IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 19-20023 United States Court of Appeals Fifth Circuit

FILED MICHAEL J. HEWITT, April 20, 2020 Lyle W. Cayce Plaintiff - Appellant Clerk v. HELIX ENERGY SOLUTIONS GROUP, INCORPORATED; HELIX WELL OPS, INCORPORATED,

Defendants - Appellees

Appeal from the United States District Court for the Southern District of Texas

Before WIENER, HIGGINSON, and HO, Circuit Judges. JAMES C. HO, Circuit Judge: A panel of this court recently divided over the proper interpretation of a Labor Department regulation issued under the Fair Labor Standards Act (FLSA). See Faludi v. U.S. Shale Sols., 936 F.3d 215 (5th Cir. 2019), opinion withdrawn, 950 F.3d 269 (5th Cir. 2020). Today we revisit the issue initially raised, but ultimately left undecided, in Faludi. The regulation in question defines what it means for an employee to be compensated on a “salary basis”—a requirement that must be met for an employer to qualify for certain exemptions under the FLSA. As the regulation makes clear, an employee is paid on a “salary basis” if he “regularly receives Case: 19-20023 Document: 00515388040 Page: 2 Date Filed: 04/20/2020

No. 19-20023 each pay period on a weekly, or less frequent basis, a predetermined amount”— and if that salary is paid “without regard to the number of days or hours worked.” 29 C.F.R. § 541.602(a), (a)(1). Based on those provisions, the dissent in Faludi concluded that an employee is not paid on a salary basis—and therefore is entitled to the protections of the FLSA—if the employee is paid a daily, rather than weekly, rate. See 936 F.3d at 222 (Ho, J., dissenting). The majority initially disagreed. Id. at 220. But after the employee in Faludi filed a petition for rehearing en banc, the panel majority withdrew its earlier opinion and decided the case on other grounds. See Faludi v. U.S. Shale Sols., 950 F.3d 269, 271 (5th Cir. 2020). The case we decide today presents the same interpretive question that divided our court in Faludi. We hold, consistent with the dissent in Faludi, that an employee who is paid a daily rate is not paid on a “salary basis” under 29 C.F.R. § 541.602(a). Accordingly, we reverse the district court and remand for further proceedings. I. Michael Hewitt was an employee of Helix for over two years, working as a Tool Pusher. In that position, Hewitt managed other employees while on a “hitch”—that is, while working offshore on an oil rig. Each hitch lasted about a month. Helix paid Hewitt a set amount for each day that he worked. Hewitt received his paycheck biweekly. Hewitt worked more than forty hours a week. So under the FLSA, he would ordinarily be entitled to overtime unless he was an exempt employee. 29 U.S.C. §§ 207(a)(1), 213(a)(1). And that is what Helix contends, arguing that Hewitt is either an exempt executive or highly compensated employee. See 29 C.F.R. § 541.100 (executive employees); § 541.601 (highly compensated employees). 2 Case: 19-20023 Document: 00515388040 Page: 3 Date Filed: 04/20/2020

No. 19-20023 Both of those exemptions require the employer to meet both a duties test and a salary test. The salary test, in turn, has two components—first, the employer must pay the employee a minimum per-week rate, and second, the employer must pay the employee on