• A recent decision by the Fifth Circuit Court of Appeals clarifies how courts should apply the highly compensated employee exemption under the Fair Labor Standards Act.
• For the exemption to apply, an employee must perform at least one exempt duty set forth in the standard executive, administrative, or professional exemptions — a simpler duties test to meet.
• The court’s analysis provides practical guidance for employers evaluating overtime exemptions for technical and field-based roles.

A recent decision by the U.S. Court of Appeals for the Fifth Circuit clarifies how courts should apply the Fair Labor Standards Act’s (FLSA’s) highly compensated employee (HCE) exemption and distinguishes the exemption from the more stringent “duties” requirements of the standard administrative exemption. Gilchrist v. Schlumberger Technology Corp., No. 22-50257 (5th Cir. July 14, 2025).

The Fifth Circuit explained that employers classifying high earners as exempt under the HCE exemption are not required to meet the same duties test as those relying on the “standalone” administrative exemption. Instead, they must establish that employees perform only one of the duties required by of the standard administrative exemption. Employers need not prove that the employees performed work related to the general business operations of the employer or its clients and that they exercised independent discretion and judgment with respect to matters of significance. Employers need only prove the employees...

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