Federal contractor minimum wage challenges increase

The latest litigation against President Joe Biden’s federal contractor minimum wage was heard by the U.S. 9th Circuit Court of Appeals on February 6, 2024. The litigation is one of three separate lawsuits challenging the Executive Order (EO) that raised the federal contractor minimum wage to $15 from $11 in January 2022. The Republican-led states of Idaho, Indiana, Nebraska, and South Carolina appealed a decision of the federal district court in Arizona upholding the federal minimum wage. The states had filed the litigation challenging the minimum wage EO as exceeding the president’s authority under the Procurement Act as well as violating the Administrative Procedures Act and the major questions doctrine. The major questions doctrine holds that Congress cannot delegate to the executive branch administrative agencies the power to make major changes in federal policy.

Oral argument before 9th Circuit

In the oral argument on February 6, the Department of Justice—arguing for the Department of Labor (DOL)—said that the Procurement Act includes broad language that allows the president to issue policies he considers “necessary” to promote the Act’s goals of “economy and efficiency.”

The judges on the panel responded skeptically to the Biden administration’s argument that paying contractor workers better promotes economy and efficiency and therefore satisfies the Federal Property and Administrative Services Act or Procurement Act. The judges also challenged the states’ argument that President Biden’s wage order was very different from the wage mandates put in place by Presidents Obama and Trump.