separate overtime calculation. For a worker covered by overtime law, the general benchmark is at least 1.5 times the applicable regular rate for hours over 40 in a workweek. But the rule formerly associated with the $15 federal-contractor minimum wage, Executive Order 14026, was revoked in March 2025, and the U.S. Department of Labor (DOL) says it no longer enforces that order or its implementing rule. A narrower group of older contracts may still be subject to Executive Order 13658, whose DOL-announced rates took effect May 11, 2026.
First, identify which contractor minimum-wage rule applies
Federal-contract work does not automatically entitle every employee to a special federal-contractor minimum wage. The relevant rule depends in part on the contract’s type, when it was entered into, renewed or extended, and whether the worker and work fall within the rule’s coverage. The contract’s wage terms and other applicable laws also matter.
Executive Order 14026 is no longer enforced by DOL
On March 14, 2025, Executive Order 14236 revoked Executive Order 14026, which had established a higher minimum wage for certain federal-contractor work. DOL says it no longer enforces EO 14026 or its implementing regulation, 29 CFR part 23. Older materials that describe the former $15 base rate or later EO 14026 rates should not be read as stating the current DOL enforcement position. That change does not, by itself, answer whether another wage rule or overtime law applies to a particular worker.
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DOL identifies EO 13658 as applying generally to certain contracts covered by the Davis-Bacon Act or Service Contract Act that were entered into, renewed or extended between January 1, 2015, and January 29, 2022, and were not renewed or extended on or after January 30, 2022. The date range is not enough on its own to decide coverage: the contract type, subsequent history, worker’s duties and other coverage conditions must be checked.
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For contracts that meet EO 13658’s criteria, DOL announced minimum rates effective May 11, 2026 of $13.65 an hour for non-tipped employees and $9.55 an hour for tipped employees. Those are EO 13658 rates, not a universal minimum for everyone employed by a federal contractor. They are also time-sensitive: use the rate and contract terms applicable to the work period being reviewed.
Does the contractor minimum wage change the overtime rate?
Not simply by adding a separate “contractor overtime” multiplier. Minimum wage and overtime are distinct checks. First determine the applicable wage floor for covered hours. Then determine whether the worker is entitled to overtime and, if so, the applicable regular rate for the workweek. Under the general overtime framework, covered employees receive at least one and one-half times the applicable regular rate for hours over 40 in a workweek.
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The DOL’s 2021 rule implementing EO 14026 stated that the Fair Labor Standards Act (FLSA) and the Contract Work Hours and Safety Standards Act require overtime of at least one and one-half times the regular rate of pay or basic rate of pay for all hours over 40 in a workweek for covered workers. That sentence comes from the former EO 14026 rule; it should not be mistaken for DOL continuing to enforce EO 14026. The general overtime principle must still be applied under the law that covers the worker and contract.
The practical consequence is that the applicable contractor minimum is not necessarily the employee’s overtime rate. If the employee’s regular rate is higher than the minimum, overtime is generally calculated from that higher rate. Conversely, satisfying the minimum-wage floor does not establish that overtime was paid correctly. The employee’s exemption status, hours, pay components and applicable law all affect the answer.
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How to check overtime without confusing the two calculations
- Define the workweek. Overtime is assessed by workweek, not by averaging hours across two weeks or a pay period. Identify the employer’s workweek and the hours worked in it.
- Establish the wage rule for the work. Confirm whether EO 13658 or another wage requirement applies to the contract and worker, and identify the rate effective during the workweek. Do not rely on a former EO 14026 rate as a current DOL-enforced floor.
- Check overtime coverage. Determine whether the worker is covered by the applicable overtime law and whether an exemption applies. A federal contract alone does not establish that every employee is covered in the same way.
- Count overtime hours. For a worker covered by the general framework, identify hours over 40 in the workweek. Hours are not converted into overtime merely because they are on a federal contract; the applicable overtime law and workweek determine the threshold.
- Determine the regular rate using the applicable law. Consider the workweek’s earnings and hours, along with which pay components must be included. Do not assume the EO 13658 minimum is the regular rate, or that a historical rule’s detailed regular-rate provisions govern every current pay arrangement.
