The Supreme Court docket guidelines employees on a Helix Power oil rig are entitled to extra time pay

The United States Supreme Court on Captiol Hill photographed on Tuesday February 21, 2023 in Washington, DC.

Kent Nishimura | Los Angeles Times | Getty Images

The Supreme Court ruled Wednesday that a worker on an offshore oil rig who makes more than $200,000 a year – and whose company classifies him as a “good faith executive” – ​​is entitled to overtime pay if he works more than 40 hours worked per week.

A lawyer for Helix Energy Solutions Group had argued in October that worker Michael Hewitt was not entitled to overtime under the Fair Labor Standards Act despite regularly working 84 hours a week on the rigs.

“This decision could result in a tremendous windfall for workers in a variety of occupations,” said Lou Pechman, a New York City labor attorney who has worked on more than 300 cases involving the FLSA but on this case was not involved.

“The Supreme Court sent a message to all workers who are paid per diem that after 40 hours of work they are entitled to overtime,” Pechman said.

In a 6-3 ruling Wednesday, the Supreme Court said the case hinged on whether Hewitt, whose job is said to be a tool pusher, was paid on a salary basis.

The majority opinion, written by Judge Elena Kagan, found that Hewitt’s biweekly paycheck equaled his daily pay rate multiplied by the number of days he worked in the pay period.

“The issue here is whether a high-earning worker will be paid on a ‘salary basis’ if his paycheck is based on a daily rate only – that is, if he works one day a week, he gets paid a certain amount, twice as much for two days, three times as much for three and so on,” Kagan wrote.

“We believe that such an employee is not paid on a salary basis and is therefore entitled to overtime pay,” Kagan wrote.

A federal district court judge who first heard the case agreed with Helix’s view, noting that Hewitt was paid on a salary basis and therefore was not due overtime pay.

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The US 5th Circuit Court of Appeals reversed the decision. Helix Energy’s compensation for Hewitt does not comply with a special rule of the FLSA that allows so-called day laborers to be paid on a salary basis.

In its ruling on Wednesday, the Supreme Court upheld the Court of Appeal’s decision. The majority opinion held that “Hewitt was not an executive exempt from the FLSA’s overtime guarantee” and that “workers on daily wages, regardless of earnings level, are not considered to be paid on a salary basis unless the conditions set out in the special rule are met.” .

According to Kagan, Hewitt’s compensation did not meet the conditions of this special rule, “which focuses on workers whose compensation is calculated on an hourly, daily, or shift basis.”

Two judges, Brett Kavanaugh and Neil Gorsuch, submitted dissenting opinions.

Kavanaugh, in his dissent, which was joined by Judge Samuel Alito, noted that Hewitt had a daily set minimum wage of $963 per day. And according to federal labor codes, Kavanaugh added, “An employee who performs managerial responsibilities and earns at least $100,000 per year with a ‘fixed’ weekly salary of at least $455 for each week that he works is a bona fide.” manager and is not entitled to overtime. “

“Under these regulations, Hewitt easily qualified as a bona fide manager,” wrote Kavanaugh. “As everyone agrees, Hewitt held managerial positions, earned approximately $200,000 per year and was paid a predetermined salary of at least $963 per week for each week that he worked.”

Gorsuch, in his extremely brief, two-page statement, said he would dismiss the case as “imprudently granted” by the Supreme Court.

Gorsuch wrote that the court allowed Helix to appeal the lower court’s ruling because it had to determine “what requirements certain well-paid workers must meet in order to qualify for the overtime exemption.”

“Unfortunately, this case does not raise this issue in the way we had hoped,” Gorsuch wrote. “With the benefit of briefing and reasoning, it has become clear that the ‘critical question here’ is not how” two sections of the FLSA interact, he wrote.

New York attorney Pechman, who teaches a course on wage theft at Fordham Law School, said: “This case highlights one of the quirks of the FLSA, in that liability is sometimes based not on how much a worker is paid but on who they are paid.”