GOP: Obama pay hikes for federal contractors threaten closure of military base facilities

House Republicans say three separate Obama administration moves to increase the pay of federal contractors threaten to close such military-base support services as fast-food restaurants, gyms and day-care centers and they are asking for an exemption.

The 40 lawmakers appealed to Labor Secretary Thomas Perez in an April 10 letter in which they say decisions last year by the agency to increase worker pay under the Service Contract Act and President Obama’s executive order in February to hike the hourly wage for federal contractors could result in closures.

They also argue the increases and potential, subsequent closures will result in fewer jobs for spouses and other military-family members and come amid recent budget cuts for military facilities.

“Given the vital role these programs play in the lives of our service members and families, we seek to ensure they continue to have access to the services provided by federal contractors at military exchanges,” they write in their letter to Perez.

Obama signed an executive order in February that mandates an automatic increase in the hourly minimum wage for federal contract workers starting next year.

The hourly increase -- from $7.25 to $10.10 -- will go to employees working on new federal contracts and subcontracts beginning on or after January 1, 2015.

“Vital services offered on military installations should not be placed in limbo because of a unilateral decision implemented by the administration,” says South Carolina GOP Rep. Joe Wilson, a House Armed Services subcommittee chairman, who also signed the letter.

“In light of recent spending reductions targeted towards military installations, now is not the time to reduce support service. …Additionally, this government mandate threatens to destroy jobs at a time when American workers need them most.”

In June 2013, the Labor Department decided on two increases.

The first was to issue new pay “determinations” for fast-food workers on government contracts, after determining they were receiving substandard wages.

In looking at the issue, the department decided those workers also were entitled to the same “fringe benefits” as all workers covered by the Service Contract Act.

They have been given the fringe benefit, now at $3.81 an hour.

However, the pay increase is subject to re-consideration and is being reviewed at the request of the Defense Department, a Labor Department spokesperson told on Monday.

The support services are known in military parlance as Moral, Welfare and Recreation services and can include movie theaters and gyms, in addition to restaurants.

Such closures are already underway, according to a story posted Friday by

The online publication says McDonald’s restaurants have already closed on three Navy bases and another is scheduled to close at a Marine Corps base, as a result of the Labor Department’s $3.81-an-hour increase, which combined with Obama’s increase would bring federal contract workers pay to $13.91.

In addition, the publication cites an April 8 letter to the Labor Department from Russell Beland, deputy assistant secretary of the Navy for military manpower and personnel.

Beland argues that roughly 390 fast-food operations would close on installations across the United States and its territories, resulting in the loss of jobs for nearly 5,750 employees, without exemption from the wage regulations.

Beland did not respond Monday to a request for a copy of the letter.