Supreme Court confirms that employers must pay the overtime rate to highly compensated “executives”
The Supreme Court recently ruled that the Fair Labor Standards Act (“FLSA”) requires employers to pay the overtime rate to highly compensated employees when those employees work more than 40 hours in a given week – no matter how high the day-rate of pay is for those employees. In that case, Helix Energy Solutions Group, Inc. v. Hewitt, the plaintiff earned more than $200,000 each year based on the daily pay rate. Notably, the plaintiff earned this enormous annual sum despite the employer not paying the requisite overtime rate. The Supreme Court concluded that the employer must pay the overtime rate even though the employer classified the plaintiff as a “bona fide executive” because the employer did not pay the plaintiff a salary within the meaning of the FLSA.
That the Supreme Court has routinely ruled in favor of corporations over individuals in recent years makes this case especially significant. In fact, this landmark decision may have an impact well beyond the facts before the Supreme Court here. In short, we may see the prosecution of more wage theft cases, whether based on employee misclassification as somehow an independent contractor or otherwise. In addition to potentially more collective actions and class actions under Federal law and State law, respectively, the United States Department of Labor and key State attorneys general appear to be expanding their enforcement efforts in this area. The enforcement of Minnesota’s wage theft law by Minnesota Attorney General Keith Ellison illustrates this important development.