Supreme Court Lets Stand $0 Overtime Verdict for Misclassified Worker
On Oct. 13, the U.S. Supreme Court declined to review Merritt v. Texas Farm Bureau. The denial leaves in place a Fifth Circuit ruling that a company owed no overtime pay to a misclassified worker because it didn’t know he was working overtime.
Worker Alleged Misclassification, Sought OT
Jerry Merritt managed a team of insurance agents for Texas Farm Bureau. Like all agency managers at the company, he was classified as an independent contractor. He set his own schedule, wasn’t paid hourly and didn’t track or report his hours. From 2016 to 2018, his commissions ranged from $552,000 to $627,000 a year.
A district court ruled he should’ve been classified as an employee and was owed at least 816 hours of overtime. A jury then found the company didn’t know or have reason to know he worked those hours. The Fifth Circuit upheld the verdict, holding that failing to track hours doesn’t, by itself, show an employer knew about overtime.
What It Means for Overtime Pay Liability
The case shows that employer knowledge remains central to FLSA overtime liability, even when a worker is later found to have been misclassified. Within the Fifth Circuit, the lack of a timekeeping system alone won’t prove a company knew about overtime.
The Supreme Court’s denial of review sets no national rule, so tracking hours for nonexempt employees is still the safest practice everywhere.
More info: Misclassification Alone Doesn’t Create Overtime Liability, Court Says
Free Training & Resources
Further Reading
Employees with wages exceeding $145,000 in 2023 may hesitate to make catch-up contributions next year. They’ll be impacted by tax cha...
Wyoming’s unemployment insurance (UI) wage base rises to $34,900 per employee in 2027, up from $33,800 in 2026. The $1,100 increase takes...
On Jan. 1, 2027, Washington’s Paid Family & Medical Leave premium increases to 1.2%, from 1.13%. Employers will pay 29.3% of the p...
The rollercoaster ride continues as federal regulators reevaluate the current overtime rule and what it means to meet the salary level test...
With Election Day coming Tuesday, Nov. 3, 2026, now’s a good time for payroll teams to review state voting leave requirements – before ...
Upwards of 10 million workers will see a bump in their paychecks in 2024. Twenty-two states hiked their minimum wage rates to help low-inco...