A recently enacted executive order requiring an increase in the minimum wage for federal contract workers has left local outfitting and rafting businesses scrambling as they try to figure out what the new rule means for their future.
Issued by President Biden on April 27, 2021, Executive Order 14026 took effect on January 30 and requires all new federal contracts to incorporate a minimum wage of $15 per hour for most employees and a minimum wage of $7.90 per hour for tipped workers. The ordinance also plans to raise the minimum wage each year and phase out the lower minimum wage for tipped workers by 2024.
For outfitters and guides who operate with permits to operate on federal lands, the new rule could force rate hikes that would skyrocket their prices.
While a statement released by the White House says the order is intended to “…promote economy and efficiency in federal contracting,” state policy organizations view the situation differently, and many are fighting the new rule.
“It’s a completely unrealizable situation that no one was asking for. For special use permit holders, we simply cannot comply with this. We would have to charge so much that no one would come on our trips anymore,” said Dusty Crary, president of the Montana Outfitters and Guides Association. “Right now, people are taking advantage of their federal lands. Kids can get great jobs and earn great tips while having fun. If they make us adhere to this new rule, it will shut us down.
A possible saving grace for outfitters and guides is that the new rule only applies to new or renewed contracts, meaning existing contracts would not be affected. While this is the case for many companies operating under 10-year forest service contracts, those whose contracts are up for renewal and new businesses would be the first to feel the financial burden.
According to Crary, the new minimum wage requirements will be most detrimental to companies offering multi-day trips, where guides would be on hand from the time they leave until the trip ends.
“The $15 an hour is the least of it. It’s the overtime demands that are going to hurt us,” he said. “On a seven-day trip, if I followed this rule to the letter, I would pay overtime on the third day and would have to change crew before the end of the trip when they reached 60 hours. This is not just not doable.” These are just good intentions without a lot of common sense and good thinking.”
While the White House says the new rule “…ensures that hundreds of thousands of workers no longer have to work full-time and still live in poverty,” Crary says that’s not the case for Montana outfitters and guides, many of whom he says do the job just for this one’s adventure.
“These are seasonal leisure jobs with young people. These are not people looking to make a career out of it and raise a family doing it. So why is this such a burning and important issue,” Crary said. “Most of these jobs last two or three months at most and are done by people in their twenties. They do it because they love the job, whether it’s rafting or backcountry trips. They know very well that there are going to be long hours.
THE ISSUE of a federal minimum wage for outfitters and guides dates back to the Obama administration and Executive Order 13658, signed in February 2014 and signed into law on January 1, 2015.
Quite similar to the new order, Obama’s Executive Order 13658 instituted a minimum wage for federal contract workers of $10.10 an hour.
Outfitters and guides successfully lobbied against the rule and won an exemption from the Trump administration with the issuance of Executive Order 13838 in May 2018. According to Trump’s order, “an increase in the minimum wage would generally result in significant negative effects on hours worked. by recreational service workers. Thus, the application of Executive Order 13658 to these service contracts does not promote economy and efficiency in the provision of these services to those who seek to profit from our federal lands.
While the decision to revoke Trump’s order was made by Biden last spring, Crary and other business owners say they were uninformed and knew nothing about the new rule until which the Colorado River Outfitters Association and Arkansas Valley Adventures are suing the federal government in December in an attempt to block the rule.
The groups argued that permits to operate on federal lands do not make them federal contractors providing services to the federal government, an argument that was rejected by a federal judge on January 29.
The lawsuit’s dismissal has left local businesses scrambling to figure out exactly what the new rule means for them.
“We are still doing our research on how this executive order will affect us, or if it even will. I don’t have a firm answer to this question at the moment. We are assessing the situation,” said Glacier Raft Company general manager Brandon Gonski. “It all depends on how the Department of Labor and the federal government define who is a government contractor and who is not.”
Whitefish Mountain Resort operates under a National Forest Service Special Use Permit, but resort officials do not believe the new rule will apply to their operations.
“Whitefish Mountain Resort is licensed to operate on National Forest Land. No federal agency has identified us as a contractor beholden to these kinds of rules,” public relations manager Chad Sokol said in an email Friday. “However, we are proud to pay all our employees a base salary of at least $15 an hour, with the exception of some who also receive tips or commissions.
Even the National Forest itself isn’t sure exactly what the new rule will mean for local businesses.
“At this time, the agency is still working with the Office of Personnel Management on the implementation of this executive order, so I don’t know what the effects will be on businesses operating on federal lands at this time,” he said. said Tamara MacKenzie, Public Affairs. Flathead National Forest Specialist.
While the White House press release indicates that the U.S. Department of Labor’s Wage and Hour Division and the Federal Procurement and Regulatory Council will engage in developing rules to implement and enforce executive order, Crary said he believes government entities will be reluctant to get involved in their law enforcement and that he and his colleagues will continue to fight the rule.
“This is all coming from the Department of Labor and I guess it will be up to them who complies with this new rule. If they start pressuring the Forest Service or the BLM or the National Park Service to enforce this , I feel like these entities don’t want to be in this fight,” he said. “Where it goes from here, I don’t know, but we need an exemption. The Department of Labor really needs to stop doing this. There hasn’t been an outcry for this and it really doesn’t solve anything. It’s just infuriating.