New ruling may help 2024 overtime rule survive legal challenges
The 5th Circuit’s ruling yesterday in Mayfield v US Department of Labor will likely help the 2024 overtime rule survive the lawsuits challenging it.
Published: September 12, 2024 | by Michael Cardman, Senior Legal Editor at Brightmine
The U.S. Department of Labor (DOL) has the authority to set a minimum salary level for Fair Labor Standards Act (FLSA) overtime exemptions, the 5th Circuit Court of Appeals has ruled.
While the 5th Circuit’s ruling yesterday in Mayfield v US Department of Labor involved a challenge to the Trump administration’s 2020 overtime rule (which raised the minimum salary for most FLSA overtime exemptions to $35,568 per year), it will likely help the Biden administration’s 2024 overtime rule (which raised the minimum salary to $43,888 on July 1 and will raise it again to $58,656 on January 1, 2025) to survive the legal challenges before it.
At least three lawsuits have been filed seeking to overturn the 2024 overtime rule, one by the state of Texas, one by a coalition of business interests and another by a software development and marketing firm. All three of them questioned whether the DOL has the authority to set any minimum salary level, let alone to raise it as high as $58,656. All three also cited the Mayfield case, which was ongoing at the time they were filed.
Although the 5th Circuit — whose rulings set binding precedent over the district courts where the lawsuits were filed — has upheld the DOL’s authority to set a minimum salary level, the 2024 rule still could be overturned on other grounds. Even if precedent requires the lower courts to uphold the DOL’s general statutory authority to add a minimum salary requirement, a district court still could overturn the 2024 rule’s specific minimum salary levels because they are so high that the exemptions’ duties tests become irrelevant or because they are “arbitrary and capricious.”
The DOL’s power to set salary levels “is not unbounded,” the 5th Circuit noted.
The Mayfield plaintiffs may ask the 5th Circuit to rehear their case and/or appeal to the Supreme Court. In the meantime, employers have more reason to prepare for the January 1 salary increase.
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About the author
Michael Cardman
Senior Legal Editor, Brightmine
Michael Cardman has more than 20 years of experience in publishing and has specialized in employment law for more than 15 years. As a member of the Brightmine editorial team, he focuses on wage and hour compliance, including minimum wage, overtime, employee classification, hours worked, independent contractors and child labor.
Michael holds a Bachelor of Arts degree in English from the University of Virginia. Prior to joining Brightmine, he was the managing editor for Thompson Publishing Group’s library of HR publications. In this role, he was responsible for overseeing books, manuals and online tools covering a variety of topics such as wage and hour, employee leaves, employee benefits and compensation.
Connect with Michael on LinkedIn.