U.S. Supreme Court Clarifies Standard of Proof Regarding FLSA Exempt Classifications

Under the Fair Labor Standards Act (FLSA), employers must pay employees at least minimum wage for all hours worked and overtime at a rate of 1.5 times their regular rate of pay for all hours worked over 40 hours in a work week. However, the FLSA provides several exemptions from minimum wage and overtime pay requirements. The most common are “white-collar” exemptions, which mainly apply to executive, administrative and professional employees. Employers carry the burden of proving proper employee classification under the FLSA. 

In the recently decided case of E.M.D. Sales Inc. v. Carrera, the Supreme Court held that a District Court’s requirement that an employer prove by “clear and convincing” evidence that the employee was properly classified as exempt was inappropriate. Instead, the Court states that a “preponderance of evidence” standard is applicable to the issue. This is a win for employers because establishing that an employee is properly classified as exempt by a “preponderance of evidence” means that an employer must simply show that it is more likely than not that the employee should be exempt, which is a lower standard of proof than a “clear and convincing” standard of proof. 

The holding in E.M.D. Sales Inc. establishes a consistent standard for FLSA exemption cases. By adopting the “preponderance of evidence” standard, the Court has eased the burden on employers to establish an FLSA exemption. Although the Court’s decision makes it easier for employers to prove FLSA exemptions, proper employee classification will continue to remain an important issue for employers.