DOL Opinion Letter Applies the Highly Compensated Employee Exemption to Paralegals

From Ogletree Deakins Nash Smoak & Stewart PC:

In July 2019, the U.S. Department of Labor’s Wage and Hour Division (WHD) issued Opinion Letter FLSA2019-8 addressing whether paralegals are exempt from minimum wage and overtime requirements under Section 13(a)(1) of the Fair Labor Standards Act (FLSA). Previously, in opinion letters issued in 1998 and 2005, the WHD had concluded that certain paralegals did not qualify for the administrative exemption mainly because they had not exercised “discretion and independent judgment” with respect to matters of significance—an essential element of the FLSA’s exemption for administrative employees. Unlike the 1998 and 2005 opinion letters, the paralegals at issue in the July 2019 opinion letter made more than $100,000 per year and, as a result, potentially qualified for the highly compensated employee exemption.

Ultimately, the WHD concluded that the paralegals described in the July 2019 opinion letter qualified as exempt under the highly compensated employee exemption even if they did not exercise discretion and independent judgment with respect to matters of significance. This opinion letter shows how the highly compensated employee exemption interacts with the more common white-collar exemptions, such as the executive, administrative, and professional exemptions, and could be useful guidance for employers considering the classification of employees earning more than $100,000 per year in compensation.

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