When it comes to complying with the federal Fair Labor Standards Act, many employers are familiar with the concept of overtime exemptions for certain employees—commonly referred to as “white-collar” exemptions. These exemptions cover executive, administrative, and professional roles as well as certain computer and outside sales employees.

But qualifying for these exemptions isn’t as simple as holding a job title. Employers must ensure compliance with a two-part test: First, the employee must earn a minimum salary; and second, they must perform specific duties related to their exemption category.

If an employee doesn’t meet both of these standards—salary and duties—they must be paid overtime regardless of their title or, in most cases, their salary.

While the federal minimum salary threshold now stands at $844 per week (equivalent to $43,888 annually), states such as California and New York have stricter requirements with higher thresholds.

Mayfield Decision

Recently, in Mayfield v. US Department of Labor, the US Court of Appeals for the Fifth Circuit addressed whether the Department of Labor has the authority to set a salary floor for these exemptions. The plaintiffs challenged the DOL’s ability to use salary as a factor, arguing that exemptions should focus solely on job duties.

However, the court ruled in favor of the DOL, confirming its authority to require...

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