3 GOP states sue Biden over federal contractor minimum wage increase

By Tierney Sneed and Tami Luhby, CNN

Republican attorneys general in three states filed a federal lawsuit on Thursday challenging President Joe Biden’s move to raise the minimum wage for federal contractors to $15 an hour.

The case — filed on behalf of Texas, Louisiana and Mississippi — argues that Biden did not have the authority to issue the policy. The lawsuit says, “President Biden chose to ignore the will of our federal legislators and instead forced a raise in the minimum wage through executive fiat.”

“Through leveraging the disproportionate bargaining power of the federal government, Defendants have decided to coerce federal contractors into abiding by a policy that Congress does not endorse, potentially affecting hundreds of thousands of businesses that employ as much as one-fifth of the entire U.S. labor force,” the lawsuit said.

The states allege the move was an unconstitutional usurpation of legislative power and that it is an unconstitutional exercise of the government’s spending power. The states also contend that the federal contractor minimum wage raise ran afoul of administrative law.

Biden announced the raise via an executive order last April. The Department of Labor finalized the regulation in November, with a rule that made the $15 an hour minimum wage effective January 30. It had been $10.95 an hour in 2021 for workers performing work on covered federal contracts.

Labor Secretary Marty Walsh is named as a defendant in the case, as is Jessica Looman, the acting director of the department’s Wage and House Division.

The White House defended both the President’s authority to raise the minimum wage for federal contractors, as well as the benefits of the action.

“The President acted well within his legal authority when he issued this executive order,” a White House spokesperson said. “As a result of raising the minimum wage, the federal government’s work will be done better and faster.”

Also, it will reduce turnover, absenteeism and supervisory costs, the spokesperson said.

Asked for comment, the Department of Labor referred CNN to the Justice Department, which declined to comment.

The states are pointing to state-funded universities that operate as federal contractors — and thus, are covered under the wage increase rule — as an example of how the policy is allegedly harming their state sovereignty and their citizens.

“The Wage Mandate will also, as Defendants are well aware, unavoidably require many businesses to dismiss employees, particularly low-wage employees, or pass the increased costs of retaining those employees onto Texas consumers,” the lawsuit said. “This will inevitably result in increased unemployment, inflation, or both, which will irreparably and substantially harm Texas and its individual citizens.”

The three states that filed the complaint are waging legal battles with the Biden administration on several fronts, including with lawsuits that have been brought against the administration’s immigration policies and coronavirus vaccine requirements.

Biden’s efforts to raise hourly wages as Congress’ bid at an increase falls short

The federal contractor minimum wage rule was one of several efforts by the President to raise hourly wages for workers nationwide. It takes effect when new contracts are signed or when certain contract actions, such as extensions or renewals, are executed. An estimated 300,000 people will see a raise, according to the National Employment Law Project, an advocacy group.

“These workers are critical to the functioning of the federal government: from cleaning professionals and maintenance workers who ensure federal employees have safe and clean places to work, to nursing assistants who care for the nation’s veterans, to cafeteria and other food service workers who ensure military members have healthy and nutritious food to eat, to laborers who build and repair federal infrastructure,” the White House said in a statement last April.

In an executive order in January 2021, Biden also directed agencies to determine which federal workers are earning less than $15 an hour and develop recommendations to promote bringing them up to that threshold. The minimum wage for federal civilian workers stationed in the US rose to that level at the end of January 2022, affecting an estimated 67,000 employees across the 2.2 million federal civilian workforce, according to the Office of Personnel Management.

The President also sought to raise the federal minimum wage to $15 an hour as part of his American Rescue Plan Act, which he signed into law last March. However, the Senate parliamentarian ruled against including it in the coronavirus relief bill, saying it did not meet a strict set of guidelines needed to move forward in the Senate’s reconciliation process.

The federal minimum wage has been $7.25 an hour since 2009.

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