SCotuShoLdShIgh-earnIng , day-rateeMpLoyeeISentItLedtoovertIMepay labor & Employment law Section
Continuedfrompage40
Helix denied that Hewitt was entitled to overtime compensation , asserting that he qualified for the FLSA ’ s executive exemption . To qualify for that exemption , an employee must , among other things , be paid on a salary basis and earn at least $ 455 per week ( now , $ 684 ). Here , the parties disputed only whether Hewitt was paid on a “ salary basis .”
Department of Labor ( DOL ) regulations provide two methods for compensating employees on a salary basis . First , under § 541.602 ( a ), an employee is paid on a “ salary basis ” if the employee regularly receives a predetermined amount each pay period on a weekly , or less frequent , basis that is not subject to reductions . 2 Alternatively , § 541.604 ( b ) provides that an employee who is paid an hourly , daily , or shift rate may satisfy the salary basis requirement if : ( 1 ) the employee is guaranteed at least $ 455 each week ( now , $ 684 ) “ regardless of the number of hours , days or shifts worked ;” and ( 2 ) the guaranteed weekly amount bears a “ reasonable relationship ” to the “ amount actually earned .” 3
Helix conceded that Hewitt ’ s compensation did not meet § 604 ( b )’ s requirements , as it did not guarantee Hewitt a weekly amount above $ 455 that bore a “ reasonable relationship ” to his usual weekly earnings . Therefore , the case hinged on whether the salary basis provision of § 602 ( a ) was satisfied .
In a 6-3 ruling , the Supreme Court held that day-rate employees are not paid on a salary basis under § 602 ( a ). It rejected Helix ’ s argument that the salary basis test was met because Hewitt was paid every two weeks and his pay always exceeded the minimum salary level for any week in which he worked . The Court reasoned that § 602 ( a ) “ applies solely to employees paid by the week ( or longer )” and “ excludes daily-rate workers .” 4 Instead , such employees “ are paid on a salary basis only through the test set out in § 604 ( b ) ( which , again , Helix ’ s payment scheme did not satisfy ).” 5 n
1 https :// www . supremecourt . gov / opinions / 22pdf / 21-984 _ j426 . pdf .
2
See 29 C . F . R . § 541.602 ( a )( 1 ) ( emphasis added ).
3
See 29 C . F . R . § 541.604 ( b ).
4
Helix Energy Solutions Group , Inc . v . Hewitt , 214 L . Ed . 2d 409 , 421 – 22 ( 2023 ).
5
Id . at 421 .
Author : Chase H . Hale - Jackson Lewis P . C .
Join the Labor & Employment Law Section at hillsbar . com .
M A Y - J U N 2 0 2 3 | H C B A L A W Y E R
4 1