- Compare the overtime payment with the required amount. Apply the required multiplier to the applicable regular or basic rate for overtime hours, taking account of the governing law and any required credits or adjustments. Review the wage floor separately for covered hours.
The former EO 14026 rule described the FLSA regular rate generally as total earnings in the workweek divided by the total hours for which that compensation was paid. That is useful context, but it is historical rule text, not a complete current calculation guide for every worker. The same former rule described a tipped-worker regular rate that included employer-paid cash wages and any tip credit taken, while excluding tips received above the tip credit. Do not apply those details automatically to a present-day arrangement without confirming the current law that governs it.
What the 2026 EO 13658 rates do—and do not—mean
The announced $13.65 non-tipped and $9.55 tipped hourly rates are minimum-wage floors for work that actually meets EO 13658’s coverage requirements. They do not establish a worker’s full compensation, determine overtime eligibility, or settle the regular-rate calculation. A worker may be due more under another applicable wage law or contract provision.
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DOL says an Executive Order contractor minimum does not cap wages required by another applicable federal, state or local law. If a higher applicable prevailing, state or local wage is required, the higher rate controls. DOL also says the EO 13658 hourly cash wage cannot be satisfied by counting fringe benefits toward that monetary floor. Treat the cash-wage test and any applicable benefit obligations as separate issues.
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Examples: where the two checks can diverge
A covered employee works more than 40 hours
Suppose a non-tipped employee performs work under a contract that is confirmed to be covered by EO 13658, and the workweek falls on or after May 11, 2026. The $13.65 rate is the applicable EO 13658 minimum floor for that worker’s covered hours, subject to any higher applicable wage requirement. If the employee is also entitled to overtime and works over 40 hours in the week, the overtime calculation is a separate step. The minimum floor alone does not prove the regular rate is $13.65 or determine the full amount due.
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A worker’s contract is too recent for the EO 13658 category described by DOL
A contract entered into, renewed or extended after January 29, 2022 does not fit the general EO 13658 contract-date description above. That does not mean the employee has no wage or overtime protections. It means the specific EO 13658 rates cannot be assumed to apply based only on employment by a federal contractor. Review the contract’s applicable wage terms and other federal, state and local requirements.
A higher wage rule applies
If a covered worker is subject to a higher applicable prevailing or jurisdictional wage, the EO 13658 amount is not a ceiling. Compare the relevant wage requirements and use the higher required wage for the covered work. Then assess overtime independently under the law that applies to the worker.
Records and details to gather before disputing a paycheck
An individual result cannot be established from an hourly rate and a statement that the employer has a government contract. Gather the information that determines both coverage and calculation:
- The contract or subcontract and its applicable wage determination, including the contract type and entry, renewal or extension dates.
- The employee’s job duties, work location, and the work performed on the contract.
- The dates and hours worked in each workweek, not just the total hours in a pay period.
- Pay records showing hourly rates, salary, bonuses, commissions, cash wages, tips where relevant, and any other compensation.
- Payroll records showing how overtime was calculated and which hours or pay components were included.
- The jurisdiction and any potentially applicable prevailing, state or local wage requirements.
These facts help separate three questions that are often mistakenly treated as one: whether a contractor wage floor applies, whether the worker is entitled to overtime, and how the worker’s regular rate is calculated. If the contract or payroll records do not make the answer clear, a labor agency or qualified employment-law professional can review the specific facts.
Quick Recap
Common mistakes to avoid
- Using the former EO 14026 rate as current law. DOL says EO 14026 and its implementing rule are no longer enforced after the March 2025 revocation.
- Applying EO 13658 rates to all contractor employees. The order covers a narrower set of contracts, and the relevant dates and terms must be verified.
- Treating the contractor minimum as an overtime rate. The minimum is a wage floor; overtime uses the applicable regular or basic rate for eligible workers.
- Assuming every employee is overtime-eligible or exempt. Duties and classification matter, and the contract alone does not settle status.
- Counting fringe benefits toward EO 13658’s cash floor. DOL describes the minimum as a monetary hourly wage that cannot be met with fringe benefits.
- Ignoring a higher wage requirement. An applicable higher federal, state, local or prevailing wage can control over the order’s minimum.
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