FLSA Exemptions For Employers: Now 40% Less Daunting, 100% Still Your Problem

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Last week, the Supreme Court clarified employers can show how certain employees don’t need to be paid overtime or minimum wage under the Fair Labor Standards Act (FLSA)

Spoiler alert: it’s not as tough as some courts thought.

Why Did This Case Happen?

The case involved sales representatives for a food distribution company who argued they were entitled to overtime pay because their work didn’t fully match the definition of an “outside salesperson.” The company argued that the stricter “clear and convincing” burden of proof used in their region was unfair. Clear and convincing is not quite “beyond a reasonable doubt” (think: Law and Order).

What Happened?

The Supreme Court agreed and ruled that employers only need to show it’s “more likely than not” (a mere preponderance of the evidence, as we lawyers say in our legal briefs) that an employee is exempt from FLSA rules. It noted that in civil cases, the default proof standard is typically “more likely than not.” Before this decision, the Fourth Circuit had required “clear and convincing evidence,” which made it harder for employers to win these cases. This ruling brings the standard in line with what most other courts were already using.

Why Should You Care?

The FLSA is a federal law that guarantees workers a minimum wage and overtime pay unless they fall under specific exemptions. These exemptions include roles like outside salespeople who work away from the office or certain types of managers. The burden of proof lies entirely with the employer to show that a worker qualifies for an exemption. The Supreme Court’s decision lowers the bar for employers, but they still need strong evidence to support their claims.

Key Points to Know:

  1. It’s on the Employer: Employers must prove an employee is exempt. This means having clear documentation, like job descriptions and work records, ready to back up the claim.
  2. Lower Proof Standard: Now, employers only need to show it’s “more likely than not” that an employee fits an exemption, making it easier to meet the requirement.
  3. Same Rules Across the Country: Previously, some courts had stricter standards, creating confusion. This ruling ensures a consistent rule nationwide. However, your mileage may vary under state wage and hour laws.

Bottom Line

This decision gives employers some breathing room, but it’s not a free pass. If you’re an HR pro or a business owner, ensure your records are solid, your classifications are correct, and your lawyer’s number is handy. You’ve got a little more wiggle room, but the responsibility is still 100% yours.

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