The U.S. Supreme Court is set to make a decision regarding overtime for workers earning over $200,000 annually. Specifically, the court is examining whether federal wage and hour laws regarding mandatory overtime were meant to protect those earning six figures, even if they are hourly employees performing over 40 hours of work in a workweek.
How the case progressed
The case was brought into District Court by an oil rig worker who argued his employer owed him overtime per the Fair Labor Standards Act after he worked in excess of a 40-hour workweek. The worker argued that the FLSA entitled him to overtime because he was paid a daily rate, not a guaranteed weekly salary.
The District Court ruled that the worker was not exempt from the FLSA’s overtime rules. The Court of Appeals agreed.
The case was heard by the Supreme Court
The case eventually made its way to the Supreme Court. The Supreme Court noted that executive, administrative and professional workers are exempt from the FLSA’s overtime requirement.
Some Justices opined that the worker was not a salaried worker, and that the FLSA was meant to make sure workers were paid a predetermined amount. Other Justices opined that “common sense” indicated that a worker making hundreds of thousands a year could not be considered a day laborer covered by the FLSA.
The Court has yet to issue its final ruling on the case.
What does this mean for small businesses?
Small business owners in Oregon may not be paying workers $200,000 annually, but they should still be aware that many hourly workers are subject to federal overtime laws. Failing to pay overtime when it is due can cause many legal headaches and puts an employer in a difficult position. It is better to pay what is owed in overtime rather than trying to avoid paying workers covered by the FLSA what they are due.