Supreme Court rules oil rig worker who makes $200k is entitled to overtime

U.S. Supreme Court affects employees paid on daily basis, despite wages

Us Supreme Court BuildingThe U.S. Supreme Court issued a ruling Wednesday that expands interpretations of who is entitled to overtime pay under the Fair Labor Standards Act.

In its ruling, the court said that Michael Hewitt, an offshore oil rig worker who earned over $200,000 a year is entitled to overtime pay for having worked more than 40 hours per week even though the company he worked for, Helix Energy Solutions Group, classified him as a “bona fide executive.”

Helix Energy had argued that Hewitt wasn’t entitled to overtime under the Fair Labor Standards Act, despite the fact that he regularly worked 84 hours per week on the rigs.

In a 6-3 ruling Wednesday, the Supreme Court noted the case hinged on the issue of whether Hewitt, whose job is called tool pusher, was paid on a salary basis.

In her majority opinion, Justice Elena Kagan wrote, “The question here is whether a high-earning employee is compensated on a ‘salary basis’ when his paycheck is based solely on a daily rate — so that he receives a certain amount if he works one day in a week, twice as much for two days, three times as much for three, and so on. We hold that such an employee is not paid on a salary basis, and thus is entitled to overtime pay.”

The court’s ruling upholds a U.S. 5th Circuit Court of Appeals decision that the amount of Hewitt’s compensation didn’t satisfy FLSA rule that allowed so-called daily-rate workers to be paid on a salary basis. That court’s decision overturned an earlier decision that found Hewitt was being paid on a salary basis and thus was not due overtime pay.

Kagan in her opinion noted that Hewitt’s compensation did not meet the conditions of that rule, “which focuses on workers whose compensation is ‘computed on an hourly, a daily or a shift basis.’”

In a dissenting opinion by Justice Brett Kavanaugh, who was joined by Justice Samuel Alito, under federal labor regulations, “an employee who performs executive duties and earns at least $100,000 per year with a ‘predetermined’ weekly salary of at least $455 for any week that he works is a bona fide executive and not entitled overtime.”

He added that the regulations “readily qualified” Hewitt as “bona fide executive.”