Michael Hewitt supervised workers on an offshore oil rig and was paid a daily rate that added up to more than $200,000 a year. His employer treated him as an exempt executive and paid no overtime. On February 22, 2023, the Supreme Court held that he was not paid on a salary basis. A salary means a set amount for each week no matter how many days are worked. A day rate, by definition, rises and falls with the days. Without a salary basis, the executive exemption could not apply, however high the total pay. The Court noted one narrow exception. A day rate can count as a salary if the employer also guarantees a weekly amount at least equal to the required salary level and reasonably close to what the worker usually earns. Helix admitted it had not done that.
The decision matters far beyond oil rigs. Day rates are common in construction, demolition, moving, landscaping, restaurants, and car services. Under Helix, a day-rate worker who put in more than 40 hours in a week is generally owed overtime, and the employer cannot avoid that by pointing to a supervisory title or a large annual total.
- A day rate paid in cash is still a day rate.
- The overtime math for a day-rate worker depends on the hours actually worked each week; a lawyer works it out week by week.
- New York and New Jersey law apply the same principle and reach back further than federal law.
This is a decision in another matter. Usher Law Group did not handle the case, and this summary is general information only.
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