Helix Energy Solutions Group v. Hewitt
Overview
Overview
A highly paid offshore oil rig worker received a daily rate of pay rather than a predetermined salary and sought overtime compensation under the Fair Labor Standards Act. The Supreme Court held 6-3 that the FLSA's highly compensated employee exemption requires payment on a salary basis, meaning a predetermined fixed weekly amount, and that payment by a daily rate does not satisfy the salary basis test even for very high earners.
The Facts
Facts
Michael Hewitt worked for Helix Energy Solutions as a toolpusher on offshore oil rigs, earning over $200,000 annually paid as a daily rate rather than a fixed weekly salary. He sued for overtime pay under the FLSA. Helix argued he was exempt as a highly compensated employee. The Fifth Circuit held the daily rate did not satisfy the salary basis test.
The Issue
Issue
Whether an employee paid a daily rate that results in compensation exceeding $100,000 annually is exempt from FLSA overtime requirements as a highly compensated employee, even though the employee is not paid on a salary basis as defined in DOL regulations.
The Rules
Rule
The FLSA's white collar exemptions, including the highly compensated employee exemption, require that the employee be paid on a salary basis: a predetermined amount per week that is not subject to reduction based on quality or quantity of work. Payment by the day does not qualify as salary basis compensation regardless of the total annual amount earned.
The Application
Analysis
Hewitt's case presented the central question of whether sufficiently high total compensation could overcome the salary basis requirement: although he earned over $200,000 annually, his compensation was structured as daily rates rather than a predetermined weekly salary. The Court applied the salary basis requirement categorically, holding that payment-by-the-day arrangements cannot satisfy the exemption regardless of annual totals, and therefore Hewitt's daily rate structure disqualified him from the highly compensated employee exemption as a matter of law. This structural approach prevented Helix from using the magnitude of Hewitt's earnings to escape the foundational requirement that exempt employees receive compensation calculated on a fixed weekly basis.
The Conclusion
Conclusion
Helix Energy Solutions v. Hewitt confirmed that the salary basis requirement applies to the highly compensated employee exemption and cannot be satisfied by daily rate pay arrangements. The ruling affects employers in industries such as oil and gas, construction, and professional services who compensate high earners through day rates rather than fixed weekly salaries, exposing them to potential overtime liability.
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