Why did the Supreme Court just rule that someone earning in excess of $200,000/year is entitled to overtime?
It’s a question of back to basics. Although very highly compensated, this employee was not guaranteed a weekly salary; rather he received a generous daily rate for each day worked. The court ruled that the Fair Labor Standards Act (FLSA) requires that an employee be paid on a “salary basis” (and meet the duties test) to qualify as exempt from overtime payments. The salary must not fluctuate based on the quality or quantity of work performed. The employer in this case, Helix Energy Solutions Group, v. Hewitt, paid the employee for a 28 day “hitch” on an oil platform, followed by a 28 day “hitch” off, and now faces a significant overtime liability and will owe the sizeable attorneys’ fees incurred by the employee in pursuing his claim to the U.S. Supreme Court. The takeaway for all employers is to ensure that exempt employees meet the basic requirement of being paid a weekly salary that does not fluctuate.