Big bucks supervisor scores overtime win

Many employers labor under the misconception that a highly paid employee is necessarily exempt from the overtime requirements of the Fair Labor Standards Act (FLSA). After all, the FLSA was enacted in 1938 to protect low wage workers by requiring employers to pay a minimum wage (currently $7.25 per hour) and time and a half for overtime (hours over 40 per week). Certainly, Congress didn’t intend for it to provide a windfall for employees banking $200,000 a year, right? Think again.

The facts

Last month, the U.S. Supreme Court took on this issue. Michael Hewitt was a supervisor on an oil rig, bringing in over $200,000 a year. He worked on rotating 28-day “hitches” (28 days on/28 days off) and was paid $936 per day. And therein lies the rub.

The “white collar” exemptions to the overtime requirements under the FLSA (executive, administrative, and professional) are determined by a three-prong test:

• The employee must be paid on a salaried basis;
• The salary must be at least $684 per week; and
• The employee must perform certain duties, which vary depending on the type of exemption.

Everyone agreed Hewitt earned well above the salary threshold (pulling in a minimum of $936 in any week in which he worked just one day) and that his job satisfied the duties test (supervising 12-24 employees).

Takeaways