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The Supreme Court Will Decide the Scope of Overtime Pay Protections Under the FLSA

In mid-October, the Supreme Court heard oral arguments in Helix Energy Solutions Group, Inc. v. Hewitt, a case that asks whether a highly paid employee with supervisory duties is nevertheless entitled to overtime pay under the Fair Labor Standards Act (FLSA) because he was paid a flat, daily rate instead of a salary.

Michael Hewitt worked as a tool pusher for Helix Energy Solutions Group, Inc., an oil and gas services firm. In that role, Hewitt held supervisory responsibilities and earned over $200,000 per year based on a daily rate of $963.  Even though Hewitt routinely worked more than 40 hours per week, Helix classified Hewitt as exempt from overtime and other requirements under the FLSA, because of his supervisory duties and high level of pay.

After Helix terminated Hewitt’s employment, Hewitt sued his former employer for unpaid overtime, arguing that because he was paid a daily rate and not a salary, he was owed overtime under the FLSA.

The FLSA requires employers to pay covered employees one and one-half their hourly rate for any additional time worked over the standard 40-hour workweek.  However, the FLSA exempts some workers from overtime protections, including “highly compensated employees” who regularly perform executive duties, earn at least $107,4032 per year, and receive at least $684 per week on a salary basis.  29 C.F.R. § 541.601.  An employee is paid on a “salary basis” if she regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount “without regard to the number of days or hours worked.” 29 C.F.R. § 541.602.  Hewitt argued that because he was paid by the day for “hitches” he worked, he was not paid “without regard” to the days or hours he worked and thus was entitled to overtime pay.

The en banc Fifth Circuit agreed with Hewitt, holding that no matter how much an employee ultimately earns, the plain text of FLSA regulations requires that employers pay overtime to employees who, like Hewitt, are paid a daily rate without a minimum weekly guarantee and with regard to the number of days worked.  The Fifth Circuit joined the Sixth and Eighth Circuits in concluding that some highly compensated employees may still be owed overtime under the FLSA.  See Hughes v. Gulf Interstate Field Servs. Inc., 878 F.3d 183 (6th Cir. 2017); Coates v. Dassault Falcon Jet Corp., 961 F.3d 1039, 1042 (8th Cir. 2020).  In its cert. petition to the Supreme Court, Helix argued that the Fifth Circuit’s decision conflicts with cases from the First and Second Circuits holding that the “highly compensated employees” regulation isn’t limited by other FLSA regulations.  See Litz v. Saint Consulting Group, Inc., 772 F.3d 1 (1st Cir. 2014); Anani v. CVS RX Services, Inc., 730 F.3d 146 (2d Cir. 2013).

This term, the Supreme Court will resolve this potential circuit split.  During oral arguments, some Justices were skeptical that an employee making over $200,000 a year would be entitled to overtime.  Justice Kavanaugh even suggested that the federal regulations interpreting the term “salary” in the FLSA might be invalid.

Although this case presents a seemingly narrow issue, the stakes are high.  The FLSA provides all workers with many critical workplace and pay protections.  If the Supreme Court fails to hew to the plain text of the regulations, and instead relies on Helix’s dubious rationale that the FLSA’s purpose is to help only low-wage workers, it may signal the erosion of overtime protections and other workplace safeguards for a large class of workers.

As in this case, many employers incorrectly label employees who are legally protected by the FLSA as “exempt” in order to avoid paying them overtime or minimum wage. Employers also sometimes label protected employees as “independent contractors” so they can avoid paying them what the law requires. If you are covered by the FLSA, then your employer labeling you as “exempt” or calling you an “independent contractor” does not deprive you of your federal right to receive overtime when you work more than 40 hours per week.

If you are concerned your employer may have misclassified your position and may not be paying you the way the law requires, LAW can answer your questions and help you understand your rights.  And if you do need legal representation, LAW’s attorneys will fight aggressively for you.

Legare, Attwood & Wolfe, LLC specializes in representing employees who have suffered civil rights violations, including racial discrimination, gender discrimination (including pregnancy, sexual harassment, sexual orientation and transgender discrimination), religious discrimination, national origin discrimination, disability discrimination, as well as those who have Family Medical Leave Act claims, overtime and job misclassification claims, harassment, and breach of contract or wrongful termination claims.  If you want more information about your unique situation, we’ll be glad to see if we can help.  (470) 579-3936 | law-llc.com

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