Highly compensated employees can be eligible for overtime pay if they are paid on a daily basis, the U.S. Supreme Court ruled on Feb. 22 in a case that clarifies overtime exemptions under the Fair Labor Standards Act (FLSA).
In Helix Energy Solutions Group v. Hewitt, the Supreme Court ruled 6-3 that a former employee who made more than $200,000 a year was eligible for overtime pay because he was paid on a daily basis.
The case hinged on whether being paid at least a minimum amount per day can count as a salary. The court ruled that the defendant company didn't pay a salary as defined under the FLSA, and therefore a highly compensated employee was not exempt.
"This decision reiterates that the FLSA and other wage and hour laws can have very rigid requirements," said Patrick Dalin, an attorney with Fisher Phillips in Philadelphia. "The employee in this case was very well-paid, but the court nevertheless denied the employer the overtime exemption based on a very technical reading of the regulations. Employers should ensure that they pay all employees covered by the executive, administrative and professional exemptions within the strict guidelines of the salary basis and salary level regulations."
While employers should make sure to pay employees according to the FLSA, attorneys say most employers will not have to change their practices due to the court's ruling.
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