On November 5, 2024, the Ninth Circuit Court of Appeals blocked President Biden’s 2022 Executive Order 14026, which increased the minimum wage paid by federal contractors to their employees in connection with covered federal contracts to $15 per hour in 2023. Executive Order 14026 further required that each year thereafter, the minimum wage paid by federal contractors would increase to an amount determined by the U.S. Department of Labor (DOL). The minimum wage paid by federal contractors was set to increase to $17.75 per hour in 2025.
The Ninth Circuit, however, vacated the order, determining that President Biden lacked authority to impose the $15 minimum wage mandate for federal contractors. The court reversed the lower court’s dismissal of the challenge to the Executive Order and remanded the case to the lower court for further proceedings based on its decision.
The Ninth Circuit decision conflicts with a 10th Circuit Court of Appeals decision earlier this year on the same Executive Order. On April 30, 2024, the 10th Circuit affirmed a lower court’s decision denying an injunction to block the Executive Order and found that the implementing regulations were permissible as a matter of law.
The Ninth Circuit covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington. The 10th Circuit covers Colorado, Kansas, New Mexico, Oklahoma, Utah, and Wyoming.
When there is a conflict between federal circuit courts, the Supreme Court generally is asked to resolve the conflict. Here, there is already a petition to the Supreme Court to review the 10th Circuit decision. Therefore, this conflict is likely to make its way to the Supreme Court for a resolution. However, despite the lengthy years-long litigation over this Executive Order, in the end, it will likely be repealed and replaced by the returning Trump administration in January 2025 — thus resolving the issue. Employers Council will continue to update our members on this issue as we learn more. Contact us with questions at info@employerscouncil.org.
George Russo is an attorney for Employers Council and the director of Colorado membership.