Part of Biden’s $15 Contractor Minimum Wage Order Has Been Halted Temporarily

A federal court temporarily halted part of President Biden’s executive order that requires contractors to pay their employees a $15 an hour minimum wage. 

President Biden issued an executive order in April that required contractors to pay their employees a $15 minimum wage starting in 2022, which commenced the rulemaking process for a final rule that took effect on Jan 30. The rule also eliminates the tipped minimum wage for contractors by 2024, ensures that federal contract workers with disabilities receive the $15 minimum wage and restored the minimum wage protections for outfitters and guides on federal lands (by revoking a May 2018 executive order from President Trump).

Arkansas Valley Adventures (and its owner)–– ​​a licensed river outfitter regulated by the Colorado Division of Parks and Wildlife––and the Colorado River Outfitters Association, a nonprofit trade association that represents river rafting outfitters in Colorado, filed a lawsuit in December challenging the minimum wage order as it applies to recreational companies. The U.S. District Court for the District of Colorado denied the outfitters’ request for a preliminary injunction on the rule on Jan. 24, so they then appealed the decision. 

“We enjoin the government from enforcing the minimum wage order in the context of contracts or contract-like instruments entered into with the federal government in connection with seasonal recreational services or seasonal recreational equipment rental for the general public on federal lands,” said the ruling from the U.S. Court of Appeals for the Tenth Circuit. “This injunction shall remain in force until further order of this court.”

Caleb Kruckenberg, an attorney for Pacific Legal Foundation, which is representing the plaintiffs, said in a statement on Thursday, “this ruling helps more than 40,000 companies like Arkansas Valley Adventures who provide seasonal recreational services on federal lands.” 

He added: “The court recognized that this wage rule doesn’t make sense for the industry, would limit access to the outdoors, and would reduce employment opportunities for people in the industry. More importantly, the court also recognized that the president did not have the authority to issue the rule.” 

When asked for comment, the Labor Department referred to the Justice Department, which did not immediately respond. The White House also did not immediately respond for comment on the ruling. 

Related, last week, seven states sued the Biden administration over its new requirement that contractors pay their employees a $15 per hour minimum wage. 

A White House spokesperson speaking on background told Government Executive last Friday that the “executive order will promote economy and efficiency in federal contracting, providing value for taxpayers by enhancing worker productivity and generating higher-quality work by boosting workers' health, morale and effort.” 

Also, “the federal government’s work will be done better and faster,” said the spokesperson. “The president acted well within his legal authority when he issued this executive order.”