The Fifth Circuit Court upheld the Department of Labor's (DOL) minimum salary requirement for white-collar exemptions under the Fair Labor Standards Act (FLSA). This decision affirms that employees must meet a certain salary threshold, in addition to their job duties, to qualify as exempt from overtime pay requirements. The court ruled that the DOL has the authority to set such salary requirements and that these regulations are consistent with the intent of the FLSA. This decision reinforces the salary basis test as a valid component of determining white-collar exemptions.
The 2024 DOL rule raised the minimum weekly salary to qualify for the EAP exemption from $684 per week to $844 per week, or the equivalent salary of $43,888 per year, on July 1, 2024. The rule then called for the minimum salary to increase to $1,128 per week, the equivalent of a $58,656 annual salary, on January 1, 2025. Under the rule, that threshold would increase every three years based on up-to-date wage data.
As Reported in the Bloomberg Law Daily Report, “Though the specific dollar value required has varied, DOL’s position that it has the authority to promulgate such a rule has been consistent. Furthermore, it began doing so immediately after the FLSA was passed,” Judge Jennifer Walker Elrod, a George W. Bush appointee, wrote for the court in the Wednesday decision. “And for those who subscribe to legislative acquiescence, Congress has amended the FLSA numerous times without modifying, foreclosing, or otherwise questioning the Minimum Salary Rule.”
The court also said that authority was not an unconstitutional delegation of power because Congress provided at least two principles to “guide and confine” the agency.
“Both the FLSA’s purpose and the text of the Exemption itself provide at least some guidance for how DOL can exercise its authority,” Elrod wrote. “Therefore, they are each independently sufficient to satisfy the nondelegation doctrine’s requirements.”
Robert Mayfield, a fast-food chain operator based in Austin, Texas, who sued over the Trump rule in August 2022, argued that the FLSA overtime exemption language only mentions a worker’s job duties, and that salary shouldn’t be considered as part of the analysis.
Mayfield’s attorney said he was disappointed with the decision to uphold “a clearly unconstitutional rule that goes beyond the powers Congress granted” to the agency.
“We will continue to fight for our client and the right of small business owners to operate their companies how they see fit, free from government intrusion,” said Frank Garrison of the Pacific Legal Foundation in an emailed statement.
The new rule is anticipated to impact over 4 million workers, so the US Supreme Court is expected to decide this case. NGCOA will continue to follow and provide updates as they become available. We recommend golf course owners and operators review your current staffing model and evaluate the implementation strategy should the new rule become effective on January 1, 2025.