THE OKLAHOMA BAR JOURNAL 40 | AUGUST 2025 cannot enact rules that “replace or swallow” the meaning of the terms used in the statute, which focus on the functions or duties in determining an employee’s exempt status.75 Applying this analysis to the minimum salary level, the court found that the use of the new minimum salary level would yield different results than the characteristics Congress chose – in other words, the minimum salary level was not defining and delimiting the exemption but was replacing the original statutory terms related to functions or duties.76 “The Department’s authority to define and delimit the EAP Exemption’s terms through the addition of a proxy characteristic like salary, which is not included in the statutory text, ‘is not unbounded.’”77 The court found that the minimum salary level had swallowed or replaced the statutory test of functions or duties, replacing these with a proxy that “frequently yields different results than the characteristic Congress initially chose.”78 To support its decision that the minimum salary level had swallowed the functions or duties test, the court reviewed the DOL’s historical approach to the salary level. Historically, the minimum salary test, since 1958, had been set so “no more than about 10 percent of those in the lowest-wage region [the South], or in the smallest size establishment group, or in the smallest sized city group or in the lowest-wage industry of each of the [industry] categories would fail to meet the test.”79 This would become known as the Kantor Method.80 The idea was that the minimum salary level should not disqualify more than 10% of EAPexempt employees as determined by the long duties test. However, in 2004, the DOL moved away from the Kantor Method and only adopted some of the factors set forth in the method. The 2004 rule selected a minimum salary level based on a wage distribution of all salaried employees rather than a distribution of exempt employees, and it accounted for some factors, such as region and industry, but not all four factors used under the Kantor Method. Most importantly, in 2004, it moved the percentage of those disqualified from 10% to 20%. Interestingly, in 2004, the DOL considered and rejected the possibility that the minimum salary level could be automatically adjusted without going through the rulemaking process, stating that the department found “nothing in the legislative or regulatory history [of the FLSA] that would support indexing or automatic increases.”81 In 2016, the DOL attempted to move to a single test structure, away from the long and short test, and increase the minimum salary level, moving the percentile from 20% to 40% of the weekly earnings of full-time, salaried workers in the South and implementing a mechanism to automatically update the salary level triennially.82 Thus, the DOL only used one of the Kantor Method’s four-part test, focusing solely on the lowest-wage census region, the South. Thus, the 2016 rule did not consider the smallest-sized business establishment, the smallest-sized city group or the lowest-wage industry, as used in the earlier rulemaking.83 The court noted that the 2016 rule went beyond the DOL’s statutory authority and reflected a substantive change that only Congress could effectuate and had been stricken by the courts in Nevada I and Nevada II.84 The Nevada II court held that the DOL Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff. Companies benefit from certainty and the ability to implement long-term strategic planning. Loper Bright injects uncertainty, which comes with the inability of a company to financially forecast and implement long-term staffing and resource allocation, which could lead to wage uncertainty and potential job and market instability.
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