Policy Week in Review – February 6, 2026

Why It Matters

Higher contractor wages increase labor costs for federal projects, while extra H‑2B visas aim to alleviate seasonal labor shortages. The franchise legislation could reshape employer responsibilities across a multi‑billion‑dollar sector.

Key Takeaways

• Federal contractor minimum wage raised to $13.65 hourly
• Tipped workers' wage climbs to $9.55 under same contracts
• 64,716 supplemental H‑2B visas authorized for 2026
• Visas target businesses facing imminent financial harm
• American Franchise Act clarifies joint‑employer definition for franchisors

Pulse Analysis

The Department of Labor’s wage adjustment reflects a broader trend of tightening labor standards for government‑linked work. By lifting the baseline to $13.65, the agency signals that federal contractors must budget for higher payroll expenses, potentially reshaping bid strategies and prompting firms to reassess automation or subcontracting options. Compliance timelines are short, giving companies little room for gradual implementation, which could spur legal challenges or accelerated wage‑increase negotiations with unions.

The supplemental H‑2B allocation responds to persistent seasonal labor gaps in hospitality, landscaping, and construction. By capping the visas at 64,716 and restricting eligibility to employers demonstrating imminent financial harm, the rule balances industry demand with immigration oversight. Businesses that can document severe revenue threats stand to secure critical staffing, while the limited pool may intensify competition among firms, encouraging more rigorous workforce planning and potentially accelerating the adoption of domestic training programs.

The American Franchise Act’s joint‑employer clarification could have sweeping implications for the franchising model, which accounts for a sizable share of U.S. employment. By tying liability to “substantial direct and immediate control,” the bill aims to protect franchisors from blanket responsibility while preserving worker protections where franchisors truly dictate employment terms. Bipartisan backing and a growing cosponsor list suggest momentum, and if enacted, the legislation may prompt franchisors to restructure oversight mechanisms, influencing contract language, compliance audits, and labor‑relations strategies across the sector.

Policy Week in Review – February 6, 2026

Policy Week in Review · Littler’s Workplace Policy Institute

DOL Announces Minimum Wage Rate Change for Federal Contractors

The Department of Labor’s Wage and Hour Division issued a notice setting a new minimum wage rate of $13.65 per hour for workers performing work on or in connection with federal contracts entered into between January 1, 2015 and January 29, 2022 that were not renewed or extended on or after January 30, 2022.

The minimum wage for tipped employees performing work in connection with those covered contracts increases to $9.55 per hour. The rate changes will go into effect 90 days after publication in the Federal Register. Read Littler’s analysis here.

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DHS and DOL Release Supplemental H‑2B Visas for 2026

The Departments of Homeland Security and Labor published a temporary rule authorizing up to, but not more than, an additional 64,716 H‑2B visas for Fiscal Year 2026, to be distributed in three allocations.

The supplemental visas will be available only to American businesses that “are suffering or will suffer impending irreparable harm, i.e., those facing permanent and severe financial loss, as attested by the employer.”

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Bipartisan Joint‑Employer Bill Gains Support

The congressional Problem Solvers Caucus—a group of Republican and Democratic members of Congress seeking solutions to key national issues—endorsed the American Franchise Act. The bill aims to protect the franchise business model by amending the National Labor Relations Act and the Fair Labor Standards Act to clarify that a franchisor may be considered a joint employer of a franchisee’s employees only if the franchisor possesses and exercises substantial direct and immediate control over the essential terms and conditions of employment.

The bipartisan bill is sponsored by Representatives Kevin Hern (R‑OK) and Don Davis (D‑NC) and currently has 77 cosponsors.