Supreme Court clarifies employers’ burden of proof in FLSA exemption cases

Employers facing lawsuits or government investigations under the federal Fair Labor Standards Act (FLSA) must demonstrate that certain employees are exempt from the law’s requirements for minimum wage and overtime pay. However, a recent decision from the U.S. Supreme Court has clarified that the burden of proof on employers remains at the customary preponderance-of-the-evidence standard—a lower threshold than previously applied by some courts. This ruling is a win for employers, but it also highlights the importance of ensuring employee classifications are accurate to avoid costly legal disputes.

FLSA basics

The FLSA sets a federal minimum wage for covered employees and mandates overtime pay for those working more than 40 hours per week. However, some workers are exempt from these requirements based on their job duties and compensation levels.

Misclassifying employees as exempt—when their roles don’t meet the FLSA’s criteria—can expose employers to significant penalties, back pay claims, and legal expenses. Misclassification disputes are common and often lead to both individual and class action lawsuits.

Supreme Court’s decision