A “Fair Reading” of the FLSA Exempts Paralegals From Overtime Pay

By Alyssa Levy

Should highly compensated paralegals (likely more experienced paralegals) receive overtime pay? The new DOL Wage and Hour Administrator, Cheryl Stanton, says paralegals earning at least $100,000 annually and performing certain duties are “exempt” employees. The Administrator’s guidance letter zeroed in on the paralegals’ duties to justify their exempt status as a “fair reading” of FLSA Section 13(a)(1).

The Administrator issued her first set of opinion letters on July 1, 2019, on a slew of questions posed by employers. Among the opinions, the Administrator offered guidance to a global trade organization on whether its paralegals are exempt from overtime requirements under Section 13(a)(1) of the FLSA.

FLSA Section 13(a)(1) exempts employees employed in a bona fide executive, administrative, or professional capacity from minimum wage and overtime pay requirements. In addition, an employee is exempt as a highly compensated employee if: (1) the employee’s “primary duty includes performing office or non-manual work”; (2) the employee receives total annual compensation of at least $100,000; and (3) the employee “customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee.”

The Administrator opined that the paralegals at issue satisfy the highly compensated employee exemption. All of their duties are non-manual, and they receive total annual compensation of at least $100,000. The paralegals also customarily and regularly perform at least one exempt duty of an administrative employee. Notably, only one of paralegals’ duties must be that of an exempt administrative employee, and need not be their primary duty.

In March 2019, the DOL proposed raising the highly compensated employee salary exemption threshold to $147,414. The DOL’s letter maintains that because “[a] high level of compensation is a strong indicator of an employee’s exempt status,” the highly compensated employee exemption “eliminate[s] the need for a detailed analysis of the employee’s job duties.” Raising the salary threshold would be in line with this school of thought. Regardless, an employee’s duties will still be given great consideration to justify “exempt” status.

Read the full guidance letter (FLSA 2019-8) here.