Since the Fair Labor Standards Act (FLSA) was enacted in 1938, employers have had the burden of proving that an exemption applies to the overtime requirement, which requires that employees receive overtime for work over 40 hours in one week. The FLSA, however, is silent on the evidentiary burden required for an employer to demonstrate its employees are exempt from minimum wage and overtime pay.
On January 15, 2025, the Supreme Court of the United States resolved this question in E.M.D. Sales, Inc. v. Carrera, concluding that there is no heightened evidentiary standard required to demonstrate that an employee is exempt from the minimum wage and overtime pay requirements of the FLSA.
Previously, there was a split in circuit courts applying either a (lower) preponderance of an evidence standard or the heightened clear and convincing evidentiary standard to the question of whether an employee was exempt from overtime requirements under the FLSA. The Fourth Circuit case concluded that the burden should be the heightened standard, while the majority of other circuits used the default, and lower standard, by a preponderance of the evidence. This decision was appealed to the Supreme Court.
The Supreme Court has now sided with the majority of circuit courts holding that employers must demonstrate that their employees are exempt from overtime pay requirements only by a preponderance of evidence. In layman's terms, this standard means that it is more likely than not that the claim is true.
This determination is a win for employers in circuits where they had to prove exemption status by a clear and convincing standard, namely the Fourth Circuit, which is made up of several Southeastern states. For employers in the Ninth and 10th Circuit Courts of Appeals, however, this decision confirms the evidentiary standard already used by the federal district courts. States in the Ninth Circuit include Arizona and California, while Colorado, Utah, New Mexico, and Wyoming are among those in the 10th Circuit.
For Employers Council members, we encourage organizations to regularly review their job descriptions to ensure that positions classified as exempt meet the criteria for exemption status. For help with this determination, contact Employers Council for guidance.
Heather Hancz is an attorney for Employers Council.