No Token Weekly Guarantees: Sixth Circuit Holds “Weekly Basis” Requires Pay for a Full Week’s Work Under the FLSA Salary Test

Introduction

In Lynwood Pickens v. Hamilton-Ryker IT Solutions, LLC, the U.S. Court of Appeals for the Sixth Circuit addressed a recurring and consequential question under the Fair Labor Standards Act (FLSA): when does an employee qualify as being paid “on a salary basis” such that the employer may invoke the exemption for bona fide executive, administrative, or professional employees (including the “highly compensated employee” (HCE) variation)?

The employer here guaranteed pipe inspector Lynwood Pickens $800 (the equivalent of 8 hours at $100/hour) for any week in which he performed any work, and then paid him $100 per hour for every hour worked beyond the first eight. Pickens typically worked about 52 hours weekly and never received overtime. Classified as salaried and highly compensated, he was denied time-and-a-half for hours over 40. He sued under the FLSA, arguing he was not paid on a “salary basis” and thus was entitled to overtime.

The district court held for the employer at summary judgment. The Sixth Circuit reversed, holding that a salary paid “on a weekly basis” under 29 C.F.R. § 541.602(a) must be a true weekly salary—compensation that covers a regular week’s worth of work—rather than a minimal weekly guarantee (here, eight hours) supplemented by hourly pay for the rest. The court further upheld the validity of the Department of Labor’s salary-basis regulations in a post–Loper Bright world, and rejected offensive issue preclusion based on a similar Fifth Circuit case (Gentry) because the plaintiff could have joined the earlier action.

Summary of the Opinion

Offensive issue preclusion: The court rejected Pickens’s reliance on a Fifth Circuit judgment (Gentry v. Hamilton-Ryker IT Solutions) under Parklane Hosiery’s general rule against offensive non-mutual issue preclusion where a plaintiff could have joined the earlier action.
Salary-basis holding: To qualify as being paid “on a weekly basis” under 29 C.F.R. § 541.602(a), the predetermined amount must cover a regular week’s worth of work. A token weekly guarantee (here, eight hours of pay) plus hourly compensation for all additional hours does not satisfy § 602(a). The court treated the case as a “Helix II,” applying Helix Energy Solutions Group v. Hewitt’s emphasis on ordinary meaning and the structure of the salary-basis scheme.
§ 602 and § 604 preserved: Reading § 602(a) to require a true weekly salary preserves meaningful work for § 604(b)’s “minimum guarantee plus extras” path, including its “reasonable relationship” requirement between the guarantee and usual earnings.
Validity of the regulations (post–Loper Bright): The court upheld the Secretary of Labor’s salary-basis framework (including § 604(b)’s reasonable-relationship test) as a permissible exercise of express statutory authority to “define and delimit” the EAP exemptions, applying Loper Bright’s “fix the boundaries” and “reasoned decisionmaking” review methodology.
Disposition: The court concluded that Pickens is entitled to summary judgment on his individual claim and remanded for the district court to address whether and how the case should proceed collectively.

