The US Supreme Court has ruled that a highly paid executive (over $200,000/year) gets overtime under the FLSA. Under the regulations, an employee falls within the “bona fide executive” exemption only if (among other things) he is paid on a “salary basis.”

The question raised was whether a high-earning employee is compensated on a “salary basis” when his paycheck is based solely on a daily rate—so that he receives a certain amount if he works one day in a week, twice as much for two days, three times as much for three, and so on. The Court held that such an employee is not paid on a "salary basis," and thus is entitled to overtime pay. Helix Energy v. Hewitt (02/22/2023) (6-2 on the merits, with one Justice saying the Court should not have decided the case at all) [PDF].

Michael Hewitt worked for Helix on an offshore oil rig, typically working 84 hours a week while on the vessel. Helix paid Hewitt on a daily-rate basis, with no overtime compensation. The daily rate ranged, over the course of his employment, from $963 to $1,341 per day. His paycheck, issued every two weeks, amounted to his daily rate times the number of days he had worked in the pay period. So if Hewitt had worked only one day, his paycheck would total (at the range’s low end) $963; but if he had worked all 14 days, his paycheck would come to $13,482.

The Court said: "Helix did not pay Hewitt on a salary basis as defined in §602(a). That section applies solely to employees paid by the week (or longer); it is not met when an employer pays an employee by the day, as Helix paid Hewitt. Daily-rate workers, of whatever income level, are paid on a salary basis only through the test set out in §604(b) (which, again, Helix’s payment scheme did not satisfy)."