By Rebeca R. Chieffallo, Esq.
Published on: Wed 26th Feb, 2025 By: Campbell Durrant, P.C.
In January 15, 2025, the United States Supreme Court released a decision imposing the “preponderance of the evidence” standard on employers when arguing that a certain employee or group of employees does not qualify for overtime and/or minimum wage under the Fair Labor Standards Act (FLSA).
The FLSA requires employers to pay certain employees a federal minimum wage as well as overtime for any time work over forty hours a week. Employees who are in exempt positions (what are often called the “white collar” exemptions) are not eligible to receive minimum wage or overtime. Generally, it is the responsibility of an employer to determine which of its employees are exempt, and which are not. If an employer’s determination is challenged in court, the employer also has the responsibility of proving why its determination is correct. If an employer fails to prove its determination was correct, it may have to pay the relevant employees back pay and other damages for any hours compensated at an improper pay rate.
The Court’s decision in E.M.D. Sales, Inc. v. Carrera discusses this obligation of employers to prove FLSA exemption determinations. The main dispute in this case was whether employers were required to satisfy the “clear and convincing evidence” standard of proof or the “preponderance of the evidence” standard. Proof by a preponderance of the evidence is a slightly easier standard to satisfy than is the clear and convincing evidence standard. If something is proved by a preponderance of the evidence, it means it is more likely than not that it is true. On the other hand, proof by clear and convincing evidence means that it is highly probable that something is true. The Court ultimately decided that employers must prove, by a preponderance of the evidence, that employees not receiving federal minimum wage and/or overtime are exempt under the language of the FLSA.
The Court based its decision on the fact that the FLSA does not state which standard is required to be proved by employers when employee overtime and minimum wage determinations are challenged. At the time the FSLA was enacted, the Court noted that proof by a preponderance of the evidence was the most commonly applied standard in most civil cases. The Court further explained that such standard is still generally applied today, minus three exceptions.
First, the Court noted that when a statute expressly states which standard is required to be proved, it must be applied. Second, the Court explained that certain constitutional rights, such as the First Amendment’s freedom of speech, require heightened standards. Lastly, heightened standards should be applied where there is risk for severe government coercion, such as situations involving the government’s decision to challenge someone’s citizenship.
Though the employer in E.M.D. Sales, Inc. was a food sales employer in the private sector, the Court’s decision still impacts how municipal employees are both classified and ultimately paid. This is because the FLSA expressly states that certain types of employees are not required to receive federal minimum wage or overtime pay. For example, the FLSA exempts, among others, the following types of employees:
• Any employee employed in an executive, administrative, or professional capacity (including academic administrative personnel or elementary and secondary school teachers).
• Employees who are computer systems analysts, computer programmers, software engineers, or other similarly skilled worker.
Thus, if a municipality, as an employer, is attempting to argue that a certain employee or group of employees falls into one of the FLSA categories, it only has to satisfy the preponderance of the evidence standard. This lower standard, in the opinion of Justice Kavanaugh, equally splits the risk of losing a court case between the parties involved. It is important to note that a job title, by itself, is insufficient to prove that a certain employee or group of employees is exempt from overtime and/or minimum wage under the FLSA. Rather, a court will want to know what work an employee does on a daily basis in addition to how the employee is classified and paid.
Takeaways:
• An employer is responsible for determining which of its employees qualify for federal minimum wage and overtime under the FLSA.
• If sued over such determinations, an employer must show, by a preponderance of the evidence, that its determination about a given employee or group of employees is, more likely than not, correct.
• Various types of municipal employees may be exempt or covered under the FLSA according to their title, actual duties, and pay.
Bottom Line:
Though the Court’s decision in E.M.D. Sales, Inc. imposes a lower standard of proof that intends to make litigation equally as risky for both involved parties, employers should make sure any FLSA-related exemption determinations are properly made and supported with adequate documentation. The attorneys at Campbell Durrant are available to advise you if your municipality is faced with issues related to employee classifications under the FLSA.
