Takeaways

• The Fifth Circuit ruled that a guaranteed weekly or biweekly salary can satisfy the FLSA salary basis test even where substantial additional pay is calculated by the day. The decision reinforces that the salary basis analysis turns on the guaranteed salary component — not the amount or structure of additional day-rate, hourly rate, bonuses or other variable compensation.
• The decision is the latest in a growing body of cases evaluating how the FLSA’s “salary basis” regulations for exempt employees apply to hybrid pay structures.
• The decision is particularly helpful for employers that use hybrid pay plans for highly compensated employees, field employees and others who receive a guaranteed salary plus day rates, hourly pay, shift premiums, commissions, bonuses, or incentive compensation.

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Article

In this interlocutory appeal limited to the salary basis component of the highly compensated employee exemption from overtime under the Fair Labor Standards Act (FLSA), the U.S. Court of Appeals for the Fifth Circuit held an oilfield drilling employee paid under a hybrid compensation arrangement comprised of a fixed biweekly salary plus additional “day-rate” and bonus components, was paid on a salary basis. Guilbeau v. Schlumberger Tech. Corp., 2026 U.S. App. LEXIS 17179 (5th Cir. June 12, 2026).

The appeals court reversed a district court’s denial of summary judgment to an employer as to the overtime claims of one named plaintiff in a proposed collective...

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