Supreme Court Hears Case on Overtime for Highly Compensated Employees
Heather Robinson, Herrick litigation partner, spoke to SHRM about the recent Supreme Court case Helix Energy Solutions Group v. Hewitt. This case could directly impact how employers determine which employees are exempt from overtime pay.
The article notes that the Supreme Court is examining whether a former Helix Energy Solutions Group supervisor making over $200,000 annually would still be entitled to overtime pay under the federal Fair Labor Standards Act (FLSA). Under the FLSA, employees who perform executive duties, earn at least $100,000 per year, and receive at least $455 per week paid on a salary basis are exempt from overtime pay. The petitioner claimed he should get retroactive overtime pay because Helix calculated his pay by using a daily rate, and the 5th U.S. Circuit Court of Appeals agreed.
Heather observed, "It's definitely a case of interest, and depending on the outcome, it will add more to the checklist in terms of how employees are classified."
In light of this case, Heather explained that companies should look further at the mechanics of compensation. "We don't know how the court will rule, but there are things employers can do now that would be somewhat protective of them no matter how the court lands," she added. "There are ways to shift the compensation mechanics so you would satisfy the regulations, regardless of the court's final decision."
"If pay right now is really based on a day rate or shift rate or hourly rate, you could take that apart and have a portion of that paid weekly or biweekly and disentangle the pay from the day rate or the shift rate," Heather concluded.