Analysis

Precedents Cited and How They Shaped the Decision

Helix Energy Solutions Group v. Hewitt, 598 U.S. 39 (2023): The centerpiece. Helix held that a high day-rate does not satisfy § 602(a)’s salary-basis test because the employee’s pay varied with the number of days worked; a salary must reflect a fixed weekly amount independent of days/hours worked. The Sixth Circuit extended Helix’s ordinary-meaning analysis, and its insistence that “salary” connotes stability and pay for a week’s work, to reject a “one-day” or “eight-hour” weekly guarantee as insufficient.
Gentry v. Hamilton-Ryker IT Solutions, LLC, 102 F.4th 712 (5th Cir. 2024): Factually parallel litigation holding similar workers were owed overtime. The Sixth Circuit did not give preclusive effect to Gentry but independently reached a harmonized merits outcome.
Wilson v. Schlumberger Tech. Corp., 80 F.4th 1170 (10th Cir. 2023): Upheld a compensation scheme with a biweekly base salary and additional hourly “rig” pay. The Sixth Circuit distinguished Wilson as involving a true base salary plus distinct performance-based add-ons, whereas Pickens’s compensation was, in “stark contrast,” computed entirely on the same hourly basis.
Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979): The “general rule” against offensive non-mutual issue preclusion when a plaintiff could have joined earlier litigation. Applied to deny Pickens the benefit of Gentry.
Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024): Eliminated Chevron’s implied-delegation deference, but reaffirmed courts’ role to recognize express delegations, determine their boundaries, and review agency action for reasoned decisionmaking. The Sixth Circuit applied this method to uphold the DOL’s “define and delimit” salary-basis regulations.
FCC v. Prometheus Radio Project, 592 U.S. 414 (2021): Reasoned decisionmaking standard; used here to confirm the regulations’ reasonableness within delegated bounds.
Additional interpretive anchors: Sackett v. EPA (ordinary meaning matters even with definitions), Marx v. General Revenue (anti-surplusage canon), Ysleta Del Sur Pueblo v. Texas (avoid nullifying adjacent provisions), Whitman v. American Trucking (intelligible principle), and classic FLSA cases emphasizing “economic reality” over labels (Goldberg v. Whitaker House; Powell v. U.S. Cartridge).
Historical validation of salary tests: Courts of appeals from the 1940s onward consistently upheld salary-basis criteria (e.g., Yeakley, Wirtz, Craig, Prakash), and the Fifth Circuit reaffirmed validity recently (Mayfield v. DOL, 2024).

Legal Reasoning

1) What “on a weekly basis” means in § 541.602(a)

The regulation says an employee is paid on a “salary basis” if they “regularly receive[] each pay period on a weekly, or less frequent basis, a predetermined amount” not subject to reduction for variations in quality or quantity of work, and “must receive the full salary for any week in which the employee performs any work.” The court read “on a weekly basis” in context—within a definition of “salary”—to require that the week is not merely the frequency of a small guaranteed payment, but the foundational unit for the compensation: the predetermined amount must compensate for a week’s work as such.

The court anchored this reading in:

Ordinary meaning of “salary” circa the original regulatory adoption and today: a fixed payment for regular work over a period (week/month/year), associated with stability and discretion over hours, unlike hourly/day-rate pay.
The structure of § 602: Its examples presuppose a “full salary” covering the week (e.g., no docking when work is unavailable; proportionate deductions for full-day personal absences; FMLA partial-week adjustments; initial/terminal week rules). Those examples become incoherent if the “salary” could be a de minimis weekly sum.
Harmonizing § 602 and § 604: If any weekly guarantee—however small—satisfied § 602(a), § 604(b)’s “minimum guarantee plus extras” with its “reasonable relationship” test would be largely superfluous. Reading § 602(a) to require a true weekly salary preserves § 604(b)’s role as the alternative path for hourly/daily/shift-based compensation regimes that include a meaningful weekly guarantee.

2) Application to Hamilton-Ryker’s scheme

Hamilton-Ryker guaranteed $800 per week (eight hours at $100/hour) and then paid $100/hour for every hour thereafter—across the employee’s regular 50+ hour weeks. The court held that this was not a weekly salary under § 602(a) because the guaranteed sum did not compensate for a week’s work; it was essentially an hourly plan with a one-day guaranteed minimum. Echoing Helix’s day-rate analysis, the Sixth Circuit emphasized the impermissibility of tying the employee’s weekly take-home pay to hours/days worked while still claiming the § 602(a) salary exemption.

3) Rejecting the employer’s textual counterarguments

“Weekly basis” as frequency-only: Although “weekly” can sometimes denote frequency, context and the defined term (“salary”) require more than a mere weekly installment of a nominal amount. The court cited Helix’s repeated reliance on the conventional meaning of “salary” and its insistence that the definition must be read in harmony with that meaning.
“Part of the employee’s compensation”: § 602(a) allows additional compensation beyond salary, but only after the predicate is satisfied—i.e., there must first be a true weekly salary. Paying hourly for the rest of what is actually the regular workweek is not the kind of “additional compensation” § 604(a) contemplates (e.g., commissions, profit shares, or overtime beyond the normal workweek).
No “labeling” escape: Employers cannot evade the salary-basis requirement by calling a first day’s pay each week the “weekly salary.” Courts look to economic reality, not labels.
Wilson distinguished: Unlike Wilson’s base salary plus discrete add-ons, Pickens’s compensation was calculated entirely on an hourly basis; the “salary” did not cover the week’s work in any ordinary sense.

