Day Rate Workers and Overtime Pay
If you were paid a flat daily rate and worked more than 40 hours a week, federal law likely entitles you to overtime. Most employers calculate it wrong - and most workers never find out.
WORKERS REPRESENTED NATIONWIDE
IN WAGES RECOVERED
CONSULTATION FEE
What Is A Day Rate Worker?
A day rate worker is paid a fixed amount for each day worked, regardless of how many hours that day requires. A worker might earn $300, $500, or $1,200 per day whether they work eight hours or fourteen.
This pay structure is common in oil and gas, construction, film production, transportation, and healthcare staffing.
The way you are paid does not determine whether you are entitled to overtime. What matters under federal law is whether you are an employee and whether you work more than 40 hours in a workweek. For most day rate workers, the answer to both questions is yes.
Do Ray Rate Workers Qualify For Overtime?
In most cases, yes. The Fair Labor Standards Act requires employers to pay overtime to employees who work more than 40 hours in a workweek, at a rate of at least one and a half times their regular rate of pay. That requirement applies to hourly workers, salaried workers, and day rate workers alike.
To qualify as exempt, an employee must meet specific criteria related to their job duties and how they are paid - not simply how much they earn per day. Many employers classify day rate workers as exempt without verifying that they meet the legal rules.
Federal Law
How Is Overtime Calculated For Day Rate Workers?
This is where most employers get it wrong. Federal law has a specific formula for day rate overtime that is different from what most employers use.
Determine Your Total Weekly Earnings
Add up all pay received for the week, including your day rate for each day worked. This number is the starting point for the calculation.
Calculate Your Regular Rate
Divide your total weekly earnings by the total hours worked that week. This gives you your regular rate of pay for that specific week. This number changes week to week based on your actual hours.
Apply The Overtime Premium
Because your day rate already covered base pay for all hours worked, the law requires an additional half-time premium for every hour past 40. That premium is one-half of your regular rate, multiplied by the number of overtime hours.
Example: $400/Day, 12-Hour Days, 5 Days A Week
Imagine you earn a day rate of $400/day. You work 12 hours a day, 5 days a week. Here is how one week shakes out:
- 1Total Weekly Earnings: 5 days x $400/day = $2,000 total pay
- 2Regular Rate: $2,000 / 60 total hours = $33.33/hour
- 3Overtime Premium: $33.33 / 2 = $16.67 per overtime hour (the amount owed but not paid)
- 4Weekly Underpayment: 20 overtime hours x $16.67 = $333.40 extra per week
The Helix Energy Court Decision
In February 2023, the U.S. Supreme Court issued a ruling that changed the legal landscape for day rate workers nationwide.
The case was Helix Energy Solutions Group, Inc. v. Hewitt. The worker who brought the case earned over $200,000 a year. Even with that level of pay, the Court ruled he was still owed overtime. Why? Because he was paid a day rate, not a guaranteed weekly salary.
Some employers had used high day rates to avoid paying overtime to high earners. That approach no longer holds up. To qualify for the highly compensated employee exemption, an employer must pay a guaranteed weekly salary as the base. A day rate does not meet that standard, no matter how high it is.
What This Means For You
If you were paid a day rate, this ruling may apply directly to your situation. Depending on when the underpayment occurred, a claim may still be available. The statute of limitations is typically two years, and up to three years if the violation was willful. The sooner you act, the more you may be able to recover.
Misclassification and Day Rate Workers
Some employers pay a day rate and label the worker an independent contractor. That label is one of the most common ways employers avoid overtime law. But your label alone does not decide the legal outcome.
Federal law looks at how the work actually happens. Does the company set your schedule? Do you use their tools? Do you work under a supervisor? Is your work central to what the company does? If the answers point to an employment relationship, the law may treat you as an employee regardless of what your contract says.
Being misclassified as a contractor can mean years of overtime you were never paid. If your day-to-day work looks like that of an employee, that classification is worth reviewing.
What This Means For You
If you were paid a day rate, this ruling may apply directly to your situation. Depending on when the underpayment occurred, a claim may still be available. The statute of limitations is typically two years, and up to three years if the violation was willful. The sooner you act, the more you may be able to recover.
Common Industries
Industries Where Day Rate Claims Are Most Common
Day rate pay is common where project lengths vary and workers move between job sites. Josephson Dunlap has handled day rate overtime claims across all of these industries and others.
- Offshore Drilling
- Onshore Drilling
- Pipeline Construction And Inspection
- Commercial Construction
- Film And Television Production
- Security Guard Services
- Healthcare Staffing
- Transportation And Logistics
Frequently Asked Questions
Not necessarily. The label in your contract does not decide if you are owed overtime or not. What matters is how you actually work. Does the company set your schedule? Do you use their equipment? Do you work under a supervisor? If the answer is yes, the law may classify you as an employee, no matter what your contract says.
In most cases, two years. If your employer knew they were breaking the law and did it anyway, that can extends to three years. Some states allow even longer. The clock runs from the date of each violation, so the sooner you act, the more you can recover.
Anything you have helps move your case forward. If you have pay stubs, time records, schedules, emails, or contracts. If you don't have much, that's okay. Josephson Dunlap can work with what's available. Missing records do not prevent you from filing.
The review and finding out how much you could be owed is free. Josephson Dunlap works on contingency you pay nothing unless wages are recovered.
Yes. Certain bonuses must be included when calculating your regular rate of pay. If your employer paid you a bonus but did not adjust your overtime rate, your overtime was likely calculated incorrectly for those weeks.
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