In Pickens v. Hamilton-Ryker IT Solutions, the U.S. Court of Appeals for the Sixth Circuit determined that paying a guaranteed weekly amount is not enough to make an employee “salaried” and exempt from the Fair Labor Standards Act’s overtime requirements. The case involved an employee who was paid a guaranteed $800 per week for any week in which he worked and $100 per hour for all hours worked over eight in any workweek. The employee averaged 52 hours a week, or $270,400 annually, and the employer classified him as a salaried exempt employee.
The employee filed suit for FLSA violations, arguing that he essentially was an hourly worker entitled to overtime pay. The Sixth Circuit relied on the U.S. Supreme Court’s recent decision in Helix Energy Solutions Group v. Hewitt to determine that the employee was paid on an hourly basis. According to the court, being paid on a salary basis under the FLSA means receiving a fixed, predetermined amount each pay period regardless of the quantity of work performed. The court noted that because the employee’s total weekly pay varied depending on his hours worked in excess of the initial eight hours, it did not function as a true salary. The ruling emphasizes that high compensation does not guarantee exemption from the FLSA’s overtime requirements.
From ASA: Hamilton-Ryker Statement
In a statement, Hamilton-Ryker chief executive officer Kelly McCreight responded: "As Judge Murphy aptly explained in his dissent, the plain text of the U.S. Department of Labor’s regulation defining what it means to be paid on a salary basis only mandates that part of an employee’s pay each week consist of a predetermined amount, regardless of the amount of work performed. Given that Hamilton-Ryker’s pay practices met these requirements, we respectfully disagree with the panel’s decision. Hamilton-Ryker is considering all available avenues for potential additional review of the panel’s decision to ensure its position is fully evaluated."
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