Although Congress opened a discussion about raising the minimum wage to $ 15 an hour, President Joe Biden had previously issued an executive order that would raise the minimum wage for federal contractors to $ 15 – and fearing the increase With costs to sink their business, Colorado rafting companies have filed a lawsuit to overturn part of that order.
Posted April 27, Biden’s order states that starting January 30, 2022, federal contractors must pay all workers at least $ 15 an hour; lower pay for tipped employees will be phased out by 2024. The order builds on the one issued in 2014, when Biden was vice president; Donald Trump changed this ordinance while he was president to exclude outfitters and guides operating on federal lands. Biden’s new version revokes that exemption, and as a result, many Colorado companies whose operations depend on federal permits and property may soon have to pay their workers more.
One Colorado company that will be affected is Xanterra, a luxury travel company that operates hotels in many national parks across the country, including Yellowsone, the Grand Canyon and the Rocky Mountain National Park. Xanterra, which is owned by billionaire Philip Anschutz, is one of the largest companies under the order. Businesses that operate ski resorts will also be affected; they mainly operate on federal lands.
But many of the companies affected don’t have deep pockets, especially those in the rafting industry, according to David Costlow, CEO of the Colorado River Outfitters Association.
That’s why the Colorado River Outfitters Association, in conjunction with the Arkansas Valley Adventure, is suing the Department of Labor and the Biden administration, demanding an exemption from the order for those permitted to work on federal land.
“As a community we’ve had to come together and be on the same page and say, ‘No, this is hurting the industry,’” said Costlow. The Colorado River Outfitters Association filed a lawsuit on Dec. 7, after submitting comments against the ordinance in August.
According to Costlow, her group’s biggest problem with the command is that it treats federal licensees the same way it treats federal contractors. Federal contractors can renegotiate their contracts to pass some of the additional labor costs onto the government, he notes, while licensees simply pay the federal government the right to operate on federal lands. – no negotiations take place.
Rocky Mountain Adventures, a Fort Collins-based member of Colorado River Outfitters, already pays their guides $ 15 an hour, but business manager and co-owner Kyle Johnson says he supports the lawsuit because he believes the order does not is not fair to licensees.
To understand the difference between how the order affects licensees and federal contractors, he points to corporate customers. For federal contractors, the customer is the government. For those on leave, the client is an individual. While Johnson says he appreciates the permits that allow his company to conduct rafting trips on federal lands and rivers, those permits do not tie the government to the additional costs his company might have to incur.
As he understands the decree, he adds, any company with which its business contracts will also be subject to the new salary requirements. This limits his options for hiring janitorial or landscaping services.
His company raised the minimum wage to $ 15 an hour because it was the right thing to do given the cost of living on the Front Range, Johnson says, but it also affected the company and its employees. unexpected way. Rocky Mountain Adventures cut their employees’ hours of work, which they weren’t happy with because they wanted to work as much as possible during the roughly 100-day season, he notes. He stopped offering overnight tours and even day trips on the Powder River due to those limited guide hours.
The company had to increase its prices by around 10% in 2021 and will increase prices by another 10% in 2022 to account for costs increased by inflation. This could reduce the number of customers when the business is already going through difficult times. Last year “has been very difficult,” Johnson says. “It’s hard to raise prices and employee compensation while having a terrible year and trying to keep the lights on as a small business. And all of these pressures came at the same time, at a rapid pace with one another. ”
Under Biden’s executive order, Costlow notes that other rafting companies will also face the dilemma of how to cover the increase in wages while keeping prices affordable. He estimates that 600,000 people use the services of members of the Colorado River Outfitters Association each year; if that number decreases, jobs could be lost. “The reality is, are a customer going to pay that kind of cost?” He asks. “I do not think so.”
In addition to asserting that it is not fair to treat federal licensees like contractors, the lawsuit argues that order-in-council wage fixing is not the right way to bring about change, and could even be illegal. Costlow points out that Congress has tabled minimum wage talks as a sign that executive power is crossing the line. If Congress passed pay increases, he said, members of Colorado River Outfitters would comply.
“It’s called democracy,” notes Costlow. “If I don’t like a decision made by my rep, I might not have a ton of influence, but I can at least vote against their re-election. But if a bureaucrat does it, I don’t have a say. These bureaucrats can change between administrations, he adds, subjecting the industry to different whims. Costlow would like to see a specific definition of federal licensees and how they are governed become law.
“We didn’t come into the rafting industry to be linked to politics,” says Johnson. “If we were a defense contractor, then part of this industry is taking care of it. What is most important to me as a business owner is not to be exposed to the political pendulum every four to eight years.
The Ministry of Labor has yet to respond to the complaint; when it does, says Costlow, the plaintiffs will determine their next steps. “This is our chance to say that it was not done in a legal way, and we would like you, sir or madam, to determine whether this is true or not,” he concludes.