Employers in Maryland and Washington, D.C. face complex legal challenges. This guide explains key employment law concepts and how businesses can protect themselves.
Defending Exempt Status Under the FLSA Recently Became Easier
By: Bruce M. Luchansky, Esq.
High-level employees often are exempt from the overtime laws under the Fair Labor Standards Act (FLSA). When employees are paid on a salary basis and they perform duties as a manager, administrator, or professional (for example), they do not receive an overtime premium for any hours they work above 40 hours per week. But what happens when an employee challenges his or her exempt status? Perhaps a Project Manager argues that his primary duties are not managerial or administrative. If the Project Manager sues the company for unpaid overtime, the employer will have the legal burden to prove that the PM meets the definition of an exempt employee. But what is the legal standard the employer must meet? How hard will it be for the company to prove its case?
A recent decision by the United States Supreme Court made it much easier on employers – especially those in Maryland – to prove exempt status. In E.M.D. Sales, Inc. v. Carrera, 604 U.S. 45 (2025), the Supreme Court resolved a split among the federal circuits regarding the legal standard to be applied and issued a decision that changed the legal standard of proof in favor of the employer.
Before Carrera, some federal circuits – including the 4th Circuit, which encompasses Maryland – required employers to prove by “clear and convincing evidence” that an employee met all the requirements of exempt status under the FLSA. This standard is a high one that often is reserved for difficult cases such as claims of fraud, in which the facts at issue must be proven to be highly probable. Other circuits disagreed and held that the legal standard only should be the one that applies to most cases: the preponderance of the evidence standard. Under this test, the employer only would have to prove that it is more likely than not that the employee is exempt. Put simply, the judge or jury simply must find that it is at least 51% – 49% in favor of the employer.
In Carrera, the Supreme Court disagreed with the 4th Circuit and found that the “preponderance of the evidence” standard should apply to proving exempt status. Of note, the Supreme Court pointed out that discrimination cases under Title VII of the Civil Rights Act are decided under the preponderance of the evidence standard and saw no principled reason why a different standard should apply to FLSA cases.
Wage and hour issues are complicated. Before classifying your employees as exempt under the FLSA, or if an exempt employee challenges his or her exempt status, email me at lucky@luchanskylaw.com, or call me at 410.522.1020. The attorneys at Luchansky Law will guide you through the legal thicket of the applicable overtime laws.
How Luchansky Law Can Help
Luchansky Law advises employers on compliance, risk mitigation, and litigation strategy. Contact us to protect your business and navigate employment law challenges effectively.
