On May 2, 2022, the Supreme Court of the United States (“SCOTUS”) granted an employer’s petition for review to determine whether highly compensated employees are entitled to overtime compensation under the Fair Labor Standards Act (“FLSA”) if they are paid on a daily rate and not on a salary basis.

Background

The FLSA requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 in a workweek.

However, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional, and outside sales employees. To qualify for exemption, employees must meet certain tests regarding their job duties and be paid on a salary basis at not less than $684 per week.

In addition, pursuant to 29 C.F.R. § 541.601(a), highly compensated employees can be exempt from its overtime requirements if the following requirements are met:

1. The employee earns a total annual compensation of $107,432 per year, which must include at least $684 per week paid on a salary or fee basis;

2. The employee also customarily and regularly performs at least one of the exempt duties or responsibilities of an executive, administrative or professional employee; and

3. The employee performs office or non-manual work as part of his or her primary duties.

Furthermore, an...

Read Full Story: https://www.natlawreview.com/article/scotus-to-determine-whether-highly-compe...