On January 13, 2025, the Supreme Court opted against reviewing a lower court’s ruling on the president’s authority under the Procurement Act to enforce a minimum wage mandate for employees of federal contractors.
By declining the request for certiorari, the Court has inadvertently maintained a split among different circuits, leaving federal contractors in a state of uncertainty regarding the legal standing of the wage requirement, which stipulates a minimum pay of $17.75 per hour that has been in effect since January 1.
The Origin of the Wage Debate
The journey of this wage debate began with President Biden’s Executive Order 14026, issued in 2021, which raised the minimum wage for federal contract workers from $10.95 to $15 per hour.
The order also included provisions for annual raises.
In 2022, the Department of Labor (DOL) rolled out regulations to enforce these guidelines.
In the case that the Supreme Court refrained from hearing, a federal court in Colorado had denied a request to halt the enforcement of the minimum wage mandate.
This decision was upheld by the Tenth Circuit Court of Appeals, which indicated that the plaintiffs were unlikely to demonstrate a lack of authority on the part of the DOL to enforce rules stemming from Executive Order 14026.
However, the appeals court did not definitively address the deeper questions surrounding the president’s authority under the Procurement Act or whether this power improperly allocated legislative responsibilities to the executive branch.
By choosing not to intervene, the Supreme Court left these critical legal issues unsettled.
Ongoing Legal Challenges
Simultaneously, two other legal challenges are underway concerning the federal contractor wage mandate.
In a separate ruling last November, the Ninth Circuit Court of Appeals found that the president lacked the authority under the Procurement Act to issue Executive Order 14026.
The court criticized the DOL for its enforcement measures, calling the regulations arbitrary and failing to consider alternative wage options.
As with the Tenth Circuit, the Ninth Circuit didn’t deliver a final verdict on the case’s merits but returned it to a federal district court in Arizona, which had previously supported the wage mandate in another lawsuit filed by several states.
The district court is anticipated to make a decision regarding a preliminary injunction that could either affect only the plaintiff states or have a state-wide implication.
In addition, the Fifth Circuit is also examining a case related to the wage mandate, following a 2023 ruling that deemed Executive Order 14026 invalid, a result of a lawsuit from Louisiana, Mississippi, and Texas.
The Texas district court implemented a limited injunction relevant only to those states, deliberately avoiding a broader injunction that could clash with other federal court decisions favoring the executive order.
After hearing arguments last August, the Fifth Circuit could decide to overturn the Texas ruling, possibly validating Executive Order 14026.
This would create a conflict with the earlier Ninth Circuit ruling, though such an outcome seems unlikely at this point.
Future Implications of the Mandate
Currently, the minimum wage mandate continues to be in effect.
However, further legal challenges could emerge through various avenues.
The new Trump administration might opt to withdraw from the Fifth Circuit appeal and seek a rehearing of the Ninth Circuit’s decision.
Moreover, President-Elect Trump could take steps to revoke President Biden’s executive order and choose not to defend the wage mandate moving forward.
Source: Natlawreview