Biden’s $15 minimum wage for federal contractors blocked by US judge

By Daniel Wiessner

(Reuters) – A federal judge in Texas has ruled that President Joe Biden lacked the power to order U.S. government contractors to pay workers a minimum wage of $15 an hour, and blocked the plan from being enforced in three states.

In a ruling late on Tuesday, U.S. District Judge Drew Tipton in Victoria decided that because the Democratic president’s 2021 executive order potentially affects millions of workers and has “vast economic and political significance,” only Congress had the power to adopt it.

Tipton, an appointee of Republican former President Donald Trump, blocked the Biden administration from enforcing the $15 minimum wage in Texas, Louisiana and Mississippi, states that last year filed a lawsuit challenging the executive order. State agencies often receive federal contracts.

The judge paused his decision for seven days to allow the Biden administration to file an appeal.

Tipton made the ruling in part on the basis of what is called the major questions doctrine, a judicial approach that the U.S. Supreme Court has employed to invalidate major Biden policies including student debt relief deemed lacking clear congressional authorization. Tipton also found that Biden ran afoul of a federal law called the Procurement Act, which governs the way goods and services are purchased by federal agencies.

The White House did not immediately respond to a request for comment.

The executive order from Biden, who is seeking re-election next year, was one of his pro-labor moves since becoming president as he makes supporting blue-collar workers a priority.

The federal government spends hundreds of billions of dollars each year on contracts with private businesses, nonprofit entities and state agencies to provide goods and services.

The minimum wage under federal law is $7.25 an hour, though many states set higher minimums. Four states and several cities have a minimum wage of at least $15.

The White House last year estimated that 327,300 employees of federal contractors were paid less than $15 an hour, and that raising their wages would cost employers $17 billion over 10 years.

The administration argued that the Procurement Act gives the president broad powers to implement policies aimed at fostering an efficient contracting system. But Tipton agreed with the states that a president’s authority was limited to supervising the buying and selling of goods. Only Congress can set minimum wages and adopt other employment policies unless it specifically grants those powers to federal agencies, Tipton wrote.

A spokesperson for Mississippi Attorney General Lynn Fitch, a Republican, said: “We are pleased the court reached the same conclusion we did, that Congress has not given the Biden administration authority to enact this burden on an already faltering economy (through) executive fiat.”

In January, a federal judge in Arizona dismissed a similar challenge to Biden’s executive order by five other Republican-led states. The states have appealed.

The major questions doctrine is an outgrowth of an approach favored by many conservatives and business groups to curb what they call the excesses of the “administrative state.” They object to what they see as accumulated power by the U.S. government’s executive branch without proper checks by the courts and Congress.

(Reporting by Daniel Wiessner in Albany, New York; Editing by Will Dunham and Alexia Garamfalvi)

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