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Is Overtime Only For Low And Middle Income Employees?

by | Feb 23, 2023 | Employment Law, Federal Law Update, Wage: Overtime |

As the United States Supreme Court made abundantly clear yesterday in Helix Energy Solutions Group, Inc., et al. v. Hewitt, it all comes down to how you are paid.  The facts are fairly simple: Hewitt was an offshore oilrig worker who was paid on a day rate basis (so he got a fixed amount per day he worked) and who worked an average of 84 hours a week. Hewitt earned an average of $200,000 per year under this arrangement. However, Hewitt was not paid overtime.

Subsequently, Hewitt sued, arguing that Helix had violated the Fair Labor Standards Act (“FLSA”) by not paying him overtime. Helix argued that because Hewitt was paid a guaranteed day rate, that pay was effectively a salary because Hewitt would receive a minimum rate of pay for each day he worked. The District Court for the Southern District of Texas accepted this argument and granted summary judgment to Helix. Hewitt appealed, and the United States Court of Appeals for the Fifth Circuit reversed the district court, finding that Helix’s day rate pay scheme was not a true “salary” and that Hewitt was therefore entitled to overtime. Hewitt appealed, and the Supreme Court granted certiorari.

The overall takeaways are: (1) just because an employee is paid a lot of money does not mean that they are exempt from FLSA overtime requirements; and (2) in order for an employer to prove that an employee is exempt, it must prove all – and not just some or even most – of the particular exemption requirements.

How do FLSA regulations define what counts as a salary?

FLSA regulations provide for two forms of “salary” pay. First, §602(a) provides:

An employee will be considered to be paid on a “salary basis” within the meaning of this part if the employee regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee’s compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed.

Under §604(b), an employer can also pay extra pay on top of a salary based on hourly, daily, or shift basis provided the employee receives “a guarantee of at least the minimum weekly required amount paid on a salary basis regardless of the number of hours, days or shifts worked, and a reasonable relationship exists between the guaranteed amount and the amount actually earned.”

Thus, under either regulation, the employee must be paid a minimum amount per week that is not subject to reduction based on the number of hours, days, or shifts worked. To that end, §604(b) simply allows employers to pay over and above this fixed amount without converting the exempt employee top non-exempt. Under the FLSA, the minimum weekly salary that must be paid is currently $684.00 per week (it was $455 per week during the time period covered by Hewitt’s claims).

What is the highly compensated employee exemption?

Given Hewitt’s annual earnings, the Highly Compensated Employee exemption was at the heart of the competing arguments in Hewitt. The exemption is defined by §541.601, and requires three things:

  1. The employee was paid at least $107,432.00 annually;
  2. The employee received their pay on a salary basis; and
  3. The employee customarily and regularly performs at least one of the exempt duties or responsibilities of an exempt executive, administrative or professional employee.

Helix argued that Hewitt met these requirements because (1) he earned at least $107,432 annually, (2) he performed certain job duties covered by the executive and administrative exemptions, and (3) his day rate exceeded the minimum “salary” amount per week. Given the weakness of its “the day rate is actually a salary” argument, Helix also attempted to make policy and/or political arguments to suggest that no one making as much as Hewitt should be entitled to overtime. (Meanwhile, Helix’s CEO is reported to have been paid close to $3 million last year).

A majority of the Justices saw through this smoke screen, holding:

The overtime provision was designed both to “compensate [employees] for the burden” of working extra-long hours and to increase overall employment by incentivizing employers to widen their “distribution of available work.” Id., at 578. Employees therefore are not “deprived of the benefits of [overtime compensation] simply because they are well paid.” Jewell Ridge Coal Corp. v. Mine Workers, 325 U. S. 161, 167 (1945).

*  *  *

The critical question here is whether Hewitt was paid on a salary basis under §602(a) of the Secretary’s regulations … The answer is no: Helix did not pay Hewitt on a salary basis as defined in §602(a). That section applies solely to employees paid by the week (or longer); it is not met when an employer pays an employee by the day, as Helix paid Hewitt. Daily-rate workers, of whatever income level, are paid on a salary basis only through the test set out in §604(b) (which, again, Helix’s payment scheme did not satisfy). Those conclusions follow from both the text and the structure of the regulations. And Helix’s various policy claims cannot justify departing from what the rules say.

What should i do if i am not paid a salary and not being paid overtime?

Best Ohio Wage Theft Attorney Answer:  As Hewitt demonstrates, some employers are willing to go as far as arguing that an hourly or day rate is actually a salary to avoid paying overtime. This is why it so important to call the right attorney to fight on your behalf to get you the pay you deserve.

Importantly, wage claims have a “rolling” statute of limitations and every day you wait is a day lost on your claim. If you believe that the company you work for has failed to pay you all of your wages or has misclassified you, call the attorneys at Spitz, The Employee’s Law Firm today for a free and confidential initial consultation. (Read: What is the Spitz No Fee Guarantee?) Call our lawyers in Cleveland, Columbus, Detroit, Toledo, Cincinnati and Raleigh to get help now. Spitz, The Employee’s Law Firm and its experienced attorneys are dedicated to protecting employees’ rights and fighting for their unpaid wages.


The materials available at the top of this overtime, wage and hour web page and at this employment law website are for informational purposes only and not for the purpose of providing legal advice. If you are still asking, “Am I entitled to overtime?”, “Can I be fired for demanding my overtime pay”, “Can the company that I work for make me pay them back part of my paycheck” or “What do I do if I am not being paid minimum wage”, the your best option is to contact an Ohio overtime attorney to obtain advice with respect to FLSA questions or any particular employment law issue. Use and access to this employment law website or any of the links contained within the site do not create an attorney-client relationship. The legal opinions expressed at the top of this page or through this site are the opinions of the individual lawyer and may not reflect the opinions of The Spitz Law Firm, Brian Spitz, or any individual attorney.

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