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March 2, 2023

Legal News

March 2, 2023

A New Supreme Court Decision on Overtime

On February 22nd, the US Supreme Court issued a ruling regarding Michael Hewitt, a "tool-pusher" employed by Helix Energy Solutions, an oil and gas company based in Houston. Despite earning over $200,000 annually, Hewitt was determined to be eligible for overtime pay under the Fair Labor Standards Act (FLSA).

Contrary to popular belief, salaried employees and high earners are not automatically exempt from receiving overtime pay. To qualify for exemption from the FLSA overtime rule, employees must meet specific criteria, such as earning a salary above a certain level and holding a position in a "bona fide executive," "administrative," or "professional" role. Additionally, each category must satisfy specific duties tests, which can vary depending on the individual's status as a highly compensated employee ($100K+ annually) or not.

In Hewitt's case, Justice Elena Kagan determined that Helix had paid him on a daily basis, which did not meet the FLSA's requirements for an executive exemption based on salary. Kagan emphasized that this exemption only applies to employees who are paid weekly or longer and not on a daily basis.

Consequently, companies must ensure that their employees meet the FLSA's salary-based criteria for exemption, and any payment method other than a consistent salary will not suffice. It is crucial to comprehend and adhere to FLSA regulations to avoid legal consequences.

Therefore, it is imperative for businesses to understand the various exemption categories and determine whether their staff qualifies. The attorneys at Outside Legal Counsel LLP have significant experience in this field and provide counsel to individual employees with compensation-related concerns.

This is not legal advice and is attorney advertising.

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