On February 22, 2023, the Supreme Court of the United States issued a decision in Helix Energy Solutions Group, Inc. v. Hewitt, holding that a manager who supervised a dozen employees and made over $200,000 annually was not “exempt” from the Fair Labor Standards Act (“FLSA”) and was therefore due compensation for overtime. The fulcrum of the Court’s decision was its interpretation of the “salary basis” test, a necessary component of commonly used exemptions under the FLSA.
The FLSA, enacted in 1938, is the cornerstone of federal wage and hour law. At first glance, the FLSA is simple. It requires only that employees covered by its provisions be paid at least minimum wage and that they be paid time-and-a-half (i.e., 1.5x) their standard hourly rate for hours worked in excess of 40 per week. But the devil is in the details. The FLSA must be interpreted alongside the tome of regulations enacted by the United States Department of Labor, which delve into topics ranging from special industry concerns (e.g., fishing and forestry operations), to defining which hours qualify as “hours worked,” to mathematical calculations. Most importantly for Helix, however, are the regulations defining which workers are exempt from the coverage of the FLSA.
These exemptions, commonly referred to as “white-collar” exemptions, recognize a set of exemptions for administrative, executive, professional, computer, outside sales, and highly compensated employees. Each of these exemptions requires a...
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