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Upholding authority: The DOL’s minimum salary requirement and its implications for labor standards

10/7/24

By: Arielle E. Katz

In Mayfield and R.U.M. Enterprises, Inc. v. U.S. Dep’t of Labor, a Fifth Circuit Court of Appeals decision issued on September 11, 2024, the central issue was the Department of Labor’s (“DOL”) authority to establish a minimum salary requirement under the White-Collar Exemption of the Fair Labor Standards Act (“FLSA”). This exemption has historically included a salary criterion to determine which employees qualify for exemption from certain wage and hour provisions. Robert Mayfield, a Texas small-business owner, challenged the DOL’s 2019 update that raised the minimum salary threshold from $455 to $684 per week, arguing that the DOL exceeded its statutory authority and violated the nondelegation doctrine by imposing a salary requirement. 

The district court ruled that the DOL acted within its rights to define the exemption and set salary levels as part of its authority to delineate the terms of the exemption. It found that Mayfield’s argument was not supported by precedent, particularly distinguishing the case from Wirtz v. Mississippi Publishers Corp., which addressed whether the Minimum Salary Rule was arbitrary and capricious, rather than whether it exceeded the DOL’s statutory authority. The court also determined that the major questions doctrine did not apply, noting that the economic impact of the rule, estimated at around $472 million, was modest compared to previous cases that invoked this doctrine. 

Moreover, the court highlighted that while labor relations are politically significant, the specific issue of using salary levels to determine employee exemptions did not meet the threshold for invoking the major questions doctrine. The court pointed out that DOL had consistently asserted its authority to implement salary rules since the FLSA’s inception, which undermined Mayfield’s claim that the DOL was overreaching. 

On the question of Skidmore¹ deference, the court recognized that while the DOL’s interpretation of its statutory authority is not the sole determining factor, it has issued minimum salary rules for over eighty years, reinforcing its consistent position on this authority. The court also noted that Congress had amended the FLSA multiple times without directly contesting the DOL’s authority to set a minimum salary requirement. 

Finally, addressing Mayfield’s nondelegation argument, the court found that the FLSA provides intelligible principles guiding the DOL’s authority, specifically the act’s goal of eliminating substandard labor conditions. It concluded that the DOL’s actions were consistent with both the purpose of the FLSA and the text of the exemption itself. Consequently, the court affirmed the DOL’s authority to define and delimit the terms of the EAP Exemption through the Minimum Salary Rule, ultimately ruling in favor of the DOL and denying Mayfield’s motion for summary judgment. 

The significance of Mayfield and R.U.M. Enterprises, Inc. v. U.S. Dep’t of Labor lies in its affirmation of the DOL’s authority to set salary thresholds under the FLSA’s White Collar Exemption, shaping the landscape of wage and hour regulations for millions of workers. This case underscores the balance between agency discretion and statutory limits, illustrating how regulatory interpretations can evolve while ensuring protections for employees against substandard labor practices. Its outcome reinforces the role of federal agencies in adapting labor standards to contemporary economic conditions. 

For more information, please contact Arielle Katz at arielle.katz@fmglaw.com or your local FMG attorney.

1. Skidmore v. Swift & Co., 323 U.S. 134 (1944).  ↩︎