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The Supreme Court has ruled that a Helix Energy oil rig worker is entitled to overtime pay

by SuperiorInvest

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

Kent Nishimura | Los Angeles Times | Getty Images

The High Court decided on Wednesday that offshore oil a driller who earned more than $200,000 a year—and whose company classifies him as a “bona fide executive”—is entitled to overtime pay for working more than 40 hours a week.

Lawyer for Helix Energy Solutions Group claimed in October that worker Michael Hewitt was not entitled to it overtime under Fair Labor Standards Actdespite the fact that regularly he worked 84 hours a week on platforms.

“This decision could result in a huge windfall for workers in various occupations,” he said Lou Pechmana New York employment attorney who has handled more than 300 cases involving the FLSA, but who was not involved in this case.

“The Supreme Court has sent a message to all workers paid on a daily basis that they are entitled to overtime after 40 hours,” Pechman said.

In Wednesday’s 6-3 ruling, the Supreme Court noted that the case hinged on whether Hewitt, whose job is called a tool shifter, was paid on a salary basis.

The majority opinion, written by Justice Elena Kagan, noted that Hewitt’s biweekly pay equaled his daily wages multiplied by the number of days he worked in the pay period.

“The question is whether a high-earning employee is being compensated on a ‘salary’ basis when his pay is based only on a daily rate – so he gets a certain amount if he works one day a week, twice as much for two days, three times as much for three, and so on further,” Kagan wrote.

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

The federal district court judge that first heard the case agreed with Helix, finding that Hewitt was paid on a salary basis and therefore not entitled to overtime pay.

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The US 5th Circuit Court of Appeals overturned the decision. She said Helix Energy’s compensation for Hewitt did not meet a special FLSA rule that allowed so-called day workers to be paid on a salary basis.

In its ruling on Wednesday, the Supreme Court upheld the decision of the Court of Appeal. The majority opinion said that “Hewitt was not an executive exempt from the FLSA’s guarantee of overtime pay” and that “daily rate workers, regardless of income level, qualify as being paid on a salary basis only if the conditions set forth in” the special rule are met are fullfilled.

Kagan noted in her opinion that Hewitt’s compensation did not meet the terms of that special rule, “which targets workers whose compensation is “calculated on an hourly, daily or shift basis.”

Two justices, Brett Kavanaugh and Neil Gorsuch, filed dissenting opinions.

In his dissent, joined by Justice Samuel Alito, Kavanaugh noted that Hewitt had a daily predetermined minimum wage of $963 per day. And under federal labor regulations, Kavanaugh added, “an employee who performs executive duties and earns at least $100,000 annually with a ‘predetermined’ weekly salary of at least $455 for each week worked is a bona fide executive and is not entitled to over time. “

“Under these regulations, Hewitt easily qualified as a bona fide executive,” Kavanaugh wrote. “As everyone agrees, Hewitt performed executive duties, earned about $200,000 a year, and received a predetermined salary of at least $963 a week for each week he worked.”

In his extremely brief two-page opinion, Gorsuch said he would dismiss the case as “improvidently approved” by the Supreme Court.

Gorsuch wrote that the court allowed Helix to appeal the lower court’s ruling on the expectation that the question to be determined was “what regulations certain well-paid employees must meet to qualify for the overtime pay exception.”

“Unfortunately, this case does not address the issue as we had hoped,” Gorsuch wrote. “By benefit of briefing and argument, it appears that the ‘critical question’ is not how the two sections of the FLSA interact, he wrote.

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

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