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President Biden’s Minimum Wage Mandate Attacked by Three States

  • Texas AG Ken Paxton, Louisiana AG Jeff Landry, and Mississippi AG Lynn Fitch, sued President Biden and the Department of Labor to block the imposition of a $15 minimum wage for federal contractors through an Executive Order that took effect on January 30.
  • The Complaint seeks to enjoin both the minimum wage regulation and a simultaneous regulation phasing out the “tip credit” for federal contractors by 2024—the ability of employers to pay less than the minimum wage if tipped workers are recouping the difference through tips—over claims that the President is exceeding his authority under the Procurement Act and violating the Administrative Procedure Act and the U.S. Constitution’s non-delegation doctrine, which precludes Congress from delegating lawmaking authority to the executive branch.
  • The States further claim that the mandate affects more than 500,000 companies and will cause a surge in unemployment claims as companies will lay off workers either due to increased labor costs or diminished business as a result of the higher costs of producing goods that will ultimately be passed onto consumers, leading them to buy less goods and services.