Federal ‘FLSA’ law provides for overtime pay at the rate of one and a half times the regular salary of an employee for each hour worked over 40 hours in a 7-day working week. There are several exemptions to the FLSA’s overtime pay conditions, the trifles of which are set out in the regulations issued by the U.S Department of Employment. The most usual is the so-called ‘white-collar exemptions’ which require some supervisors, professionals, and employers to exercise discretion and independent judgment on important matters relating to business management.

To qualify for the White Collar Discount, FLSA requires that employees:

• Must pay at least 4 684 per week;
• Satisfied with the duty test applicable for exemption;
• Such minimum payments are made to the employee on a guaranteed ‘salary basis’.
• The Department of Labor Regulations also provides for a comfortable ‘duty’ test for certain high-paid employees who are paid total annual compensation of 107,432 or a little more.

Background of En Banc Decision:

The details of the case are as follows: the employee was hired to work on his offshore drilling rig at a daily minimum rate of $ 963 – resulting in more than $ 200,000 per year. Hewitt claimed he was entitled to overtime compensation under the FLSA, and claimed that he was exempt from the FLSA’s overtime requirement under the waiver for highly paid executives. It was undeniable that satisfied the duty and income margins for that discount; However, there was controversy over whether Hewitt was paid “on a salary basis”.