The U.S. Supreme Court recently held that an employee who earned in excess of $200,000 annually was entitled to overtime pay because he did not qualify for the FLSA's highly compensated employee exemption. This decision – which turned on whether the employee was paid on a “salary basis” – requires employers to take a close look at their employee compensation pay structure to ensure that exempt employees are being paid in accordance with applicable law. Read on for the Supreme Court's reasoning in this particular case.
In Helix Energy Solutions Group, Inc. v. Hewitt, 598 U.S. __ (2023), an offshore oilrig supervisor earning over $200,000 annually sued his employer seeking overtime pay. The employee regularly worked over 80 hours a week and was paid on a daily rate ranging from $963 to $1,341 “so that he receives a certain amount if he works one day in a week, twice as much for two days, three times as much for three days, and so on.” In defense, the employer raised the FLSA's highly compensated employee exemption. This exemption requires, among other things, that the employee's total annual compensation be at least $107,432, which must include at least $684 per week paid on a salary or fee basis. The issue before the Court turned on whether the employee was paid on a “salary basis” when his “paycheck [was] based solely on a daily rate.”
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