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The Practical Employer

Is the Labor Department’s White-Collar Salary Test DOA?

The ball is now in the hands of the appeals court.
Late last week, a federal judge in Texas struck down the Department of Labor’s attempt to raise the salary test for the Fair Labor Standards Act’s white-collar exemptions from $455 per week to $913 per week.

The court held that because the statute defines the administrative, executive, and professional exemptions based on their duties, any salary test that renders the duties irrelevant to the analysis is invalid. Thus, because the Obama-era $913 salary test could overshadow the exemption’s duties in the execution of the exemptions, the new salary level is invalid.

I found footnotes 5 and 6 to be very interesting, but I’m not sure the position they advance are intellectually consistent with the bulk of the opinion.

Compare:

This opinion is not making any assessments regarding the general lawfulness of the salary-level test or the Department’s authority to implement such a test. Instead, the Court is evaluating only the salary-level test as amended by the Department’s Final Rule. … During questioning at the preliminary injunction hearing, the Court suggested it would be permissible if the Department adjusted the 2004 salary level for inflation. [fns. 5 and 6]

-vs-

The Final Rule more than doubles the previous minimum salary level. By raising the salary level in this manner, the Department effectively eliminates a consideration of whether an employee performs “bona fide executive, administrative, or professional capacity” duties. … Nothing in Section 213(a)(1) allows the Department to make salary rather than an employee’s duties determinative of whether a “bona fide executive, administrative, or professional capacity” employee should be exempt from overtime pay. [opinion]

The only way to read the opinion is that any salary test exceeds the DOL’s authority to implement the EAP exemptions (footnotes 5 and 6 notwithstanding). Alternatively, if the only salary test that will pass muster is one that is so low that anyone who meets the duties test also must, de facto, meet the minimum salary threshold (the status quo of $455, adjusted for inflation to $592), why have a salary test at all?

Thus, in my opinion, the DOL’s salary test is DOA. Now, let’s wait for the appeal and see what the court of appeals has to say on this issue.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.