Helix Energy Solutions Group, Inc. v. Hewitt
The Supreme Court ruled that a highly paid offshore oil rig supervisor was entitled to overtime pay because his employer paid him by the day rather than through a guaranteed weekly salary.
The decision establishes that workers paid on a daily-rate basis cannot be classified as exempt salaried executives under federal overtime rules — no matter how large their annual income.
“A worker paid by the day or hour—docked for time he takes off and uncompensated for time he is not needed—is usually understood as a daily or hourly wage earner, not a salaried employee.”
The majority explains why daily-rate pay does not fit the ordinary meaning of a 'salary' under the overtime regulations.
How it got here: A federal district court granted summary judgment to Helix; the Fifth Circuit sitting en banc reversed; Helix asked the Supreme Court to step in and the Court agreed to hear the case.
The Case in Depth
What happened
Michael Hewitt worked as a "tool-pusher" — an on-site supervisor — on an offshore oil rig for Helix Energy Solutions Group from 2014 to 2017, typically putting in 84 hours a week during 28-day stints aboard the vessel. Helix paid him a daily rate ranging from $963 to $1,341, with no overtime, yielding over $200,000 a year. After leaving the job, Hewitt sued for unpaid overtime under federal law. Helix responded that Hewitt was exempt as a highly compensated executive.
The question before the Court
Does a highly paid employee who earns over $200,000 a year but is paid on a day-by-day basis qualify as a salaried executive exempt from federal overtime requirements?
The Court's answer
No — a highly paid employee who is compensated solely on a daily rate is not paid on a "salary basis" under federal overtime regulations, and is therefore entitled to overtime pay under the Fair Labor Standards Act.
The key regulation requires employees to receive a fixed, predetermined weekly amount regardless of how many days they actually worked. A daily-rate worker's paycheck is inherently tied to the number of days worked — the opposite of what the regulation demands. A separate regulatory pathway does allow daily-rate pay to count as a salary, but only if the employer also guarantees a minimum weekly payment bearing a reasonable relationship to usual earnings. Because Helix never provided that guarantee, Hewitt's daily-rate pay could not qualify as a salary under either route, leaving him entitled to overtime compensation.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Workers in shift-based or per-day industries — oil rig workers, traveling nurses, and similar employees — can now claim overtime even if they earn far above minimum wage, as long as they lack a guaranteed weekly salary. Employers who rely on daily-rate pay structures must either convert to true weekly salaries or add a guaranteed weekly minimum payment to keep workers in the overtime exemption.
What changes now
Hewitt and similarly situated daily-rate workers at Helix are entitled to seek overtime compensation under the Fair Labor Standards Act. The decision is final on the salary-basis question, but both dissents flagged an unresolved issue: whether the Labor Department's salary-basis regulations are themselves consistent with the FLSA statute, which focuses on employees' duties rather than their pay structure. That question remains open for future litigation in the lower courts.
What this does not decide
The ruling does not decide whether the Labor Department's salary-basis regulations are themselves valid under the Fair Labor Standards Act — a challenge Helix raised at argument but had forfeited in the courts below, and which both dissenting opinions flagged as still open. The Court also left unresolved the original question about how the HCE rule and §604(b) interact when §602(a) is independently satisfied.
Concurrences and dissents
Dissent — Justice Gorsuch
Justice Gorsuch would have dismissed the case as improvidently granted rather than decide it. He argued that the question the Court actually answered — whether Hewitt was paid on a salary basis under §602(a) — was not the question the Court agreed to hear, and that Helix had actively downplayed the §602(a) issue in its briefing. He also noted that Helix had forfeited a potentially foundational argument that the salary-basis regulations are inconsistent with the statute itself, which was an additional reason to leave the case for another day.
Dissent — Justice Kavanaugh
Justice Kavanaugh, joined by Justice Alito, would have held that Hewitt was a bona fide executive not entitled to overtime. His core argument: because Hewitt's daily rate ($963) exceeded the weekly salary floor ($455), he was by definition guaranteed at least $455 for any week he worked — satisfying the salary-basis test. Kavanaugh also argued §604(b)'s two-thirds requirement does not apply to highly compensated employees, and he flagged as an open question whether the salary-basis regulations are even consistent with the FLSA, which he read as focused on employee duties rather than pay structure.
How the Court got there
The legal reasoning, step by step
- The Court focused on §602(a) of the Labor Department's regulations — the main rule defining what it means to be paid 'on a salary basis,' which is a required condition for the 'bona fide executive' exemption that strips away overtime rights. Both parties agreed this was the decisive issue, since Hewitt conceded every other part of the exemption test.
- Section 602(a) says an employee is paid on a salary basis only if he receives his 'full salary for any week in which he performs any work without regard to the number of days or hours worked.' A daily-rate worker's paycheck is always a product of counting the days he put in — by definition the opposite of a payment made 'without regard' to those days. No matter how high the daily rate, the pay is never a 'predetermined amount' for the week; it can only be computed after the week ends.
- The ordinary meaning of 'salary' reinforces this: a salary is a steady, fixed sum paid weekly, monthly, or annually — distinct from wages that fluctuate with time actually worked. The 'weekly basis' phrase in §602(a) describes the unit used to calculate pay (a week), not merely how often a paycheck is physically handed over, consistent with how every neighboring regulation uses the word 'basis.'
- The structure of the regulations confirmed the text. A separate provision, §604(b), exists precisely to address workers whose pay is 'computed on an hourly, a daily or a shift basis.' It allows such pay to count as a salary — but only if the employer also guarantees the worker at least $455 each week regardless of days worked. If §602(a) already covered daily-rate workers, §604(b)'s strict conditions would be pointless. Reading the two provisions as covering non-overlapping groups — weekly-rate workers under §602(a), daily- and hourly-rate workers under §604(b) — gives each regulation independent meaning.
- Helix argued the highly compensated employee (HCE) rule, which applies to workers earning over $100,000 a year, incorporates only §602(a) and not §604(b). The Court rejected this because both the HCE rule and the general rule (for lower earners) define the salary-basis requirement in identical language. The only real difference between the two rules is in the duties test — more flexible for high earners — not in how salary basis is defined. Both §602(a) and §604(b) therefore apply under either rule.
- Finally, the Court dismissed Helix's policy arguments — that the ruling would give 'windfalls' to high earners and impose retroactive costs — because even strong policy concerns cannot override clear regulatory text. The Court also noted that Helix's own reading would be more troubling: it would strip overtime rights from many lower-paid daily-rate workers (like nurses working per-shift) who satisfy the general rule's duties test, a result at odds with the whole purpose of the overtime law.