Is a Worker Making Over $200,000 per Year Entitled to Overtime Pay?
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Is a worker making more than $200,000 a year entitled to overtime compensation? A recent employment law case prompts questions regarding the federal wage law and whether its protections cover highly paid employees.
The Case: Helix Energy Solutions Group, Inc. v. Hewitt
The Court: Supreme Court of the United States
The Case No.: 21-984
The Case: Helix Energy Solutions Group, Inc. v. Hewitt
Former oil rig worker, Michael Hewitt, makes over $200,000 per year. In a recent appeals court ruling, the court found that Hewitt was not exempt from the Fair Labor Standards Act’s overtime requirement for work performed over 40 hours in a workweek because he was paid by a day rate, which does not constitute a guaranteed weekly salary.
The Dispute: Helix Energy Solutions Group, Inc. v. Hewitt
Helix Energy Solutions Group Inc., the defendant in the case, is fighting to overturn the appeals court ruling. Many are waiting to hear the impending U.S. Supreme Court decision as the case asks them to consider whether a worker making over $200,000 a year is entitled to overtime compensation. The case prompts questions over whether a supervisor making more than $200,000 annually is entitled to overtime pay because the standalone regulatory exemption (29 C.F.R. § 541.601) remains subject to detailed requirements (29 C.F.R. § 541.604) to determine if highly compensated supervisors are exempt from the Fair Labor Standards Act’s overtime pay requirements. The case turns on technicalities in FLSA regulations. It has the court justices wrestling with the nuances of the FLSA’s implementing regulations regarding professional, administrative, and executive employees who are exempt from overtime.
The Arguments: Helix Energy Solutions Group, Inc. v. Hewitt
Hewitt’s daily rate of a minimum of $963 is well above the required minimum weekly amount for salaried employees, and Helix claims that, as such, it could be considered a salary. However, the regulations were intended to make sure workers receive predetermined payments regardless of the quality or quantity of work completed in a work week. Others argue that the FLSA was created to protect low-wage employees working long hours for insufficient pay and wasn’t designed to offer similar protections to professionals bringing home six-figure salaries. Still, others respond that such arguments are based on common sense - not the regulations or the way the statute works, which is the matter being considered. Hewitt was paid a daily rate - not a salary, and a salary is required for a worker to be exempt from overtime pay.
The Impact: Helix Energy Solutions Group, Inc. v. Hewitt
The energy industry and the nursing field are likely to see an impact from the decision in this case. The energy industry’s use of a day rate pay structure to compensate workers, including highly paid employees on their oil field and offshore jobs, could mean a major impact and significant overhaul of payment procedures. The nursing industry would also see repercussions as registered nurses currently earn pay based on an hourly basis, even if they reach six figures.
If you have questions about how to file a California overtime lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw L.L.P. Experienced employment law attorneys are ready to assist you in various law firm offices in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.
