A recent ruling by the Fifth Circuit has caused a big controversy in the oil and gas industry. In Helix Energy Solutions Group, Inc. v Hewitt, the Fifth Circuit decided that Helix owed an offshore tool pusher time-and-a-half overtime pay because he was compensated on a day-rate basis and not with an annual salary. The tool pusher earned over $200,000 per year. Helix argued that the tool pusher was exempt from overtime pay under the Fair Labor Standards Act because of the size of his annual earnings and the nature of his supervisory role.
The Fifth Circuit disagreed and held that the day rate used to compensate the tool pusher did not fall within the exceptions to overtime pay in the FLSA.
The United States Supreme Court has agreed to hear an appeal of the Fifth Circuit’s ruling because there is now a split between the federal circuit courts as to how the FLSA should be interpreted.
If you are an employee who receives day-rate pay but are required to work more than 40 hours per week, the opinion of the Supreme Court will likely impact whether you are entitled to back overtime pay. If you are an employer who pays highly compensated employees on a day-rate basis, watch the outcome of the Helix case in the Supreme Court.