September 11, 2024, marked a significant day for labor and administrative law with the rulings in Mayfield v. Department of Labor and Loper Bright Enterprises v. Raimondo. These decisions not only reaffirm the U.S. Department of Labor’s (DOL) authority but also signal a profound shift in how federal regulations will be interpreted and enforced in the future. For employers, employees, and regulators, understanding these rulings is crucial as they reshape the legal landscape in the United States.
Mayfield v. Department of Labor centers on the DOL’s authority to set minimum salary thresholds for overtime exemptions under the Fair Labor Standards Act (FLSA). In 2019, the DOL increased the salary threshold for exemptions under the "executive, administrative, and professional" (EAP) categories from $455 to $684 per week. This marked the first increase since 2004. In 2024, the DOL further increased the threshold to $844 per week, effective July 1, 2024, with another increase to $1,128 per week starting January 1, 2025.
Mayfield, a small business owner, challenged this authority, arguing that the FLSA’s exemptions should be based solely on job duties, not salary levels. However, the Fifth Circuit upheld the DOL’s decision, reaffirming that Congress had indeed delegated the authority to the DOL to “define” and “delimit” the terms of the EAP exemptions, including setting a minimum salary threshold.
This ruling is significant for employers as it emphasizes the DOL’s ongoing role in shaping employment standards. Employers must remain vigilant in ensuring compliance with these thresholds to avoid legal and financial repercussions.
While Mayfield reaffirmed the DOL’s authority, Loper Bright Enterprises v. Raimondo marked a departure from nearly four decades of administrative law under the Chevron doctrine. The Supreme Court’s 6–3 decision in Loper Bright overruled the Chevron doctrine, which had allowed federal agencies considerable leeway in interpreting statutes in cases of ambiguity.
The Chevron doctrine, established in 1984, was a cornerstone of administrative law, granting agencies like the DOL broad authority to interpret ambiguous statutes, provided their interpretations were reasonable. However, the Supreme Court’s decision in Loper Bright now requires courts to independently interpret statutes, even in cases of ambiguity, without deferring to agency interpretations.
This ruling is poised to have wide-reaching effects, especially on labor and employment standards. Without Chevron deference, federal agencies, including the DOL, may face more frequent legal challenges, and courts will play a more active role in shaping the interpretation of labor laws.
The implications of these rulings are far-reaching for both employers and employees. While Mayfield supports the DOL’s ability to set salary thresholds, Loper Bright introduces a potential for increased judicial scrutiny of agency regulations. The removal of Chevron deference means that future DOL rules, such as the significant increase in salary thresholds scheduled for 2025, could face more challenges in the courts.
For employers, this creates both risks and opportunities. On one hand, the increased judicial scrutiny could lead to more uncertainty in compliance requirements, potentially complicating efforts to meet federal labor standards. On the other hand, it may also provide openings to challenge regulations that are viewed as overly burdensome or beyond the agency’s authority.
The Loper Bright ruling extends beyond labor law, signaling a broader shift in administrative law across various sectors. The removal of Chevron deference could lead to increased litigation as parties challenge existing regulations in environmental protections, financial regulations, and public health standards.
Before Chevron, differing interpretations of federal statutes by various appellate courts often led to regulatory uncertainty. The return to this pre-Chevron era could result in similar fragmentation, where different courts interpret the same statute differently, causing confusion for businesses operating across multiple jurisdictions.
This increased legal uncertainty means that companies will need to stay vigilant and adaptable as they navigate the evolving regulatory landscape.
As the legal landscape shifts, Onsi Group is here to help employers and businesses stay compliant with federal regulations. We offer comprehensive services, including compliance consulting, training, auditing, and monitoring, tailored to your needs. Our expertise in labor and employment standards ensures that you can navigate these changes with confidence.
Whether you need help understanding the implications of these rulings or want to stay ahead of future regulatory changes, Onsi Group provides the Peace of Mind you need. Contact us today to learn more about how we can support your compliance efforts.
The rulings in Mayfield v. Department of Labor and Loper Bright Enterprises v. Raimondo mark the beginning of a new era in administrative law. As federal regulations and agency authority come under increased scrutiny, the role of the judiciary in shaping public policy will be more pronounced. For employers and businesses, understanding these changes and their potential impacts is essential for staying compliant and avoiding legal pitfalls.
At Onsi Group, we are committed to helping you navigate this complex and evolving landscape. Stay informed, stay compliant, and reach out to us for the guidance and support you need.
- Hailey Soupiset & Joshua Hinckley