The minimum wage rate applicable to workers performing work under a federal contract will increase to $10.35 per hour effective January 1, 2018. According to a Department of Labor Wage Standards Division notice published in the Federal Register earlier this month, the minimum hourly cash wage paid to tipped employees performing work under a covered contract will also increase to $7.25 per hour. The current minimum wage is $10.20 per hour and the current minimum hourly cash wage is $6.80 per hour.

These increases are mandated by Executive Order 13658, Establishing a Minimum Wage for Contractors, which was signed by President Obama in February of 2014. The Executive Order raised the minimum wage at that time to $10 per hour effective January 1, 2015. The Executive Order also established a methodology for calculating annual increases thereafter, requiring the Department of Labor to provide notice of any increase at least 90 days before it takes effect.