Colorado River Outfitters Association Files Lawsuit Against Executive Order on Minimum Wage

Although Congress initiated a discussion on raising the minimum wage to $15 an hour, President Joe Biden had already issued an executive order that would raise the minimum wage for federal contractors to $15 — and fearing that the rising costs sink their business, the Colorado rafting companies sued to set aside part of that order.

Issued April 27, Biden’s order states that beginning 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 one issued in 2014, when Biden was vice president; Donald Trump changed that order 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 businesses whose businesses depend on federal permits and assets 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 numerous national parks across the country, including Yellowsone, the Grand Canyon and Rocky Mountain National Park. Xanterra, which is owned by billionaire Philip Anschutz, is one of the biggest companies under the order. Companies that operate ski resorts will also be affected; they operate primarily 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 Arkansas Valley Adventure, is suing the Department of Labor and the Biden administration, arguing for an exemption from the order for those authorized to work on federal land.

“As a community, we needed to come together and be on the same page and say, ‘No, this is detrimental to the industry,'” Costlow says. The Colorado River Outfitters Association filed the lawsuit Dec. 7, after submitting comments against the order in August.

According to Costlow, his group’s biggest problem with the order is that it treats federal licensees the same way it treats federal contractors. Federal contractors can renegotiate their contracts to shift some of the additional labor costs onto the government, he notes, while licensees simply pay the federal government for the right to operate on federal lands — none negotiation takes place.

Rocky Mountain Adventures, a member of Colorado River Outfitters based in Fort Collins, already pays its guides $15 an hour, but business manager and co-owner Kyle Johnson says he supports the lawsuit because he doesn’t think the order be fair to permittees.

To understand the difference between how the order affects federal licensees and contractors, he points the finger at business customers. For federal contractors, the client is the government. For permit holders, the client is an individual. While Johnson says he appreciates the permits that allow his company to run rafting trips on federal lands and rivers, those permits do not bind the government to additional costs his company may incur.

As he understands the order, he adds, any company with which his commercial contracts will also be subject to the new wage 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 in the Front Range, Johnson says, but it also affected the company and its employees. unexpectedly. Rocky Mountain Adventures cut employee hours, which they weren’t happy with because they wanted to work as much as possible during the roughly 100-day season, he notes. It has stopped offering overnight trips and even full day trips on the Poudre River due to these limited guide hours.

The company had to increase its prices by about 10% in 2021 and will increase them another 10% in 2022 to account for costs increased by inflation. This could reduce the number of customers when the company is already going through difficult times. Last year “was 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 those pressures came at once, in rapid fire with another .”

Under Biden’s executive order, Costlow notes that other rafting companies will also face the dilemma of how to cover the salary increase while keeping prices affordable. He estimates that 600,000 people use the services of Colorado River Outfitters Association members each year; if this number drops, jobs could disappear. “The reality is that a customer is going to pay that kind of cost?” he asks. “I do not think so.”

In addition to arguing that it’s not fair to treat federal licensees as contractors, the lawsuit argues that setting wages by decree is not the right way to make changes, and may even be illegal. . Costlow points out that Congress has tabled minimum wage talks as a sign that the executive branch is overriding. If Congress were to pass wage increases, he said, members of Colorado River Outfitters would comply.

“It’s called democracy,” Costlow notes. “If I don’t like a decision made by my representative, I may not have much influence, but I can at least vote no for his re-election. But if a bureaucrat does it, I have no say. These bureaucrats can change between jurisdictions, he adds, subjecting the industry to different whims. Costlow would like to see a precise definition of federal permissions and how they are governed that becomes law.

“We didn’t come into the rafting industry to be tied to politics,” says Johnson. “If we were a defense contractor, then part of that industry is doing it. What’s most important to me as a business owner is that I’m not exposed to the political pendulum every four to eight years.

The Department of Labor has yet to respond to the lawsuit; when that happens, Costlow says, the plaintiffs will determine their next steps. “This is our chance to say this was not done legally, and we’d like you, Mr. or Mrs. Judge, to determine whether or not that’s true,” he concludes.

Andrew B. Reiter