by Stephen D. Hans | Jun 11, 2024 | Supreme Court to Review Labor Law Exemption Test
High Court Seeks to Clarify Standard for Exempt Employees Under federal labor laws, employees are generally entitled to overtime pay when they exceed a certain number of hours worked in a given pay period, unless they are deemed to be exempt employees. An employee may be considered exempt based on his or her compensation and the actual duties performed. The specific exemptions are set forth by the United States Department of Labor and generally include executive, professional, administrative and outside sales personnel who are paid a salary. As disputes have arisen over the years, the federal courts have established the legal standard by which an employee may be considered exempt. To date, seven federal circuit courts have ruled on the matter, with six of the seven concluding that a worker’s exempt status need only be proved by “a mere preponderance of the evidence.” The 4th Judicial Circuit, though, located in Richmond, Virginia, has long held that such proof must involve “clear and convincing evidence,” a higher standard. The Supreme Court of the United States has agreed to consider the matter, responding to a petition filed by EMD Sales, a grocery distributor located in Baltimore, Maryland. The dispute to be resolved by the Supreme Court arose when three employees of EMD filed a class action, contending that their employer had wrongfully classified them as exempt outside sales personnel. The federal district court agreed with the plaintiffs, stating that the employees were not exempt and citing precedent requiring EMD to provide “clear and convincing evidence” to the contrary. The 4th Federal Circuit affirmed the decision of the lower court, finding it...
