Is a High-Earning Employee Entitled to Overtime?
According to the Supreme Court, even a high-earning employee can be entitled to overtime if they are not paid on a salary basis.
In Helix Energy Solutions Group v. Hewitt, the Court considered the federal Fair Labor Standards Act (FLSA) and assessed whether a supervisor earning over $200,000 annually is entitled to overtime pay.
Helix argued that Hewitt’s “executive” status exempted him from overtime pay and placed him beyond the threshold for a “highly compensated” worker. On appeal in the 5th Circuit, the court held that the “highly compensated” metric did not apply because Hewitt was paid using a day rate, not a salary.
When the case arrived at the Supreme Court, the issue before the Justices was whether a “daily rate” pay satisfied the salary-based requirement under the FLSA.
The Court held that a salary provided “the stability and security of a regular weekly, monthly, or annual pay structure.” Helix had violated the principles of a true salary by paying Hewitt for the days on which he actually worked.
If your business has any questions on this topic or any other matters, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288.