4) Preserving § 604(b) and its “reasonable relationship” test

The court affirmed that § 604(b) remains a viable alternative for employers who compute pay on an hourly/daily/shift basis. But they must:

Guarantee at least the minimum weekly amount paid on a salary basis; and
Ensure a “reasonable relationship” between the guaranteed amount and the amount actually earned in the employee’s normal scheduled workweek.

This “reasonable relationship” requirement is integral to maintaining salary-like stability for employees, and the court upheld it as a reasonable, long-standing policy choice by the Department of Labor to prevent manipulation of pay structures that would effectively deny overtime without providing the stability that a true salary is meant to ensure.

5) Validity of the regulations after Loper Bright

Moving beyond Chevron, the court applied Loper Bright’s framework:

Express delegation: Congress expressly authorized the Secretary to “define and delimit” the executive/administrative/professional exemptions. That is a broad grant of discretion.
Boundaries: The court fixed the boundaries of that delegation—allowing the Secretary to identify reliable criteria (like salary basis) that reflect the hallmarks of bona fide EAP roles (status, discretion, independence).
Reasoned decisionmaking: The Secretary’s adoption and maintenance of salary tests since 1940, supported by empirical and practical justifications (Stein and Weiss Reports), is reasonable and consistently upheld by courts. The “reasonable relationship” test in § 604(b) likewise reflects reasoned policy and is “consistent with the salary basis concept.”

The court thus rejected the argument that the salary-basis rules exceeded the Secretary’s statutory authority or were arbitrary/capricious.

The Separate Opinions

Judge Kethledge’s Concurrence

Concurs in full, emphasizing he sees no “regulatory ambiguity” in § 602(a) when read in context; the majority’s interpretation is the best reading.

Judge Murphy’s Partial Concurrence/Dissent

Judge Murphy agrees on issue preclusion but dissents on the salary-basis merits. He reads § 602(a) to unambiguously allow Hamilton-Ryker’s scheme because:

The employee “receives” a predetermined amount “on a weekly basis” if the amount is paid once per week whenever work is performed, regardless of other compensation.
The phrase does not contain an exclusivity requirement that the weekly sum be the sole compensation for a week’s work.
§ 604(a) expressly allows “additional compensation” without losing the exemption; it need not be limited to overtime beyond 40 hours.
Helix is distinguishable because the Helix employee was paid by the day, not the week; here, the $800 was paid by the week.
Reading § 602(a) as the majority does risks making § 604(b) surplusage, but the better reconciliation is to treat § 602(a) as covering base-salary-plus-extras schemes and § 604(b) as covering base hourly/daily/shift schemes with a weekly guarantee.
A stricter salary reading raises statutory concerns because § 213(a)(1) speaks in duty-based terms (“bona fide” EAP capacity). He would avoid those concerns by adhering to what he sees as § 602(a)’s plain meaning.
He notes tension with the Fifth Circuit’s Gentry but alignment with the Tenth Circuit’s Wilson.

Impact

Immediate Practical Consequences

Employers in the Sixth Circuit (KY, MI, OH, TN) cannot satisfy § 602(a) with a token weekly guarantee that represents only a portion (e.g., the first day or first eight hours) of the employee’s regular workweek, while paying hourly for the rest. Such employees are not “salaried” under § 602(a).
Three compliance pathways remain:
- Pay a true weekly salary covering a regular week’s worth of work (and meet other EAP criteria), or
- Use § 604(b): guarantee at least the regulatory minimum paid on a salary basis and ensure a “reasonable relationship” between the guarantee and usual weekly earnings, or
- Pay overtime for hours over 40 as required by § 207.
Highly compensated employees (HCEs) remain subject to the salary-basis requirement. High total earnings do not cure a failure to satisfy § 602(a) or § 604(b) (as Helix confirmed).

