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President Donald Trump has rescinded an executive order issued by his Democratic predecessor, Joe Biden, that required businesses that contract with the federal government to pay workers a minimum wage of $17.75 an hour.
Trump, a Republican, late on Friday repealed nearly 20 Biden-era memos and executive orders touching on a range of topics, including the 2021 mandate that significantly raised pay for workers on federal contracts.
Biden had initially raised the minimum wage to $15 an hour with automatic updates, and it rose to $17.75 in January.
Federal contractors, including many of the country’s largest companies, employ roughly 20% of the U.S. workforce.
For contracts entered into before Biden’s order took effect on January 30, 2022, contractors will be required to pay workers $13.30 an hour under an Obama-era executive order. Other contractors will only be required to pay the federal minimum wage of $7.25 an hour or applicable state minimum wages of up to $17.50 an hour.
President Barack Obama, a Democrat, had raised the minimum wage for federal contractors to $10.10 in 2014, with periodic increases. Biden’s order replaced that mandate, but did not repeal it.
Trump on Friday also eliminated Biden orders that had made it easier for companies to win federal contracts if they vowed to remain neutral in union campaigns and participated in government-approved apprenticeship programs.
Trump did not explain why he repealed the orders. Critics of Biden’s wage mandate, including many business groups and Republicans, have said it made it more difficult for smaller businesses to compete for contracts and that the required wage was too high to be applied in areas of the country with lower costs of living.
A pair of appeals court rulings that had upheld Biden’s order against challenges by businesses and Republican-led states could still be a boon to Trump if he uses his powers over federal procurement to implement other parts of his agenda, such as eliminating corporate diversity initiatives. The U.S. Supreme Court in January declined to review one of those decisions.
Those cases questioned the scope of a 1949 law that allows the president to regulate federal contracting in any way he deems necessary to promote the economy and efficiency. The courts that backed Biden’s order said that power extends to setting a minimum wage for contractors.
Trump did not repeal Obama’s minimum wage order in his first term, but did exempt contractors that operate seasonal recreational businesses on federal land.
When Biden raised the minimum wage, he also eliminated that exemption, a move that was upheld by a U.S. appeals court last year.
(Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi and Bill Berkrot)
