A heated legal debate unfolded in New Orleans as a U.S. appeals court weighed the U.S. Department of Labor’s authority to use salary as a determinant for overtime pay eligibility. The case, brought forward by Robert Mayfield, a fast-food franchise owner from Austin, Texas, challenges the longstanding practice of using workers’ salaries to determine if they qualify for overtime.
The three-judge panel of the 5th U.S. Circuit Court of Appeals wrestled with whether Congress had ever intended to allow the Labor Department to use salary as a proxy for managerial duties. Federal wage laws exempt employees with “executive, administrative, or professional” roles from overtime pay, and since 1938, the Labor Department has used a salary threshold to define this exemption. The threshold was raised last year by the Biden administration to about $58,600, potentially extending overtime pay to 4 million more workers.
Mayfield’s lawsuit, originally filed in 2022, argues that the Labor Department overstepped its authority when it raised the salary threshold to $35,500 in 2019. A lower court dismissed the case, siding with the Department of Labor’s broad interpretation of the Fair Labor Standards Act (FLSA), which allows the agency to “define and delimit” the overtime exemption.
During Wednesday’s arguments, the panel appeared divided. Judge Cory Wilson questioned the seemingly unchecked power of the Labor Department, while also acknowledging that Congress had long been aware of the salary test without moving to eliminate it. Judge Jennifer Walker Elrod pressed the Department of Justice’s Courtney Dixon on why the agency should be allowed to factor in salary when the FLSA focuses on job duties.
Both sides were asked whether the case should be sent back to the lower court to reconsider in light of a recent U.S. Supreme Court decision that limits federal agency powers. However, attorneys for both Mayfield and the Labor Department argued that a remand was unnecessary.
The court’s decision could have far-reaching implications for how overtime pay is determined across the United States. The case, titled Mayfield v. U.S. Department of Labor, remains a pivotal moment in the ongoing debate over workers’ rights and government regulation.
