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  • Writer's picturePaul F. Keneally

U.S. Supreme Court Ruling Clarifies Overtime Exemption for Highly Compensated Employees

In its recent decision in Helix Energy Solutions Group, Inc. v. Hewitt, the United States Supreme Court ruled that high compensation alone does not ensure exemption from the right to overtime under the Fair Labor Standards Act (“FLSA”).

Employees are frequently referred to as “hourly” and entitled to overtime under the FLSA, or “salaried” and not entitled to overtime under the FLSA. It should be well known by now that being “salaried” is not enough for an FLSA exemption, as the salary must be above the relevant minimum amount and one of the exemption “duties” tests must be met.

In this case, the U.S. Supreme Court dealt with a situation where the employee claiming overtime made over $200,000.00 a year but was paid on a daily basis, not a salaried one. The Court responded by holding that the payment on a salaried basis remains a requirement to be exempt regardless of the amount of compensation received on another basis (in this case by day-rate). Salaried is defined as where the employee receives a “predetermined amount constituting all or part of the employee’s compensation which amount is not subject to reductions because of variations in the quality or quantity of the work performed.”

The “highly compensated” exemption to the FLSA overtime rule remains for those making at least $107,000.00 a year, but only where at least the minimum amount of that compensation ($684 per week) is paid on a salary basis. Also, the employee’s primary duty must include performing office or nonmanual work and the employee must customarily and regularly perform at least one of the exempt duties or responsibilities of an exempt executive, administrative, or professional employee. It is usually not difficult to find one of those exempt duties being performed by a typical office employee.

Employers grappling with any of the subtle FLSA overtime exemptions should consult with their employment attorney or contact Paul F. Keneally at (585) 258-2882 or

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