Strategic and Litigation Effects

Circuit dynamics: The Sixth Circuit’s rule aligns with the Fifth Circuit’s Gentry and narrows the room left by the Tenth Circuit’s Wilson. Employers with multi-state operations should account for a growing judicial consensus that labels and minimal weekly guarantees will not pass muster post-Helix.
Collective actions: On remand, the district court will evaluate whether opt-in coworkers are “similarly situated.” In the Sixth Circuit, courts apply the more rigorous “strong likelihood” standard for facilitating notice (see Clark v. A&L Homecare & Training Ctr., 68 F.4th 1003 (6th Cir. 2023)), making early merits clarity like this decision especially pivotal.
Damages exposure: Employers using similar schemes face potential liability for unpaid overtime, liquidated damages (unless they prove good-faith/reasonable grounds), and a three-year limitations period for willful violations.
Agency rulemaking and challenges: The court’s Loper Bright analysis strengthens the regulatory footing of the salary-basis regime and § 604(b)’s reasonable-relationship condition, even as separate litigation over threshold amounts continues elsewhere. This opinion signals judicial openness to the DOL’s salary-basis architecture as a reasoned implementation of the “define and delimit” delegation.

Complex Concepts Simplified

Salary basis (§ 541.602(a)): An employee is paid on a salary basis if they receive a fixed weekly (or less frequent) amount that is not docked for partial-day variations and that is paid for any week in which they do any work. The Sixth Circuit holds the amount must cover a regular week’s worth of work, not merely a token portion (like the first day or first eight hours).
Minimum guarantee plus extras (§ 541.604(b)): For hourly/daily/shift-based pay, an employer can still meet the salary-basis concept by guaranteeing a minimum weekly amount (paid on a salary basis) that is roughly equivalent to usual weekly earnings. This prevents using tiny guarantees to avoid overtime while still paying like an hourly scheme.
Highly compensated employee (HCE) (§ 541.601): Eases the duties test for employees with very high total annual compensation but still requires the weekly salary-basis element. High earnings alone do not create an exemption.
Offensive non-mutual issue preclusion (Parklane): A plaintiff cannot piggyback on a prior plaintiff’s victory when the later plaintiff could have joined the earlier case. That bar applies even if the defendant had every incentive to litigate the first case vigorously.
Loper Bright review of agency regulations: Without Chevron deference, courts identify express delegations, fix the scope, and ensure the agency acted reasonably within that scope. Here, Congress’s “define and delimit” language grants broad discretion; the DOL’s salary-basis tests satisfy reasoned decisionmaking.

Practice Pointers for Employers and Counsel

If you classify employees as exempt on a salary basis, ensure the weekly salary truly covers the employee’s regular workweek, independent of how many hours are worked.
When using mixed compensation models (salary plus other pay), confirm that “additional compensation” is structured as contemplated by § 604(a)—for example, bonuses, commissions, profit-sharing, or overtime beyond the normal workweek—rather than substituting hourly pay for the bulk of regular weekly work.
For hourly/daily/shift models, consider § 604(b): set a meaningful weekly guarantee and document that it is roughly equivalent to usual earnings for the normal scheduled workweek. Keep records demonstrating the “reasonable relationship.”
Audit HCE classifications: Verify that the weekly salary element is satisfied under § 602(a) or § 604(b); do not rely on high total earnings alone.
Anticipate collective action scrutiny: Maintain clear, uniform pay policies and documentation; be prepared to address the “similarly situated” standard at the notice stage in the Sixth Circuit.
Risk management: Evaluate potential overtime exposure, consider remedial adjustments, and assess good-faith defenses to liquidated damages where applicable.

Conclusion

Pickens establishes a clear rule in the Sixth Circuit: a “salary” paid “on a weekly basis” under § 541.602(a) must compensate for a week’s worth of work. Minimal weekly guarantees that merely mirror a day’s pay (or a small slice of a regular workweek) do not suffice when the rest of the week is paid hourly. That reading harmonizes § 602(a) with § 604(b), advances Helix’s ordinary-meaning approach, and affirms the DOL’s long-standing, reasoned use of salary-basis criteria to delineate the FLSA’s EAP exemptions—even in a post–Loper Bright landscape.

For employers, the takeaways are straightforward: either pay a true weekly salary, meet § 604(b)’s “minimum guarantee plus extras” with a reasonable relationship to usual earnings, or pay overtime. For litigants, the opinion underscores both the limits on offensive preclusion across related actions and the durability of the DOL’s salary-basis framework. Practically, the decision will recalibrate pay practices that used small weekly guarantees to avoid overtime and will likely influence courts beyond the Sixth Circuit as they continue to apply Helix to diverse compensation schemes.