FLSA2019-8 — Application of the highly compensated employee exemption to paralegals employed by a trade organization

U.S. Department of Labor Wage and Hour Division
Washington, DC 20210

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FLSA2019-8
July 1, 2019
Dear Name*:
This letter responds to your request for an opinion regarding whether a trade organization’s
paralegals are exempt from minimum wage and overtime requirements under Section 13(a)(1) of
the Fair Labor Standards Act (FLSA). This opinion is based exclusively on the facts you have
presented. You represent that you do not seek this opinion for any party that the Wage and Hour
Division (WHD) is currently investigating or for use in any litigation that commenced prior to
your request.
BACKGROUND
You inquire on behalf of a global trade organization that employs one or more paralegals.
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You
represent that these paralegals engage in non-manual work and receive an annual salary of at
least $100,000, which includes at least $455 per week paid on a salary or fee basis. You further
represent that these paralegals, among other duties: keep and maintain records; prepare and
distribute notices; prepare and submit music licensing and annual state registration reports; assist
the finance department with bank account matters; assist with trademark submissions and
renewals; assist with real estate matters; maintain the legal department budget; assist with annual
audits; help to form new entities and maintain existing entities; prepare legal department training
seminars; liaise between in-house and outside counsel; and notarize documents.

GENERAL LEGAL PRINCIPLES
FLSA Section 13(a)(1) exempts any employee employed in a bona fide executive,
administrative, or professional capacity from minimum wage and overtime pay requirements.
See 29 U.S.C. § 213(a)(1). To determine the scope of an exemption, WHD gives the statutory
text a “fair (rather than a narrow) interpretation” because the FLSA’s exemptions are “as much a
part of the FLSA’s purpose as the [minimum wage and] overtime-pay requirement[s].” Encino
Motorcars, LLC v. Navarro, 138 S. Ct. 1134, 1142 (2018) (internal quotation marks and citation
omitted).
An employee qualifies for the administrative exemption if: (1) the employee is “compensated on
a salary or fee basis at a rate of not less than $455 per week”;
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(2) the employee’s “primary duty”

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It is not clear whether the organization employs only one paralegal or more than one. For purposes of
this letter, we have used the plural.
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The Department of Labor is undertaking rulemaking to revise the regulations in 29 C.F.R. part 541 that
govern
the FLSA’s minimum wage and overtime exemption for executive, administrative, and
professional employees. Until the Department issues its final rule, it will enforce the part 541 regulations

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is “office or non-manual work directly related to the management or general business operations
of the employer or the employer’s customers”; and (3) the employee’s “primary duty includes
the exercise of discretion and independent judgment with respect to matters of significance.”
29 C.F.R. § 541.200(a) ( 2016).
An employee qualifies for the highly compensated exemption 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;
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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.” 29 C.F.R. § 541.601. To satisfy the third prong, the employee need
only perform one or more exempt duties more than occasionally. 29 C.F.R. § 541.701 (noting
that the duty’s “frequency ... may be less than constant”). An exempt duty is more than
occasional if it is performed normally and recurrently every workweek, but not if it is an isolated
or one-time task. See id. Additionally, this exempt duty need not be the employee’s “primary
duty.” See 29 C.F.R. § 541.601(a)(2); Smith v. Ochsner Health Sys., 353 F. Supp. 3d 483, 498
(E.D. La. 2018).
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.” 29 C.F.R. § 541.601(c); see Hicks v. Mercedes-Benz U.S. Int’l, Inc., No.
7:08-cv-0536-LSC, 2012 WL 1566140, at *6 (N.D. Ala. Apr. 30, 2012) (“[T]he need to examine
job duties is considerably relaxed for the highly compensated exemption ....”); see also Smith,
353 F. Supp. 3d at 497–98 (“[C]ourts, in a pre-Encino world, applied the exemptions narrowly
against the employer ... and ignored the regulation’s directive to forego a rigorous analysis of
the employee’s job duties in light of the employee’s high compensation.”).
OPINION
The paralegals that you describe in your letter appear to satisfy the highly compensated
employee exemption. All of their duties are non-manual, and they receive total annual
compensation of at least $100,000. See 29 C.F.R. § 541.601. Additionally, as explained below,
they customarily and regularly perform at least one exempt duty of an administrative employee.
As noted above, an administrative employee’s work must be “office or non-manual work directly
related to the management or general business operations of the employer or the employer’s
customers.” 29 C.F.R. § 541.200(a)(2). WHD regulations give examples of such duties in an
illustrative list of “work in functional areas such as tax; finance; accounting; budgeting; auditing;
insurance; quality control; purchasing; procurement; advertising; marketing; research; safety and
health; personnel management; human resources; employee benefits; ... legal and regulatory
compliance; and similar activities.” 29 C.F.R. § 541.201(b). The paralegals that you describe
perform similar work. Your letter cites a litany of the paralegals’ job duties and

