State and local government minimum wage laws are not binding on the Federal Government and its component agencies since, under the preemption doctrine which originates from the Supremacy Clause of the Constitution, Federal law supersedes conflicting State law. (See U.S. Const. Art. VI. cl. 2.) This is the case when Federal employee pay rates are specifically fixed under Federal law (e.g., GS employees) and when Federal agencies are given discretion in setting rates of pay under Federal law.
In the case of a Federal employee pay system such as the GS pay system in which pay rates are fixed by statute, a statutory change would be needed to allow payment of a State or local minimum wage. There is no administrative authority under which OPM could allow State or local minimum wages to supersede GS statutory rates.
In the case of a Federal employee pay system under which the employing Federal agency has discretion in setting rates of pay, the agency may apply State and local minimum wages to covered employees as a matter of agency policy or through a collective bargaining agreement (where applicable). However, the agency should make it clear that employees are not actually covered by the State or local minimum wage law or any appeal mechanisms established under such a law.
OPM administers the Federal Wage System covering prevailing rate (blue collar) employees in multiple agencies. OPM administratively determines the pay schedules for these employees. OPM has issued regulations (based on a policy choice, not a statutory obligation) requiring payment of applicable State or local minimum wages to Federal Wage System employees. (See 5 CFR 532.205.) Under this regulation, the highest State or local minimum wage in effect in the local wage area is applied in setting wage schedule rates unless there is a higher FLSA minimum wage under Federal law. In other words, if there are multiple State or local minimum wages in effect in different jurisdictions encompassed within the same local wage area, the highest minimum wage will be used in setting wage schedule rates for the entire local wage area, if that minimum wage rate exceeds the FLSA minimum wage rate.
https://www.chcoc.gov/content/inapplicability-state-or-local-minimum-wage-federal-employees
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