FLSA Day Rate and Salary

In the case of Helix Energy Solutions Group, Inc. v. Hewitt, No. 21-984, the United States Supreme Court ruled on February 22, 2023, in a 6-3 decision that an oil rig executive who made over $200,000.00 annually was not exempt from overtime requirements of the Fair Labor Standards Act (“FLSA”) under 29 C.F.R. § 541.602(a).

Under the FLSA, employees who (1) primarily perform “executive,” “administrative,” and “professional” duties, (2) are paid on a “salary basis”, and (3) are paid the minimum weekly “salary amount” are exempt from the FLSA’s minimum wage and overtime requirements. All three requirements must be met for the exemption to apply. A similar exemption exists for “Highly Compensated Employees” who perform a mixture of the duties in (1) and for whom (2) and (3) apply. The question in Hewitt was whether an employee paid on a “daily rate” of [amount] qualified as exempt as either an “executive” or a “Highly Compensated Employee.”

The Supreme Court held that even high-earning employees who perform executive duties are entitled to overtime payment when their compensation is based solely on a daily rate of pay “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 further ruled that the employee was not an executive exempt from overtime under the FLSA because “daily-rate workers, of whatever income level, qualify as paid on a salary basis only if the conditions set out in” the exemption rule are met. The Court concluded that because the employee was not guaranteed to be paid a predetermined rate regardless of time worked, he could not be considered a salaried employee and thus was subject to the overtime requirements of the FLSA.

Employers who employ executives, administrative, and professional employees should review their existing compensation structures and practices and be sure to comply with the overtime requirements of the FLSA and 29 C.F.R. § 541.602(a). Pursuant to the Court’s holding in Hewitt, employees will be entitled to overtime should they work more than 40 hours a week if they are paid solely based on a daily rate that is dependent on the amount of hours worked. McMahon Berger, P.C. will continue to monitor developments concerning overtime requirements under the FLSA and Department of Labor Regulations and provide updates as they occur.


The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters for over sixty years and are available to discuss these issues and others. As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.