Supreme Court sides with business in overtime exemption case – McKnight's Senior Living

In a win for businesses, the Supreme Court on Wednesday ruled unanimously that employers must prove that an employee is exempt from the minimum wage and overtime pay provisions of the Fair Labor Standard Act by only “a preponderance of the evidence” and not by “clear and convincing” evidence.
Effectively, the ruling lowers employers’ “evidentiary burden to successfully argue their workers fall within an FLSA exemption,” according to attorneys at Polsinelli Law Firm.
The Fair Labor Standards Act requires covered employers to pay workers a minimum wage and, for certain employees who work more than 40 hours in a week, overtime pay of at least 1.5 times the employee’s regular rate of pay. Exceptions to that rule exist, however, including for salaried employees whose pay exceeds the FLSA’s minimum salary requirements and who perform executive, administrative or professional employees, outside sales and some other functions.
In the case before the High Court, sales representatives of a company that distributes Latin American, Caribbean and Asian foods to grocery stores in the Washington, DC, area filed the lawsuit, E.M.D. Sales v. Carrera. The company countered that the sales reps were “outside salesmen” who are exempt from the overtime requirement.
The 4th US Circuit Court of Appeals previously ruled that the company failed to meet the threshold of the “clear and convincing evidence” standard, which led the company to bring the case to Supreme Court to weigh in on its burden of proof to show that the workers were outside salespeople rather than employees.
“It is important to note that the Court’s decision does not change the applicable exemptions under the FLSA. Instead, it only clarifies the evidentiary burden imposed on an employer to prove a FLSA exemption applies,” Elaine Brown, senior attorney at Squire Patton Boggs, wrote in Employment Law Worldview. 
“Employers who classify employees as FLSA-exempt should take appropriate steps to ensure they would be able to demonstrate — by a preponderance of evidence — that they properly classified each employee who is not paid minimum wage or overtime compensation by ensuring that they have appropriate and sufficient records of their payment on a salary basis and of the nature of the duties the employee performs,” Brown added.


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