Employees working in the oil and gas industry work high-risk jobs. These individuals deserve to be properly compensated, but history tends to repeat itself when it comes to underpayment. The U.S. Department of Labor investigates hundreds of cases yearly concerning oil and gas workers receiving inaccurate and/or unfair wages. Even more cases are brought as private lawsuits by workers who have been underpaid by their employers.
Employee misclassification is a tactic that oil and gas companies may use to avoid paying their workers overtime. By classifying an employee as “exempt” or hiring them as an independent contractor, employers think (oftentimes wrongly) that they can contract around the wage and hour requirements of the Fair Labor Standards Act (FLSA), such as paying overtime.
Overtime Myths and the Real Facts
1. “You‘re paid a salary; therefore, you are exempt from overtime pay.“
Whether an employee is paid hourly or by salary, the employee’s right to overtime pay is actually determined by the employee’s job duties and responsibilities.
2. “Engineers are exempt from overtime pay.“
Job title has nothing to do with overtime pay. By law, all non-exempt employees must be fairly compensated for hours worked beyond 40 per week.
3. “Independent contractors don‘t receive overtime pay.“
Even though someone is hired as an “independent contractor”, the right to overtime pay is still determined by the job duties and responsibilities test. Numerous lawsuits have been filed against employers who have failed to pay overtime to their “independent contractors”, who are actually employees under the FLSA.
4. “‘Straight time‘ is a common method of payment.“
A common practice in the oil and natural gas industry, “straight time” is a way for companies to pay employees the same hourly rate even after working over 40 hours in a week. A common practice does not make it a legal practice.
5. “An employee‘s regular rate is their hourly rate.“
Per diems (a portion of untaxed salary), job bonuses, truck pay and other allowances must be included in the computation of the regular rate. Unless these additional payments are included within the hourly rate and the overtime rate, the employee is not being compensated fairly.
6. “Drive time doesn‘t count for overtime.“
According to the Fair Labor Standards Act, employees must be compensated for time spent traveling for work purposes. All time spent traveling from site to site must be logged in and the employee may be required to be compensated.
Wages Disputes and the Law
Although the U.S. Department of Labor is in the process of restricting industries from practicing worker misclassification and other wage injustices, wage and hour lawsuits are still on the rise. The Fair Labor Standards Act is a law that governs these issues. If you routinely work over 40 hours per week and think you have been misclassified as exempt or worked as an independent contractor, you should consider contacting a wage and hour attorney to find out whether you have a claim for unpaid wages.