Washington, D.C. — In a move drawing sharp criticism from labor advocates and policy experts, the Trump administration has repealed a Biden-era rule that guaranteed higher wages for workers employed by federal contractors. The rollback of the regulation, which had raised the minimum wage for these private sector workers to $17.75 per hour, could result in a pay cut of up to 25 percent for hundreds of thousands of employees, according to a new column from the Center for American Progress (CAP).
The original regulation, enacted by the Biden administration in 2021, was part of a broader effort to ensure fair wages across federal contract work. It raised the minimum pay for 327,300 workers—many of whom had previously earned less than $15 an hour and lacked a college degree—by an average of $5,228 annually.
Now, with the rule rescinded, federal contractors can pay their workers as little as $13.30 per hour, which critics say is not only a regression in wage standards but a direct blow to some of the country's most economically vulnerable workers.
“This new policy is a slap in the face to hundreds of thousands of hardworking Americans who rely on federal contracts for their livelihoods,” said Aurelia Glass, policy analyst for Inclusive Economy at CAP and author of the column. “The Trump administration claims to be here to support working-class people, but at every chance they get, they reverse hard-earned regulations that have been pivotal to helping workers on federal contracts increase their wages.”
The repeal also undermines other labor protections, as federal wage laws like the Service Contract Act and the Davis-Bacon Act often exclude certain types of work or offer lower minimum standards. That leaves many workers in a gray area—technically protected by federal contract labor laws, but now potentially facing steep wage cuts without a regulatory floor.
“This is not just a technical policy change—it has real and immediate consequences,” Glass added. “These are blatant attempts to make it harder for workers to make ends meet, further proving that the administration’s policies fail to put American workers first.”
The change is likely to affect workers across a range of industries, including food service, custodial, maintenance, and transportation jobs that are commonly outsourced through federal contracts. Many of these roles are filled by people of color, women, and workers without advanced educational credentials—groups that already face systemic barriers in the labor market.
CAP's column underscores that the wage cuts come at a time when inflation continues to impact household budgets and when income inequality remains a pressing national concern. For workers already living paycheck to paycheck, a cut from $17.75 to $13.30 an hour could mean losing the ability to pay rent, afford groceries, or cover childcare costs.
Despite campaign rhetoric focused on revitalizing the middle class and protecting American jobs, the Trump administration's latest move has reignited concerns that its economic policies favor corporations and cost-cutting over worker welfare.
Advocates are calling on Congress and future administrations to reinstate higher wage protections and consider codifying them into law, to prevent similar reversals in the future. For now, the rollback represents a major setback for wage equity among federal contract workers—and a reminder of the fragility of regulatory progress in labor rights.
Originally reported by American Progress.