Guides and outfitters lament murky minimum wage rule

A newly-enacted executive order requiring an increased minimum wage for federal contract workers has left local outfitting and rafting companies scrambling as they try to determine what the new rule means for their future.

Issued by President Biden on April 27, 2021, Executive Order 14026 went into effect Jan. 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 order also includes plans to raise the minimum wage annually and phase out the lower minimum wage for tipped workers by 2024.

For outfitters and guides that operate with permits to conduct their business on federal land, the new rule could force rate hikes that would drive their prices to skyrocket.

While a statement released by the White House says the order is intended to “...promote economy and efficiency in federal contracting,” state guiding organizations are seeing the situation differently and many are fighting the new rule.

“It’s a completely unworkable situation that nobody was asking for. For special-use permit holders, we just can’t comply with this. We would have to charge so much that nobody would come on our trips anymore,” Montana Outfitters and Guides Association President Dusty Crary said. “Right now, people are enjoying their federal lands. The kids are able to get great jobs and earn great tips while having a great time. If they make us adhere to this new rule, it is going to shut us down.”

One possible saving grace for outfitters and guides is that the new rule only applies to new contracts or those being renewed, meaning existing contracts would be unaffected. While this will be the case for many businesses operating under 10-year Forest Service contracts, those whose contracts are up for renewal and new business would be the first to feel the financial burden.

According to Crary, the new minimum wage requirements will be most hurtful to companies offering trips lasting multiple days, where guides would be on the clock from the moment they leave until the trip is concluded.

“The $15 an hour is the least of it. It’s the overtime requirements that are going to hurt us,” he said. “On a seven-day pack trip, if I were to follow this rule to the letter, I would be paying overtime wages on day three and I would have to switch crews before the trip was over when they hit 60 hours. That’s just not feasible. “This is all good intentions without a lot of good sense and good thought.”

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 is not the case with Montana’s outfitters and guides, many of which he says do the work just for the adventure of it.

“These are seasonal recreation jobs with young people. These are not people looking to make a career of it and raise a family doing this. So, why is it such a burning and important issue,” Crary said. “Most of these jobs are two or three months at the most being done by people in their 20s. They do it because they enjoy this work, whether it is rafting trips or backcountry trips. They know fully well there are going to be some long hours.”

THE ISSUE of a federal minimum wage for outfitters and guides stems back to the Obama administration and Executive Order 13658, signed in Feb. 2014 and enacted Jan. 1, 2015.

Quite similar to the new order, Obama’s Executive Order 13658 instituted a minimum wage for federal contract workers of $10.10 per hour.

Outfitters and guides were able to successfully lobby against the rule and were granted an exemption by the Trump administration with the issue of Executive Order 13838 in May 2018. According to Trump’s order, “A minimum wage increase would generally entail large negative effects on hours worked by recreational service workers. Thus, applying Executive Order 13658 to these service contracts does not promote economy and efficiency in making these services available to those who seek to enjoy our Federal lands.”

While the decision to repeal Trump’s order was issued by Biden last spring, Crary and other business owners say they were not informed and knew nothing about the new rule until Colorado River Outfitters Association and Arkansas Valley Adventures sued the federal government in December in an attempt to block the rule.

The groups argued that permits to operate on federal lands don't make them federal contractors offering services to the federal government, an argument that was rejected by a federal judge on Jan. 29.

The dismissal of the lawsuit left local companies scrambling to determine exactly what the new rule means for them.

“We are still doing our research into how that executive order will affect us, or if it even will. I don’t have a firm answer to that question right now. We are evaluating the situation,” Glacier Raft Company General Manager Brandon Gonski said. “It’s all about how the Department of Labor and the federal government defines who is a government contractor and who is not.”

Whitefish Mountain Resort operates under a special-use permit from the National Forest Service, but resort officials do not believe the new rule will apply to their operations.

“Whitefish Mountain Resort has a permit to operate on national forestland. No federal agency has identified us as a contractor beholden to these types of rules,” Public Relations Manager Chad Sokol said in an email Friday. “Regardless, we're proud to pay all our employees a base wage of at least $15 an hour, except for some who also receive tips or commissions.”

Even the National Forest itself is unclear 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 am unsure what the effects will be to businesses operating on federal lands at this time,” said Tamara MacKenzie, Public Affairs Specialist with Flathead National Forest.

While the White House press release states the U.S. Department of Labor’s Wage and Hour Division and the Federal Acquisition and Regulatory Council will engage in rulemaking to implement and enforce the executive order, Crary said he believes that government entities will be wary of getting involved with their enforcement and that he and his colleagues will continue to fight against the rule.

“This is all coming from the Department of Labor and I guess it will be up to them to see who is complying with this new rule. If they start putting pressure on the Forest Service, BLM or National Park Service to enforce this, I get the feeling those 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 quit doing this. There was no outcry for this and it really doesn’t fix anything. It’s just maddening.”