Justia Summary
Hewitt filed suit under the Fair Labor Standards Act (FLSA), which guarantees overtime pay to covered employees when they work more than 40 hours a week. From 2014-2017, Hewitt typically worked 84 hours per week on Helix's offshore oil rig, while on the vessel. Helix paid Hewitt a daily rate. Hewitt’s paycheck amounted to his daily rate times the number of days he worked. Hewitt earned over $200,000 annually.
Helix argued that Hewitt was exempt from the FLSA as “a bona fide executive,” 29 U.S.C. 213(a)(1). An employee is considered an exempt bona fide executive if the employee meets the “salary basis” test, which requires that an employee receive a predetermined and fixed salary that does not vary with the amount of time worked, the “salary level” test, and the job “duties” test.
The Supreme Court affirmed the Fifth Circuit. Hewitt was not exempt from the FLSA’s overtime pay guarantee. A daily-rate employee does not fall within the main salary-basis provision of 29 CFR 541.602(a)–the employee regularly receives each pay period a predetermined amount, “not subject to reduction because of variations in the quality or quantity of the work performed.” A daily-rate worker is paid for each day he works and no others. Daily-rate workers, of whatever income level, qualify as paid on a salary basis under 29 CFR 541.604(b) only if an employer also provides a guarantee of weekly payment approximating what the employee usually earns. Reading 602(a) also to cover daily- and hourly-rate employees would subvert 604(b)’s strict conditions on when their pay counts as a “salary.” There is no simple income level test for the exemption.