Paul DeCamp, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC, office, was quoted in HR Dive, in “SCOTUS Ponders: Should a Worker Making $200K Annually Be Overtime-Exempt?” by Ryan Golden.
Following is an excerpt:
Michael Hewitt and his employer, oil and gas company Helix Energy Solutions Group, agree: His duties as a tool pusher meet the description of a bona fide executive, administrative or professional employee under the Fair Labor Standards Act. They agree, too, that Hewitt is paid well for his services, earning more than $200,000 a year.
On the surface, those details alone may seem unlikely to give rise to an employment law dispute played out before the nation’s highest court. And yet, there Helix and Hewitt were on Oct. 12, with the nine justices of the U.S. Supreme Court analyzing a small wrinkle in an otherwise presumably straightforward employment relationship.
Namely, is Hewitt — a worker paid highly on a daily, rather than a weekly, basis — entitled to earn substantially more money in overtime pay? …
The case’s ‘core issue’
Helix involves a circuit split on whether the requirements of the highly compensated employee exemption laid out in 541.601 are in turn subject to the requirements of 541.604(b). The 5th Circuit answered in the affirmative, while the 1st and 2nd Circuits diverged, holding that 541.601 is not subject to 541.604(b)’s requirements.
Arguing for Helix, Clement said 541.601 is not subject to 541.604(b) because 541.601 “doesn’t address salary basis independently,” instead deferring to the definition of salary basis included in 541.602. “But [541.601] does address the issue of minimum guarantee plus extra,” Clement said, duplicating some of 541.604(b)’s provisions while contradicting others.
This speaks to the “core issue” presented in Helix, Paul DeCamp, member of law firm Epstein Becker Green, told HR Dive in an interview. “Helix’s argument here is that you don’t have to satisfy 541.604(b), because the day rate, under the general definition of 541.602, works as a salary just fine.”
Hewitt’s high payment amounts were a focus throughout the Oct. 12 oral arguments, particularly for the court’s conservative wing. Thomas noted that Hewitt’s annual income of some $200,000 would make it difficult to consider him as a “day laborer,” a point made even more salient in the FLSA’s regs; 541.601 states that a high level of compensation “is a strong indicator of an employee’s exempt status, thus eliminating the need for a detailed analysis of the employee’s job duties.”
Potential outcomes in Helix
DeCamp said he expects a win for employer Helix in the case given the court’s composition, but that the final tally of justices is unclear at this time. Additionally, because the case deals with a narrow segment of the FLSA’s regulations involving a specific group of employees, “it probably won’t have a ton of effect on a lot of employers across the country,” DeCamp said.
Still, there is the potential that the justices — either as part of the majority or in a concurrence or dissent — could take a broader view of the administrative issues at play with respect to the FLSA’s regs and the law’s statute. …
Should the justices decide to weigh in on this aspect of the case, “that’s where things could get interesting,” DeCamp said. He noted that the court has shown a willingness to tackle the subject of administrative rulemaking in recent cases such as West Virginia v. EPA, where it held that Congress did not grant the Environmental Protection Agency authority to devise certain emission caps.
“If I were betting, I’d expect that the analysis in the case will be pretty much exclusively focused on the regs and which reading of the regs is more correct,” DeCamp said. But, he said, a deeper dive into the FLSA could help to indicate — among other things — how the court may shift its approach toward interpreting and deferring to agency rulemaking.
