Yesterday, the U.S. Supreme Court issued its decision in E.M.D. Sales, Inc. v. Carrera regarding FLSA exemptions, holding that a company must prove an employee was properly classified as exempt from overtime under the “preponderance of the evidence” standard, instead of the more onerous “clear and convincing evidence” standard. The big result from this decision is that it will be easier for employers to prove that an employee is not entitled to overtime pay. This is the culmination of a case that had the Supreme Court deciding to hear the underlying Fourth Circuit case back in June 2024 [Read More: SCOTUS May Change Standard of Proof for FLSA Misclassification Cases], then holding oral arguments back in November 2024 [Read More: SCOTUS Held Oral Arguments in FLSA Misclassification Cases].
What Are FLSA Exemptions under the Fair Labor Standards Act?
The Fair Labor Standards Act (FLSA) dates back to 1938, when President Franklin D. Roosevelt signed it into law. [Read More: Overtime & Minimum Wage Claims] Under the FLSA, covered employees are entitled to overtime pay at 1.5x their hourly rate for all hours worked over 40 in a work week. However, for salaried exempt employees, no overtime pay is required. Therein lies many legal disputes, because the burden is on the company to prove that an employee is NOT entitled to overtime pay (i.e., the employee is exempt from overtime pay).
Remember that just getting paid a salary is not enough for a company to claim FLSA exemptions; the employee’s DUTIES must also meet the legal requirements of a particular exemption. The most common exemptions are executive, administration, or professional, although there are dozens more. If an employee believes that his or her actual work duties do not meet the standards of the exemption, then the employee can bring a lawsuit claiming unpaid overtime pay.
Takeaways for South Carolina Employees for FLSA Exemptions
That’s when the Supreme Court’s new ruling comes into play. The burden shifts to the company to prove that the employee’s salary and job duties meet the FLSA’s requirements for an exemption to apply. Under the prior standard in the Fourth Circuit (which includes South Carolina), the company had a higher and more difficult burden to prove an exemption (clear and convincing evidence). Now, however, the Supreme Court has ruled that the proper standard moving forward will be the standard burden of proof for most civil lawsuits: preponderance of the evidence. That means “more likely than not,” or you could phrase it as 51%.
The Supreme Court noted that the FLSA itself does not specify which standard of proof applies, and that the default standard is preponderance of the evidence. The Court could not find another justification for why the Fourth Circuit, out of all the circuits in the U.S., applied this higher standard. So, in a unanimous 9-0 decision, the Court adopts the preponderance of the evidence standard for FLSA misclassification cases. This new standard will apply to all FLSA exemptions cases, including those for South Carolina employees, moving forward.
If you believe you are being misclassified and not getting paid overtime, then you should speak with a South Carolina FLSA lawyer for an in-depth review of your legal situation, including how this latest decision by the Supreme Court may impact your claim. You can contact our office at 864-233-4351 or through our Contact Us page.