The president issued an executive order last week purporting to raise the minimum wage for employees of federal contractors to $10.10 an hour. The order is unconstitutional.
The Supreme Court made clear in Youngstown Sheet and Tube Co. v. Sawyer that “the President’s power, if any, to issue the [executive] order must stem either from an act of Congress or from the Constitution itself.” Furthermore, “when the president takes measures incompatible with the expressed or implied will of Congress, his power is at its lowest ebb, for then he can rely only upon his own constitutional powers minus any constitutional powers of Congress over the matter.”
Nothing in the Constitution grants the president authority to set or raise the minimum wage independently of an act of Congress. Furthermore, although the president generally has authority to improve the efficient discharge of federal contracts, the president’s minimum-wage order is incompatible with the expressed and implied will of Congress.
Congress has made its will regarding the minimum wage for federal contractors abundantly clear in four separate statutes: The Service Contract Act, the Davis Bacon Act, the Walsh-Healey Act, and the Fair Labor Standards Act. Under those statutes, the minimum wage for many, if not most, employees of federal contractors is the prevailing minimum wage for employees in the specific job classification in the locality where the work is to be performed. For the remaining classifications of employees for whom no prevailing minimum wage exists, the minimum wage is slotted into the minimum for similar jobs, or is governed by the minimum set by Congress in the Fair Labor Standards Act, i.e., $7.25.
Interestingly, the executive order, replete with enough double negatives and disjunctive clauses to make the average federal bureaucrat’s head explode, contains a severability and savings clause as well as several qualifiers that the order be implemented “consistent with applicable law,” ”to the extent permitted by law,” and consistent with “prevailing wage law.” If the order is so implemented, most of it will be rendered a nullity, for its substantive provisions directly conflict with applicable law. Moreover, these clauses don’t render the order constitutional. This suggests that the White House came up with the idea for the executive order and put it in the State of the Union address before fully vetting it with the people charged with crafting the actual language and implementing it lawfully. The result is an order that is unconstitutional and/or a charade.
Nonetheless, the order exists and, until such time as Congress or the courts weigh in, federal contracts will contain the president’s minimum and federal contractors will have to consult with their lawyers on how it applies.