The U.S. Supreme Court has rejected a long-established principle that FLSA overtime exemptions must be narrowly construed against employers.  The Court set aside its previous precedent of applying exemptions only to cases that fall “plainly and unmistakably within their terms and spirit,” a standard that compelled lower courts to resolve any close conflict over whether an exemption should apply in favor of the employee.  Instead, the Court established a new, more lenient standard under which lower courts are simply required to give exemptions a “fair reading.”

Legal experts believe that under this new standard, although the burden will remain with employers to establish the exemption, employers and employees will now have equal footing in persuading the court whether application of the exemption is fair under the circumstances.  Depending on how the lower courts actually implement the Supreme Court’s guidance, this ruling could impact a range of exemptions for executive, administrative and professional employees that previously were considered “close calls” because they fell within gray areas of the FLSA’s statutory language.

Sullivan Law Group will be monitoring the impact of this decision as it works its way through the lower courts.  As always, we recommend that employers consult the Department of Labor website before determining whether an employee is exempt, and reach out for legal advice if the answer is not clear.  SLG is available to assist clients in making exemption determinations, and in crafting job descriptions to ensure they meet the exemption requirements while also being an accurate representation of actual job responsibilities.

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