A federal appeals court has upheld former President Biden’s Executive Order 14026 establishing a $15.00 federal contractor hourly minimum wage and indexing it to inflation. In Texas v. Trump, the U.S. Court of Appeals for the Fifth Circuit found the increase to be within the President’s authority under the Procurement Act.
The Fifth Circuit concluded that raising the minimum wage to improve worker productivity, morale, and work quality sufficiently related to enhancing the procurement process’s economy and efficiency, and therefore Biden met the requirements of the Procurement Act.
Federal contractors must continue complying with the federal contractor minimum wage mandate. However, we should note that while the Fifth and Tenth Circuits have upheld it, the Ninth Circuit has ruled that the E.O. exceeded Biden’s authority. The government has asked the full Ninth Circuit to reconsider the case. However, for now, federal contractors must ensure that covered employees are paid at least $17.75 as of January 1, 2025.
Members of the Center for Workplace Compliance (CWC), our affiliated nonprofit membership association, can read more here.