Federal Appeals Court Hands Down Important Ruling in Overtime Exemption Lawsuit
A federal appeals court earlier this year handed down an important ruling in an unpaid overtime lawsuit brought by a plaintiff who claims that his employer violated various provisions of federal wage and hour laws, including failure to pay overtime.
With the Fifth Circuit Court of Appeals’ ruling, employers will no longer be able to satisfy the salary basis component required to qualify an employee as overtime-exempt under federal wage and hour laws.
According to the unpaid overtime lawsuit, filed in U.S. District Court for the Southern District of Texas, the defendant Helix Energy Solutions Group violated the Fair Labor Standards Act (FLSA) when the company failed to pay the plaintiff his premium overtime wages.
Under the FLSA, employers must pay overtime-eligible workers premium overtime wages calculated at one and a half times their average hourly rate of pay for the time spent working past the 40-hour per workweek overtime threshold.
The plaintiff’s lawsuit claimed that he was improperly classified as overtime exempt when Helix Energy Solutions paid him a flat daily rate, regardless of the number of hours he put into his job each week.
The plaintiff claimed that he regularly worked more than 40 hours in a week on an oil rig but was not compensated with any additional premium overtime pay.
Helix Energy Solutions claimed that the company satisfied the salary requirements for the plaintiff to be overtime exempt when they paid him a daily salary because his weekly pay was greater than the minimum required under the FLSA.
While the trial court agreed with the defendant and dismissed the plaintiff’s case, the Fifth Circuit Court of Appeals rejected Helix Energy Solutions’ argument on appeal that it satisfied the criteria to classify the plaintiff as an independent contractor.
By ruling in favor of the plaintiff, the Fifth Circuit Court of Appeals, which covers Louisiana, Mississippi, and Texas, now brings its interpretation in line with the Sixth Circuit, which covers Kentucky, Michigan, Ohio, and Tennessee.