Fifth Circuit affirms DOL’s right to set salary minimum for white collar exemptions
In 2019, DOL published a final rule increasing the minimum salary needed to qualify for the majority of EAP exemptions. The salary was raised from $455 to $684. In 2024, DOL published a final rule increasing the minimum salary from $455 per week to $684 per week, effective July 1, 2024. The rule also increased it to $1,128 by January 1, 2025. The district court granted DOL’s motion for summary judgment, and Mayfield appealed. The district court granted DOL’s motion for summary judgment, and Mayfield appealed.
After noting that its own precedent did not answer the question before it and that the “major questions” doctrine did not apply, the Court turned its eyes to the Supreme Court’s July 2024 opinion in Loper Bright Enterprises v. Raimondo and noted that “where, as here, Congress has clearly delegated discretionary authority to an agency, we discharge our duty by ‘independently interpret
the statute and effectuat
the will of Congress subject to constitutional limits.'” Because of Congress’s “uncontroverted, explicit delegation of authority” to DOL to “define” and “delimit” the EAP exemptions, the question for the Court is whether the 2019 rule is within the outer boundaries of that delegation.
Mayfield’s argument, at its core, is that any definition of the EAP exemptions based on a characteristic other than job duties would exceed DOL’s delegated authority. The Court disagreed, noting that “the terms in the EAP [ing]xemption[ing], particularly ‘executive,’ connote a particular status or level for which salary may be a reasonable proxy.” The Court also noted that the EAP exemptions are frequently referred to as the “white collar” exemptions, a characterization that assumes a certain level of salary.
The Court noted that DOL’s authority was not unbounded:[e]Using salary as a proxy for EAP status is a permissible choice because … the link between the job duties identified and salary is strong. It does not follow, however, the use of a substitute characteristic will always be an acceptable exercise of the power of definition and delimitation. This is not the case here. That is not the case here.[s]The Court’s language leaves open the question of whether an increase in the minimum salary for exemption that is more drastic than that in the 2019 rule–such as the increase to $1,128 in 2025–is within or outside permissible bounds of “defining” and “delimiting.” That question will have to be answered another day.
In conclusion, the Court noted that DOL has consistently issued minimum salary rules for more than 80 years; that it began doing so immediately after the FLSA was passed in 1938; that Congress has amended the FLSA numerous times without modifying, foreclosing, or otherwise questioning DOL’s authority to set a minimum salary for exemption (suggesting “legislative acquiescence”); and that four other federal courts of appeal have recognized the DOL’s authority to promulgate minimum salary rules (albeit only once in the last 77 years).
Mayfield was viewed by practitioners as the primary “live” battleground for the issue of whether DOL has authority to set a minimum salary level for the EAP exemptions. In June, a Texas District Court enjoined 2024 minimum salary rule for the employer only. The broader battle will now have to be taken up on appeal to the Supreme Court or in another case.
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