Helix Energy Solutions Group, Inc. v. Hewitt

On February 22, 2023, the U.S. Supreme Court decided Helix Energy Solutions Group, Inc. v. Hewitt. Michael Hewitt worked as a toolpusher on an offshore oil rig for Helix, earning a daily rate of at least $963 with no overtime pay. He sued under the Fair Labor Standards Act, claiming he was entitled to overtime because his daily-rate pay did not satisfy the salary basis test for the executive exemption. Helix argued that the high guaranteed weekly pay satisfied the exemption. In a 6-3 decision authored by Justice Elena Kagan, the Court held that daily-rate compensation does not meet the salary basis requirement, regardless of income level, because pay varies with days worked and is not a predetermined weekly salary.

The Supreme Court ruled 6-3 that Hewitt was not exempt; daily-rate pay does not satisfy the salary basis test, so Helix owed overtime compensation.

Whether a highly compensated employee paid on a daily-rate basis meets the salary basis requirement of the FLSA executive exemption from overtime pay.

The decision clarifies that daily-rate compensation, even at high levels, generally fails the salary basis requirement for the FLSA executive exemption. Employers in offshore oil, construction, consulting, and other industries that pay day rates must review pay structures to ensure compliance or risk overtime liability, potentially affecting many workers and wage practices.