Update: Supreme Court Weighs in on Overtime Pay Under the FLSA

Drilling rig

Way back in January 2021 (see here) I wrote about a contentious panel opinion from the Fifth Circuit deciding whether highly compensated “tool pushers” were entitled to overtime pay under the Fair Labor Standards Act (“FLSA”).  Over Judge Weiner’s fiery dissent, the panel held that such employees were entitled to overtime.  See Hewitt v. Helix Energy Sols. Grp. Inc., 983 F.3d 789 (5th Cir. 2020).

In September 2021, the entire Fifth Circuit considered this case, which I wrote about here.  By a vote of 12-6, the full Fifth Circuit agreed with the original panel that such employees were not exempt from FLSA’s overtime provisions.  See Hewitt v. Helix Energy Sols. Grp. Inc., 15 F.4th 289 (5th Cir. 2021) (en banc).

On May 2, 2022, the U.S. Supreme Court decided to hear that case and late last month they issued their opinion.  See Helix Energy Sols. Grp., Inc. v. Hewitt, No. 21-984, 2023 U.S. LEXIS 944 (U.S. Feb. 22, 2023).  In a 6-3 decision, Justice Kagan (joined by Chief Justice Roberts and Justices Thomas, Sotomayor, Barrett, and Jackson) affirmed the Fifth Circuit’s decision holding that tool pushers were entitled to FLSA overtime.  Ultimately, the Supreme Court’s decision hinged on its determination that Helix did not pay Hewitt on a “salary basis” because he was not paid by the week or a longer period of time.  He was paid at a daily rate.  While the daily rate was high, the nature of his pay still entitled him to overtime.

Thus ends the long saga of this case.  Time will tell if this decision changes how oil patch workers are paid, or merely gives employers a roadmap of how to structure pay to avoid overtime.  As always, stay tuned.  I’m sure more cases will arise in this area.

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