Highly compensated day-rate offshore worker entitled to overtime

A tool pusher earning more than $200,000 a year was entitled to overtime pay because the day rate he received didn’t qualify as a “salary” under the Fair Labor Standards Act (FLSA), according to a recent en banc decision (meaning all the judges rather than a panel of three heard the case) from the 5th Circuit, which covers Louisiana and Mississippi employers. The ruling highlights the importance of ensuring employees classified as exempt from getting overtime pay meet all of the requirements (including payment on a “salary” basis if applicable) for the claimed exemptions. To avoid a costly mistake, regularly review your pay practices and make modifications as needed.

Brief primer on FLSA

The FLSA mandates overtime pay at one and one-half times the employee’s regular hourly rate for any person who works more than 40 hours in a seven-day workweek. There are several exemptions to the overtime requirements, the details of which are set forth in regulations issued by the U.S. Department of Labor (DOL). The most common are the “white-collar” exemptions for executive, administrative, and professional employees as well as the exemption for workers who are properly classified as not being entitled to overtime regardless of the number of hours they worked.