in effect on November 30, 2016, including the $455 per week standard salary level and $100,000 annual
compensation level for highly compensated employees.
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See supra note 2.

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responsibilities—including keeping and maintaining corporate and official records, assisting the
finance department with bank account matters, and budgeting—that are “directly related to
management or general business operations.” Id. As such, the paralegals perform at least one of
the duties of an exempt administrative employee. See 29 C.F.R. § 541.200(a)(2).
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Moreover,
based on your representation that these duties are among the paralegals’ “major duties and
responsibilities,” we conclude that the paralegals perform one or more of these exempt duties
“customarily and regularly”—that is, more than occasionally. 29 C.F.R. § 541.701. That is
enough to qualify as a highly compensated employee. 29 C.F.R. § 541.601(c) (eliminating, for
highly compensated employees, “a detailed analysis of the employee’s job duties”).
It is important to note that only one of the exempt paralegals’ duties must be of an executive,
administrative, or professional character, and customarily and regularly performed by the
paralegals—and that one duty does not need to be the paralegals’ primary duty. “This relaxed
standard applies because most of the water for the exemption is carried by the employee’s high
level of compensation.” Smith, 353 F. Supp. 3d at 498; see also Hicks, 2012 WL 1566140, at *6
(“[T]he need to examine job duties is considerably relaxed for the highly compensated
exemption; an employee need only perform one or more exempt duties customarily and
regularly.”) (emphasis in original). Here, at least one of the paralegals’ duties and
responsibilities is office or non-manual work directly related to the management or general
business operations of the employer or the employer’s customers (e.g., budgeting, auditing,
assisting with finance, and legal and regulatory compliance), and is customary and regular,
thereby satisfying the final element of the highly compensated employee exemption.
Accordingly, these paralegals are exempt under a “fair reading” of FLSA Section 13(a)(1),
Encino Motorcars, 138 S. Ct. at 1142, and under the regulations currently enforced by the
Department.
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We trust that this letter is responsive to your inquiry.
Sincerely,

Cheryl M. Stanton
Administrator

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Although prior opinion letters have concluded that certain paralegals, in particular factual
circumstances, do not qualify for the administrative exemption, these letters are distinguishable for two
reasons. First, most of these letters relied exclusively on a finding that the primary duty of the paralegals
in question did not include the exercise of discretion and independent judgment with respect to matters of
significance. See, e.g., WHD Opinion Letter, 2005 WL 3638473 (Dec. 16, 2005); WHD Opinion Letter,
1998 WL 852667 (Mar. 20, 1998). By contrast here, under the highly compensated employee exception,
this “discretion and independent judgment” element need not be satisfied. See 29 C.F.R. § 541.601(a)(2).
Second, the duties of the paralegals at issue here include a wide variety of administrative tasks for a trade
association that are clearly directly related to the management or general business operations of the
employer or the employer’s customers.
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Having found that these paralegals are exempt highly compensated employees, WHD will not separately
address whether they are exempt administrative employees.

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*Note: The actual name(s) was removed to protect privacy in accordance with 5 U.S.C.
§ 552(b)(7).