Because the salary-basis test is a creature of the Secretary of Labor's own regulations, his interpretation of it is, under United States' jurisprudence, controlling unless plainly erroneous or inconsistent with the regulation.
A provision of the Fair Labor Standards Act of 1938 (FLSA) exempts "bona fide executive, administrative, or professional" employees from the FLSA's overtime pay requirements. Under the Secretary of Labor's regulations, one requirement for exempt status is that the employee earn a specified minimum amount on a "salary basis." The salary-basis test requires, among other matters, that the compensation not be "subject to reduction because of variations in the quality or quantity of the work performed". More than 200 individuals, almost all employed or formerly employed as sergeants by the Saint Louis Police Department, brought suit against members of the Saint Louis Board of Police Commissioners, where the sergeants sought payment of overtime pay. The district court, in determining that most of the sergeants came within the 213(a)(1) exemption, found that all of the sergeants were paid on a salary basis. On appeal, the United States Court of Appeals for the Eighth Circuit, in affirming in part and reversing in part, concluded that all of the sergeants were paid on a salary basis but otherwise satisfied the exemption test.
Did all the sergeants satisfy the requirements of the exemption test under the FLSA, even if all of them were found to be paid on a salary basis?
The Court affirmed the judgment of the court of appeals, holding that the salary-basis test applied to public-sector employees under 29 C.F.R. §§ 553.2(b) and 553.32(c). Furthermore, the Court asserted that the Secretary of Labor's salary basis test, including the no disciplinary deductions element, was not an unreasonable interpretation of the statutory exemption to the FLSA as it applied to public-sector employees.