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Why employers may have an easier time proving overtime exemptions

Earlier this year, the U.S. Supreme Court issued a pivotal ruling in the case of Encino Motorcars, LLC v. Navarro. The lawsuit involved five service advisors at a car dealership who sued their employer over its failure to pay them overtime wages. The case bounced through multiple higher courts before receiving a final ruling--in favor of the employer.

Under section 13(b)(10)(A) of the Fair Labor Standards Act (FLSA), auto salesmen, mechanics or auto parts dealers are exempt from overtime pay. The Supreme Court found that service advisors also fall under this category--and should be likewise exempt.

While at first glance, this ruling may appear industry-specific, it is actually likely to have a widespread impact on future FLSA litigation. In its decision, the Court denounced the Narrow Construction rule--which has long been used to protect the interests of employees in overtime disputes. Narrow construction allowed the court to hold a strong presumption that an employee is non-exempt, and the onus fell on the employer to prove that an employee "plainly and unmistakably" fell within the terms of exemption.

In light of this new ruling, however, employers must merely demonstrate that their employee's qualification for overtime exemption is consistent with the wording in the FLSA statute--not that this qualification is unmistakable or indisputable.

The ruling signifies a pivotal shift in overtime cases. It is expected that moving forward, employers will have an easier time convincing courts that their employees are exempt from overtime.

If your employer has denied you overtime pay, it's more important than ever to have an attorney with deep experience in the nuances of overtime law to advocate on your behalf.

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