Helix Energy Solutions Group, Inc. v. Hewitt
Headline: High-paid daily-rate workers can seek overtime: Court rules daily-rate pay is not a weekly salary unless strict special-rule guarantees apply, making such workers eligible for overtime pay.
Holding: The Court held that a worker paid only by the day is not treated as paid on a weekly salary under the main salary rule, and so daily-rate employees are eligible for overtime unless the special weekly-guarantee conditions are satisfied.
- Daily‑rate workers may qualify for overtime pay even if they earn high annual pay.
- Employers must guarantee weekly pay or pay overtime or change pay systems for similar workers.
- Some employers may face retroactive overtime liability for past daily‑rate pay practices.
Summary
Background
Michael Hewitt worked as a toolpusher on an offshore rig from 2014 to 2017, typically about 84 hours per week during 28-day work hitches. Helix, his employer, paid him a daily rate (between about $963 and $1,341) and issued paychecks every two weeks that simply multiplied days worked by the daily rate, yielding over $200,000 in annual pay. Hewitt sued for overtime under the Fair Labor Standards Act; Helix said he was exempt as a “bona fide executive” because of how he was paid. The lower courts split: the district court sided with Helix, the Fifth Circuit reversed, and the Supreme Court granted review.
Reasoning
The Court focused on whether Hewitt was “paid on a salary basis” under the Department of Labor rules. The main rule requires a predetermined weekly (or less frequent) salary that does not vary with days worked. A separate special rule covers hourly, daily, or shift pay but only if the employer also guarantees a weekly amount approximating usual earnings. Helix admitted it did not meet that special-rule guarantee. Reading the rule text and structure together, the Court held that the main salary rule applies to weekly-rate pay, not daily-rate pay, so daily-rate workers qualify as salaried only if the special-rule conditions are satisfied. Because Helix conceded it did not meet the special rule, Hewitt was not exempt and could recover overtime.
Real world impact
The decision means many daily-rate workers — even high earners — can claim overtime unless employers provide the strict weekly guarantees required by the special rule. Employers will need to either offer the guaranteed weekly pay, convert pay systems, or pay overtime for similar workers, which may raise costs and could create retroactive liability for past pay practices.
Dissents or concurrances
Two justices dissented, arguing the regulations should treat Hewitt as meeting the salary test (because his guaranteed daily pay exceeded the weekly minimum) and that the special-rule conditions do not apply to highly compensated employees.
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