© 2025 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2025 ed. | 57 also contemplated another increase – to $1,128.00 per week ($58,656 annually) – six months later on January 1, 2025.311 The rule also provided for automatic updating every three years.312 Soon after its publication, the DOL’s 2024 Final Rule was the subject of multiple court challenges. As of July 1, 2024, the Final Rule remained in place, and the initial increase contemplated by the rule went into effect. However, on November 14, 2024, a federal court in Texas “set aside and vacated” the entirety of the 2024 Final Rule, including the portion that had gone into effect in July 2024.313 The court found that the DOL had exceeded its rule making authority by imposing the new salary requirements, finding “a salary test cannot displace the duties test” for exempt employees.314 The court further made clear that its ruling had nationwide effect.315 The DOL appealed the decision to the Fifth Circuit, and the matter remains pending as of the date of this publication. While the current salary minimum remains in flux, if an employee makes less than the minimum salary amount, the employee generally cannot qualify as exempt even if he or she meets the other requirements for a white-collar exemption. If the employee’s salary meets or exceeds this threshold, the employee is exempt only if he or she also meets the salary basis test requirements and the duties requirements of one of the white-collar exemptions. 2. Salary Basis Test An employee is paid on a salary basis if in every pay period the employee receives “a predetermined amount constituting all or part of the employee’s compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed.”316 Subject to the exceptions listed below, an exempt employee must receive his or her full salary for any week in which the employee performs any work, regardless of the number of days or hours worked.317 An employer does not need to pay an employee for any week in which the employee performs no work. In addition, an employer is not required to pay an exempt employee’s full 311 Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees, 89 Fed. Reg. at 32,851. 312 Id. at 32,855-57. 313 See State of Texas v. U.S. Dep’t of Labor, 756 F. Supp. 3d 361, 399- (E.D. Tex. 2024). 314 Id. at *19. 315 Id. at *25-26. 316 29 C.F.R. § 541.602(a); see Helix Energy Sols. Grp., Inc. v. Hewitt, 598 U.S. 39, 51 (2023) (“Whenever an employee works at all in a week, he must get his ‘full salary for [that] week’”) (quoting 29 C.F.R. § 541.602(a)). 317 29 C.F.R. § 541.604(a). The First Circuit held that employees were paid on a salary basis even though they were paid under a compensation scheme where “their earnings equaled the number of hours they billed to clients multiplied by an hourly rate between $40 and $60” because they were guaranteed a minimum weekly salary of $1,000, regardless of hours billed. Litz v. Saint Consulting Grp. Inc., 772 F.3d 1, 2-5 (1st Cir. 2014). The plaintiffs argued that this did not constitute payment on a salary basis, citing language on paystubs and several communications from the employer implying that a circumstance could arise where the guarantee would not have been paid. Id. at 4-5. The First Circuit held that this argument “simply ignores the economic reality of the guarantee . . . . The fact that the [actual] pay was usually—but not always—high enough to render the guaranteed stipend unnecessary hardly means that the guarantee was not part of the employee’s compensation.” Id. at 5.
RkJQdWJsaXNoZXIy OTkwMTQ4