The United States Supreme Court has clarified that even highly compensated employees qualify for overtime pay if they charge a daily rate rather than a fixed salary. In this case, an offshore oil rig employee, Michael Hewitt, filed suit to collect overtime pay from Helix Energy Solutions. Under the Fair Labor Standards Act (“FLSA”), employees are exempt from overtime pay if they receive a salary; whether Hewitt could collect overtime pay, therefore, turned on whether Hewitt was a “salaried” employee. Helix argued that because Hewitt received a paycheck every two weeks above the requisite salary level under FLSA, Hewitt was a salaried employee not entitled to overtime pay. However, Helix’s compensation was based on a daily rate calculation instead of a guaranteed weekly salary.
The Court explained that unless an employer guarantees weekly payment approximating the employee’s earnings, daily rate workers, even if highly compensated, do not qualify as salaried employees. Because Hewitt was a daily rate worker and Helix did not guarantee a weekly payment, the Court held Hewitt to qualify for overtime pay.