Hewitt v. Helix Energy Solutions Group, Inc., No. 19-20023 (5th Cir. 2021)Annotate this Case
Under 29 C.F.R. 541.601, a highly compensated employee must be paid on a "salary basis" in order to avoid overtime. Under section 541.604(b), an employee whose pay is "computed on a daily basis" must meet certain conditions in order to satisfy the salary-basis test. A daily-rate worker can be exempt from overtime—but only "if" two conditions are met: the minimum weekly guarantee condition and the reasonable relationship condition.
In this case, Helix claims that plaintiff is exempt from overtime as a highly compensated executive employee under section 541.601. The parties agree that Hewitt meets both the duties requirements and income thresholds of both exemptions. However, Hewitt admits that plaintiff's pay is computed on a daily basis, rather than on a weekly, monthly, or annual basis.
The court concluded that Helix does not comply with either prong of section 541.604(b) where it pays plaintiff a daily rate without offering a minimum weekly required amount paid and Helix does not comply with the reasonable-relationship test. The court also concluded that there is no principled basis for applying or ignoring section 541.604(b) based on how much the employee is paid; the salary-basis test does not conflict with precedent; and the court rejected Helix's contention that extending overtime to highly-paid employees like plaintiff defies the purpose of the Fair Labor Standards Act.
This opinion or order relates to an opinion or order originally issued on April 20, 2020.