Hey, Warriors and Bosses!
Grab your favorite caffeinated beverage and scoot a little closer to the compliance campfire. On April 1, 2025, the U.S. Court of Appeals for the Sixth Circuit lit up the wage-and-hour world with Pickens v. Hamilton-Ryker IT Solutions, LLC. The court clarified what it really means to pay an employee “on a weekly basis” under the Fair Labor Standards Act (FLSA)… and, spoiler alert, it’s not as simple as cutting a check every Friday.
The 60-Second Backstory (Because We’re All Busy)
-
Player #1: Lynwood Pickens, a pipe inspector billing 28–83 hours per week at $100/hr.
-
Player #2: Hamilton-Ryker, a staffing agency that paid him a flat $800 “weekly salary” (the cost of just eight hours) plus $100 for every hour over eight.
-
Issue: Company called it “salary,” skipped overtime, and invoked the Highly Compensated Employee (HCE) exemption. Pickens said, “Nice try—see you in court.”
What the Sixth Circuit Actually Said
-
A salary isn’t “weekly” just because you hand it over once a week.
The amount has to reflect a true week’s worth of work—not one measly day with the rest on a time-clock roller coaster. -
Helix Energy still rules the day.
Following SCOTUS’s Helix decision, the panel emphasized that a legitimate salary is predetermined and stable—unaffected by the ebb and flow of hours or days worked. -
Reasonable-relationship test? Don’t ignore it.
If you guarantee a partial salary (under 29 C.F.R. § 541.604(b)), it has to be “roughly equivalent” to what the employee usually earns. In Pickens’s world, $800 vs. a typical $5,200 paycheck was… well, not even in the same zip code.
Why Your Payroll Spreadsheet Should Be Nervous
-
Creative pay plans are under the microscope. Courts will pry apart any scheme that smells like overtime avoidance—even for six-figure earners.
-
“Set-it-and-forget-it” guarantees won’t cut it. Salary must actually compensate for the general value of a week’s labor.
-
HCE exemption still needs a bona fide salary basis. High pay alone doesn’t grant a free pass.
Action Items for HR
To-Do | Why It Matters | Quick Tip |
---|---|---|
Audit “salary” classifications | Make sure the guaranteed amount covers a normal week’s work. | Compare salary to average weekly hours × hourly rate. |
Revisit § 541.604(b) arrangements | Guarantee must bear a “reasonable relationship” (≈1.5× is a common rule of thumb). | Document how you reached that ratio. |
Train managers on overtime flags | Front-line leaders often approve funky schedules. | Provide a one-pager on when to call HR before tweaking pay plans. |
Budget for course-correction | Potential retro pay or reclassification can sting. | Build a contingency line in next quarter’s forecast. |
The Sixth Circuit basically said, “If you’re going to call it a salary, pay it like one.” That means predictable, week-or-longer, no-strings-attached compensation—not a “just-kidding” base that only buys Monday morning. Double-check your pay practices now, before an enterprising pipe inspector (or a curious DOL auditor) does it for you.
As always, this article is friendly HR banter, not legal advice. When in doubt, consult your local wage-and-hour counsel—preferably before your next payroll run.
Stay kind, stay curious, and keep those compliance fires burning!
Be Audit-Secure™!
Lisa Smith, SPHR, SCP
Note: This blog post is for informational purposes only and should not be construed as legal advice. Always consult with a legal professional for advice specific to your situation.
Here is what all you will get:
- Boss Calls™ – Access to EVERY Boss Call™ – Past & Future.
- HelpDesk for HR VAULT – Access to all 8 of our proprietary tools and applications to make your workday simple.
- Forms, Docs, Policies and Procedures Library – 700+ samples you can download and edit to fit your needs.
- U.S. ePoster Club – Download state, city, and local posters. Both required & recommended, for all 50 states & D.C.
- Same-day email support – Write to our team of SPHR and SCP professionals with all your HR questions.
Lisa Smith, SPHR, SHRM – SCP
Certified EEO Investigator (EEOC)
Lead Support and Content Chief – HelpDeskforHR.com
“You cannot be audit-proof, but you can Be Audit-Secure.”