SCOTUS to decide whether day-rate employee gets FLSA overtime pay

In September of 2021, the U.S. 5th Circuit Court of Appeals reversed a summary judgment (dismissal without trial) order granted to Helix Energy Solutions Group related to the necessity of overtime payments for a highly compensated employee who was paid a daily rate.

Even though the employee earned over $200,000 per year, the 5th Circuit overturned the district court’s order dismissing the trial at the request of Helix, his employer. The U.S. Supreme Court agreed to hear the case, and oral arguments took place in October. While no opinion has yet been rendered, the reported questioning by the justices has raised questions as to whether new challenges will be brought to the regulatory scheme governing overtime for highly compensated individuals.

Day-rate employee seeks overtime pay

The original suit was filed by Michael Hewitt, an employee of Helix Energy Solutions Group, because he wanted overtime pay for weeks in which he worked over 40 hours. He worked as a tool pusher, managing other employees during work periods, or a “hitch,” offshore on an oil rig. Each hitch lasted about one month.

Helix acknowledged that during each hitch, Hewitt worked more than 40 hours per week. The issue decided by the 5th Circuit, and currently being examined by the Supreme Court, was whether he was paid on a salary or day-rate basis.

As the 5th Circuit pointed out, there’s no exemption from the Fair Labor Standards Act’s (FLSA) overtime requirements simply for being well paid. Instead, employees—even highly compensated employees—must satisfy specific regulatory tests.