Skip to Main Content

Keeping you informed

U.S. Labor Department Says Highly Compensated Paralegals Meet Overtime Exemption Test

    Client Alerts
  • July 17, 2019

The U.S. Department of Labor’s new Wage and Hour Administrator Cheryl Stanton recently released her first series of opinion letters on various wage payment topics. Of interest to some employers was a letter asking about overtime status for paralegals working for an international trade organization. For years, most paralegals working for law firms or corporations have been considered non-exempt, meaning that they are entitled to overtime pay.

The paralegals in the opinion letter request are a little different. First, they are highly compensated, making at least $100,000 per year. Second, according to the employer, the paralegals have some administrative duties such as assisting with budgeting. According to DOL, these side duties are enough for the paralegals to meet the highly compensated employee overtime exemption. This test says that employees making more than $100,000 are exempt from overtime requirements if they satisfy at least one part of the executive, administrative, or professional exemptions. In this case, DOL concluded that if the administrative duties are regular, they meet this requirement even if they are not the job’s primary duty.

This opinion reflects a relaxed standard for meeting the highly compensated overtime test. Most employees at this pay level should have regular tasks that fall within one of the white collar overtime exemptions. DOL has proposed raising the highly compensated pay level to about $150,000. While this change would exclude many current workers from claiming the exemption, those that continue to meet the salary minimum can likely be classified as exempt.