Judge rejects employer’s argument that DOL’s FLSA salary test is illegal

Hearken to the article
3 min

This audio is auto-generated. Please tell us in case you have suggestions.

The U.S. Division of Labor has the authorized authority to make use of a “wage check” as a part of its Honest Labor Requirements Act laws when figuring out whether or not white-collar workers are exempt from the legislation’s extra time pay necessities, a federal decide held Sept. 20.

Decide Robert Pitman of the U.S. District Courtroom for the Western District of Texas issued a call granting abstract judgment to DOL in a swimsuit introduced by R.U.M. Enterprises, Inc., an Austin, Texas, operator of franchise eating places. The corporate sued the company difficult its 2019 remaining rule, which elevated the minimal wage threshold for extra time eligibility underneath the FLSA to $35,568 yearly.

In response to court docket paperwork, R.U.M.’s proprietor opposed the rule as a result of the corporate’s retailer managers and assistant managers carried out duties that might permit them to qualify for the FLSA’s extra time exemption for govt workers, however their pay fell under the up to date threshold.

The proprietor mentioned that the rule “requires him to both pay his managers increased salaries than he would like, or else demote a few of them right into a non-exempt position” and that, if the rule have been vacated, “he would cut back the salaries of his exempt managers in order that more cash can be out there to them within the type of efficiency bonuses.”

Additional, R.U.M. alleged that DOL lacks the statutory authority to undertake a wage check, arguing that the FLSA’s exemption for govt, administrative {and professional} workers applies no matter an worker’s wage stage.

However Pitman rejected the corporate’s claims, holding that the division’s salary-level laws meet the two-part framework for company deference articulated by the U.S. Supreme Courtroom in Chevron v. Pure Sources Protection Council. The wage check “shouldn’t be arbitrary, capricious, or manifestly opposite” to the FLSA’s statute, and so “the Courtroom should give the Division controlling weight in deciding decide EAP exemptions,” Pitman wrote.

The court docket additionally held that R.U.M. did not show that DOL’s wage check is foreclosed by canons of statutory development, such because the “main questions doctrine” cited by the Supreme Courtroom in its 2022 choice to uphold a keep of the Occupational Security and Well being Administration’s COVID-19 vaccine mandate.

The choice comes lower than one month after DOL printed one more proposed rule updating its FLSA extra time laws. That replace, which might elevate the annual minimal wage threshold for white-collar employees to $55,068, is at present topic to a 60-day public remark interval — and might quickly face its personal share of authorized battles.