The Fair Labor Standards Act has multiple exemptions for employers’ obligation to pay overtime for hours worked over 40. In a Supreme Court ruling issued on January 15, 2025, the Supreme Court reversed a court of appeals ruling requiring “clear and convincing evidence” that an overtime exemption applied. E.M.D. Sales Inc. v. Carrera, No. 23-217. The Court found that employers may show an exemption by the “preponderance of the evidence” standard, the standard in most civil litigation. The Court found the standard does not change just because important public interests are involved, as the same applies to a number of laws.
Editor’s Note: In spite of this ruling, employers should review their payroll practices to insure that exemptions actually apply. Currently, collective action lawsuits under the wage-hour laws are quite costly, and plaintiffs have reasons to pursue such actions because of the potential for liquidated damages and the award of attorney’s fees and costs.
This article is part of our February 2025 Newsletter.
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