Five U.S. states are suing the Biden administration over its new minimum wage hike that requires federal agencies to pay contractors $15 per hour.
The change went into effect on Jan. 30, covering some 500,000 businesses that employ one-fifth of the entire U.S. labor force.
Defendants in the case are the U.S. Department of Labor and its Wage and Hour Division, President Joe Biden, U.S. Secretary of Labor Marty Walsh, and Acting Administrator of the Wage and Hour Division of the U.S. Department of Labor Jessica Looman.
Walsh previously said in November 2021 that implementing the measure “improves the economic security of these workers and their families, many of whom are women and people of color.”
The lawsuit argues that the Biden administration has violated the Procurement Act and the Spending Clause of the U.S. Constitution.
“Congress has repeatedly and consistently reserved to itself the issue of regulating wages in the private economy. ... Congress did not confer authority under the Procurement Act upon the President or any other executive branch official to regulate the minimum compensation of the employees of contractors and other entities with ‘contract-like instruments,’” according to the text of the complaint.
A release from Brnovich’s office asserted that Congress passed the Procurement Act “to provide the federal government with an efficient system for procurement amongst its agencies, not give it unrestricted power over the minimum wage.”
The attorneys general also noted the federal mandate will cost their respective states tax revenue “by greatly increasing the labor costs for companies in the State.”
“Those businesses in turn will have lower taxable income, and hence pay less in taxes to the state treasury. That decreased revenue will cause the Plaintiff States proprietary injury,” they added.
They also predict that the mandate will cause businesses to fire employees to decrease labor costs.
“The increased unemployment from fired employees will likely increase the burden on the Plaintiff States’ unemployment insurance funds, and it will inflict economic disruption on the States’ economies as a whole,” the complaint stated.
The lawsuit is requesting the court to declare the executive order and wage hike unlawful, and block them from taking effect.
The U.S. Department of Labor and the White House did not immediately respond to The Epoch Times’ request for comment.