A U.S. appeals court upheld a Biden administration rule on Tuesday, requiring government contractors to pay seasonal recreational workers at least $15 an hour.
The Denver-based 10th U.S. Circuit Court of Appeals, in a 2-1 ruling, stated that the president’s authority under federal law to create an “economical and efficient system” of procurement extends to dictating worker wages, even when they do not directly provide services to the government.
Circuit Judge Allison Eid dissented, claiming that the federal Procurement Act of 1949, which grants the president broad discretion, violates the U.S. Constitution by lacking clear standards to limit it. Eid, appointed by Republican former President Donald Trump, argued that Congress needed to confine the President’s authority in more detail.
President Joe Biden, a Democrat, raised the minimum wage for workers on federal contracts to $15 an hour in a 2021 executive order. The U.S. Department of Labor then implemented a rule eliminating a Trump-era exemption for seasonal recreational employers.
The 10th Circuit affirmed a judge’s ruling declining to block the elimination of that exemption in a lawsuit brought by Arkansas Valley Adventures, a provider of guided raft trips on federal land, and the Colorado River Outfitters Association, a trade group for rafting companies.
Michael Poon
Michael Poon of the Pacific Legal Foundation, a libertarian group representing the plaintiffs, criticized the ruling, stating it gives the President unlimited unilateral power. He said the group is considering its options.
In a separate lawsuit, a federal judge in Victoria, Texas, last year blocked the Labor Department rule from being applied in Texas, Louisiana, and Mississippi. The department has appealed that ruling to the New Orleans-based 5th Circuit.
In Tuesday’s case, the plaintiffs argued that forcing recreational firms to pay workers $15 per hour would limit services and raise costs. They claimed the Labor Department failed to adequately explain why it had abandoned the exemption for their industry.
The 10th Circuit said the department had addressed those concerns in the rule and found that higher wages would reduce worker absenteeism and turnover and increase the quality of services provided to the government and the public.
The majority included Circuit Judges Jerome Holmes and David Ebel, appointed by Republican former presidents George W. Bush and Ronald Reagan.
