by On February 22, 2023, the U.S. Supreme Court ruled in Helix Energy Solutions Group Inc. et al. v. Hewitt that high-earning professionals can only be overtime-exempt if they are paid on a “salary basis” as defined by the Fair Labor Standards Act (FLSA). To be exempt from overtime pay under the FLSA’s exemptions, employees must earn at least $684 a week on a salary basis, among other requirements specific to the exemption. The worker in this case was paid on a guaranteed daily rate rather than on a salary basis.
The employer argued that the intent of the law was met because the guaranteed daily rate served the same purpose as the minimum guaranteed weekly salary. In addition, the worker’s minimum daily guarantee of $963 far exceeded the $684 weekly salary amount required under the FLSA.
The Court relied on a strict interpretation of the FLSA’s regulations to hold that an employee paid exclusively with a day rate cannot satisfy the salary requirement. Because the employer failed the salary basis test, the Court held that the employee was not exempt from the FLSA’s overtime requirements and was entitled to overtime pay for hours worked in excess of 40 hours per week.
