Multiple lawsuits challenge federal contractor $15 minimum wage

On January 30, 2022, the minimum wage for certain federal contractors increased to $15 per hour. President Joe Biden issued Executive Order (EO) 14026 on April 27 to increase the minimum wage, directing the U.S. Department of Labor (DOL) to issue regulations for federal contractors that have procurement contracts for construction covered by the Davis-Bacon Act (DBA); service contracts covered by the Service Contract Act (SCA); concessions contracts, including any concessions contract excluded from the SCA by the DOL’s regulations at 29 CFR 4.133(b); and contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

This EO is an expansion of President Barack Obama’s EO 13658. The final regulations issued by the DOL on November 22, 2021, set the effective date of January 30, 2022.

Litigation over scope of federal minimum wage

In December 2021, a whitewater rafting and adventure tour company and a river rafting industry group sued the Biden administration to block the enforcement of the increase, claiming they are not federal contractors but rather permitholders and should not be covered by the increase. In addition, the complaint alleged that in issuing the $15 minimum wage for federal contractors, President Biden went beyond his authority under the Federal Property and Administrative Services Act, known as the Procurement Act, which requires the federal government to carry out procurement policies and directives that are economical and efficient.