Helix Energy Solutions Group, Inc. v. Hewitt

Helix Energy Solutions Group paid offshore oil rig supervisor Michael Hewitt a daily rate exceeding $963 with no guaranteed weekly minimum. Hewitt sued for unpaid overtime under the Fair Labor Standards Act, claiming he was not paid on a “salary basis” and thus not exempt. The company argued he fell under the exemption for highly compensated executive employees. The district court and the Fifth Circuit ruled for Hewitt, holding that a day-rate worker cannot satisfy the salary-basis test. The U.S. Supreme Court reversed in a 6-3 decision, holding that the plain regulatory text defines a salary as a predetermined amount “not subject to reduction because of variations in the quality or quantity of the work performed,” and Hewitt’s daily rate met that standard. The case was remanded for further proceedings.

In a 6-3 decision authored by Justice Elena Kagan, the Supreme Court reversed the Fifth Circuit, ruling that Hewitt’s guaranteed daily rate satisfied the regulatory definition of a salary. The Court clarified that the regulation does not require an additional weekly salary guarantee. The case was remanded for the lower courts to assess the remaining exemption criteria.

Whether a high-earning employee paid solely on a daily rate, without any guaranteed minimum weekly salary, is compensated on a “salary basis” under 29 CFR §541.602(a) and thus qualifies for the Fair Labor Standards Act’s white-collar overtime exemption.

The decision provided significant clarity for employers in offshore energy and other day-rate industries, affirming that a predetermined daily rate can meet the salary-basis test for white-collar overtime exemptions. It reduced litigation uncertainty while prompting concerns that it may encourage broader use of day-rate pay to circumvent overtime obligations. Employee advocates warned that the ruling could weaken FLSA protections for highly compensated workers.