On January 15, the U.S. Supreme Court ruled the preponderance of the evidence standard applies when an employer is trying to prove an employee is exempt from the Fair Labor Standards Act (FLSA) minimum wage and overtime requirements [E.M.D. Sales, Inc. v. Carrera, No. 23-217 (2025)].
Background
Sales representatives alleged their employer, E.M.D. Sales, Inc., did not pay them overtime wages as required by the FLSA. E.M.D. argued the sales representatives fell within the overtime exemption for outside sales employees. The district court disagreed with E.M.D. and ruled in favor of the sales representatives. The court said E.M.D. failed to prove by clear and convincing evidence that the sales representatives met the exemption requirements.
The 4th Circuit Court of Appeals affirmed the ruling and said when an employer defends an FLSA action based on an employee meeting the requirements of the overtime exemption, the employer must prove the employee qualifies for the exemption under the clear and convincing evidence standard. This is a higher standard than the preponderance of the evidence standard. E.M.D. appealed.
Lower Burden Applies
The Supreme Court concluded that the default preponderance standard applies when an employer is trying to prove an employee is exempt from FLSA requirements. The Court said this case did not implicate any constitutional rights that might require a heightened standard.
The Court reversed the 4th Circuit’s decision and sent the case back to the lower court to determine if the sales representatives are exempt under the FLSA.
To learn more about federal and state laws, regulations, and information to keep your company’s payroll operations in compliance, check out Payroll Source Plus!
Rayna Alexander, Esq., is Editor of Payroll Information Resources for PayrollOrg.
