Hunton Employment & Labor Perspectives

On May 2, 2022, the Supreme Court granted certiorari to Helix Energy Solutions Group Incorporated after Helix lost before the en banc United States Court of Appeals for the Fifth Circuit in a sharply-divided opinion last year.  In Hewitt v. Helix Energy Solutions Grp., Inc., 15 F.4th 289 (5th Cir. 2021), the Fifth Circuit held 12-6 that employers must guarantee their day-rate workers a minimum weekly payment that is reasonably related to the amount those workers actually earn in that timespan for their workers to be exempt from the FLSA’s overtime requirements.  This minimum weekly payment must be a predetermined amount that does not change based on the number of days or hours actually worked, if the employer wishes to enjoy the FLSA’s exemptions to paying its day-rate workers overtime.

This high-profile case had already captured the attention of employers utilizing contractors throughout the Fifth Circuit, especially throughout the oil and gas industry.  Now, the high court will weigh in on whether employers must comply with the minimum weekly payment and reasonable relationship requirements for their day-rate workers to be exempt from the FLSA’s overtime protections.

Employers throughout the country, and especially those operating in the oil and gas industry, should closely monitor this pending ruling.  As the amici explained, oil and gas companies have utilized exempt day-rate workers as common practice for decades, and imposing these arguably-additional requirements on employers departs from this long-accepted practice.  Should the Court affirm the Fifth Circuit, employers across industries and judicial districts will have to alter their pay practices—likely on a large scale.  Employers should work closely with counsel to ensure they are meeting all current FLSA exemption requirements until the Supreme Court hears this case, and to ensure compliance with the Court’s eventual ruling.

Helix has secured highly-respected Supreme Court advocate Paul Clement to present its case to the Court.  The case is Helix Energy Solutions Group Inc. v. Hewitt, U.S. Supreme Court, No. 21-984.