States Challenge Federal Contractor Minimum Wage Increase

When the US$15 an hour minimum wage increase for federal contractors went into effect the end of January, not everyone was happy about it. Earlier this month, attorneys general in three states filed a federal lawsuit challenging the increase, The National Law Review reports.

The states of Texas, Louisiana, and Mississippi allege that the increase was an unconstitutional usurpation of legislative power by the Biden administration as well as an unconstitutional exercise of the government’s spending power. The states also contend that the federal contractor minimum wage raise went against administrative law.

U.S. President Joe Biden announced the raise through an executive order last April. The U.S. Department of Labor finalized the regulation in November, with a rule that made the $15 an hour minimum wage effective January 30. Before the law, the minimum wage for federal contractors was $10.95 an hour.

The White House defended the President’s authority to raise the minimum wage for federal contractors, adding that the action will reduce employee turnover during a time many employers are struggling to hire workers.