SCOTUSblog by Charlotte Garden 2/23/2023
The basic rule is simple: If you earn an hourly wage and you work more than 40 hours in a week, you are probably entitled to “time and a half” overtime pay. But that widely known formula can give way to complexity, as it did in Helix Energy Solutions Group v. Hewitt, a case about whether plaintiff Michael Hewitt is owed overtime pay by his former employer. After parsing detailed regulatory language, a six-justice majority sided with Hewitt; the opinion, authored by Justice Elena Kagan, ultimately turns on the intuitive conclusion that someone who earns a day-rate is not paid on a “salary basis.”
Oil-rig employees like Hewitt work “hitches”; for Hewitt, a hitch was 28 consecutive 12-hour days, for which he was paid at least $963 per day – but no overtime pay, even though he routinely worked 84 hours per week. Hewitt sued, and Helix asserted that Hewitt fell under the Fair Labor Standards Act’s exemption for “bona fide executive, administrative, or professional” (EAP) employees.
Department of Labor regulations define this exemption in two ways. First, an employee is an exempt EAP if they are paid on a salary basis, if the salary exceeds a minimum threshold, and if their job duties align with a relatively stringent “duties test.” Alternatively, a “highly compensated employee” (HCE) is exempt as long as they perform at least one job duty that qualifies as executive, administrative, or professional, and if – as of when Hewitt worked for Helix — they earn at least $100,000 per year, including “at least $455 per week paid on a salary or fee basis.” Both parties agreed that Hewitt performed at least one executive duty, and that he earned over both thresholds. That left one question: whether Hewitt was paid on a “salary basis.”
“Salary basis” is defined in another regulation, referred to as Section 602: The employee must “regularly receive[] each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee’s compensation,” regardless of the quantity or quality of work. Further, the employee “must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked.”
More:
https://www.scotusblog.com/2023/02/helix-energy-supreme-court-opinion/
