Helix Energy Solutions Group, Inc. v. Hewitt
The Supreme Court ruled that an oil rig worker earning over $200,000 a year was still entitled to overtime pay, because his employer paid him a daily rate rather than a fixed weekly salary — and that distinction is what federal labor law turns on.
The decision makes clear that high income alone cannot substitute for the specific pay structure the law requires: even very well-paid workers who are compensated by the day retain the right to overtime unless their employer meets strict salary-guarantee rules.
How it got here: A federal district court ruled that Hewitt was paid on a salary basis and dismissed his overtime claim; the Fifth Circuit en banc reversed; the Supreme Court agreed to hear the case and affirmed the Fifth Circuit.
The Case in Depth
What happened
Michael Hewitt worked as a "toolpusher" supervising a crew of 12 to 14 people on an offshore oil rig for Helix Energy Solutions Group, typically logging 84 hours a week. Helix paid him a daily rate — between $963 and $1,341 per day — with no overtime, so his paycheck varied with exactly how many days he worked. He earned more than $200,000 a year. After being fired, Hewitt sued Helix for overtime pay under federal labor law.
The question before the Court
Does a highly paid worker — earning over $200,000 a year — lose his right to overtime pay if he is paid by the day rather than a fixed weekly salary?
The Court's answer
No — a daily-rate worker, no matter how highly paid, does not qualify for the overtime exemption simply because his daily rate is large. The key federal regulation on "salary basis" requires that an employee receive a fixed, predetermined amount each week regardless of how many days he worked. Because Hewitt's weekly paycheck varied directly with the number of days he logged — ranging from $963 for a one-day week to $13,482 for a full fourteen-day stretch — his pay was the opposite of a fixed weekly salary.
A separate regulation specifically written for daily- and hourly-rate workers confirms the result: it lets such workers qualify as salaried only if the employer also provides a guaranteed weekly minimum that approximates what the employee usually earns. Helix offered no such guarantee, and Hewitt's high income could not stand in for the salary structure the regulations plainly require.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Companies in oil and gas, nursing, and other industries that pay workers a daily or hourly rate — rather than a fixed weekly salary — will owe overtime pay to those workers even if they earn six figures. Employers who want to claim the executive exemption must either convert daily-rate workers to true weekly salaries or add a guaranteed weekly minimum that meets specific federal conditions.
What changes now
The Fifth Circuit's ruling in Hewitt's favor stands, and he may recover overtime pay from Helix. Going forward, employers who pay daily-rate workers — in oil and gas, healthcare, and other industries — cannot claim the executive overtime exemption unless they restructure compensation to meet the strict salary conditions the regulations set out. The separate question of whether the Labor Department's salary-basis regulations are themselves consistent with the FLSA remains open and was not resolved here.
What this does not decide
The Court did not decide whether the Labor Department's salary-basis regulations are consistent with the FLSA itself — that argument was forfeited by Helix and left open for future cases. Justice Kavanaugh's dissent flagged this as a potentially significant unresolved question about the regulations' validity.
Concurrences and dissents
Dissent — Justice Gorsuch
Justice Gorsuch would have dismissed the case without deciding it, on the ground that the Court took up a question — whether Hewitt was paid on a salary basis under § 541.602 — that was not properly presented in Helix's petition for certiorari. Helix had specifically told the Court that the salary-basis test was not the issue, devoted only about two pages to it in briefing, and even criticized the opposing party for raising it. Justice Gorsuch also noted that Helix's forfeited statutory argument — that the regulations may exceed the FLSA's text — counseled waiting for a better-presented case.
Dissent — Justice Kavanaugh
Justice Kavanaugh argued on the merits that Hewitt did qualify as a bona fide executive exempt from overtime. In his view, Hewitt's guaranteed daily rate of $963 necessarily guaranteed him at least $963 for any week he worked at all — well above the $455 weekly minimum — satisfying the salary-basis test. He also argued that the two-thirds weekly-guarantee requirement in § 604(b) does not apply to highly compensated employees earning over $100,000. As a final point, he flagged that the Labor Department's salary-basis regulations may themselves be inconsistent with the FLSA's focus on employee duties rather than pay method.
How the Court got there
The legal reasoning, step by step
- The central legal question was whether Hewitt was paid on a 'salary basis' under the Department of Labor's main salary-basis regulation (§ 541.602(a)), which is a prerequisite for the 'bona fide executive' exemption from the Fair Labor Standards Act's overtime guarantee. The parties agreed that the salary-level and duties parts of the exemption were satisfied; only the salary-basis question remained.
- Section 602(a) defines salary basis to require that an employee receive a 'predetermined amount' for any week in which he works 'without regard to the number of days or hours worked.' A daily-rate worker's weekly pay is always calculated by counting the days he worked — the exact opposite of what the regulation demands — so daily-rate workers like Hewitt fall outside § 602(a) by its plain text.
- The ordinary meaning of 'salary' reinforces this reading. At the time the salary-basis test was written, and today, a salary referred to fixed compensation paid by the week, month, or year — not pay that goes up or down based on days present. A worker paid strictly by the day or hour is conventionally understood as a wage earner, not a salaried employee.
- The broader regulatory structure seals the conclusion. A separate provision (§ 541.604(b)) was written specifically for daily-, hourly-, and shift-rate workers, and it allows them to qualify as salaried only if the employer also guarantees a minimum weekly payment roughly equal to what the employee usually earns. Reading § 602(a) to also cover daily-rate workers would make § 604(b)'s strict conditions pointless — the two provisions work together only when § 602(a) covers weekly-rate workers and § 604(b) takes over for shorter-rate workers.
- Helix argued that the 'highly compensated employee' (HCE) rule — which applies to workers earning at least $100,000 a year — operates independently of § 604(b), so Hewitt needed only to satisfy § 602(a). The Court rejected this: the HCE rule uses identical salary-basis language as the general rule, so the same two provisions (§ 602(a) and § 604(b)) define 'salary basis' for both. The only difference between the HCE rule and the general rule is a more flexible duties test — not a relaxed salary-basis standard.
- Helix's policy arguments — that the ruling creates windfalls for high earners, disrupts industry operations, and imposes retroactive liability — could not override the regulations' clear text. Congress itself chose not to exempt all highly paid workers from overtime, and the salary-basis test has been part of the regulatory framework since nearly the FLSA's beginnings, so the result should have come as no surprise to employers using daily-rate pay structures.