The oil and gas industry is notorious for not paying its workers legally. Over the past several years, numerous oil and gas drilling, production, and exploration companies have come under fire by both the Department of Labor and through private civil actions for the improper payment of wages.
According to the Department of Labor and the regulations it has implemented, most workers, including those in the oilfield, are entitled to be paid overtime. Unfortunately, a number of oil companies disregard these rules.
Here are some common violations committed in this industry:
1. Paying only a day rate.
Many employees in the oil and gas industry are paid a day rate regardless of the number of hours worked. However, paying a day rate does not mean that an employer does not have to pay overtime. In fact, most employees paid a day rate are still entitled to receive overtime.
2. Misclassifying employees as salaried without overtime.
Many employers mistakenly believe that simply paying their employees a salary means they don’t have to pay overtime. Some salaried employees do not have to be paid overtime but such employees are few and far between and in general, non-supervisory oil field workers cannot be paid only a salary without overtime.
Other companies pay a salary plus a day rate instead of overtime. However, if an employee is eligible for overtime, this pay structure likely violates the law. The same would be true if a worker is paid a salary plus bonuses. If an employee is entitled to receive overtime, an employer cannot skirt that obligation by paying a salary plus a day rate or a salary plus bonuses and call it even.
3. Not paying overtime on bonuses.
Another common violation is paying hourly employees overtime but also paying bonuses without including the bonus payments in the overtime calculation. Companies call these bonuses field bonuses, production bonuses, or safety bonuses and often the amounts of these bonuses equal or exceed what an employee takes home every pay check in regular wages. While these cases are very fact specific, if an employer is paying a bonus according to company created guidelines on a regular basis and the employees expect to receive it, an employee should receive overtime on that bonus payment.
4. Misclassifying employees as independent contractors.
An independent contractor is someone who is in business for himself and not dependent on another company for their continued employment. There are many reasons companies misclassify employees as independent contractors, such as to avoid paying employee benefits like insurance or to reduce the amount taxes the company must pay. One of the principal reasons companies classify employees as independent contractors is to avoid paying overtime. However, true independent contractor relationships are the exception, not the rule. Just because a company calls someone an independent contractor or makes someone sign an independent contractor agreement does not mean someone is actually a contractor.
What positions in the oilfield could be subject to these violations of the law?
A non-exclusive list of workers for whom cases for unpaid overtime have been filed include the following:
- Directional Drillers
- Wireline Operators
- Flowback Operators
- Pipeline Inspectors
- Roughnecks
- Welders
- Pumpers
- Well Site Consultants
- Safety Inspectors
- Landmen
- CWI Inspectors
- Marine Expeditors / Cargo Superintendents
If you think your employer owes you overtime, please contact us and we will review your case and discuss your options.
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