Many companies in the oil and gas industry employ field service engineers, mud engineers, tool pushers, field service technicians, tankermen, and other field service workers typically pay them on a fixed salary, day rate, straight hourly or per job basis irregardless of the number of hours worked per week. While these pay practices are common for oilfield workers, they violate overtime law because of the lack of overtime pay when these oilfield workers work more than 40 hours. Depending on which state the oil and gas workers were working in when the overtime laws were violated, these workers may actually be owed overtime under federal law (FLSA) and state laws.
Common overtime violations in the oilfields are the result of the following practices:
- Paying “fixed salary,” “day rate” or “per job rate” incorrectly with no overtime pay;
- Not including bonuses and extra pay in overtime calculations;
- Misclassification of oilfield workers as independent contractors and not paying overtime;
- Not counting time spent on travel to job sites, safety meetings or training as hours worked;
- Misclassification of oilfield workers as exempted workers;
- Paying truck drivers that work as short haul truckers or oil field hauling services that involve instate driving;
- Paying straight time for hours over 40 a week.
Even though many oilfield workers are highly compensated, that does not mean they are not entitled to overtime if they work significant hours.
The federal Fair Labor Standards Act (“FLSA”) assumes that oilfield workers are entitled to payment of overtime for all hours worked in excess of 40 in a work week at a rate not less than one and one-half times each employee’s “regular rate”. Unless the oil and gas companies can prove that their oilfield workers fall within narrow exemptions defined by federal and state laws, they have to pay their workers overtime.
How Overtime Pay is Calculated
The Fair Labor Standards Act (FLSA) requires that overtime pay must be paid at a rate of 1 1/2 times a non-exempt employee’s regular rate of pay for each hour worked in excess of 40 hours in a workweek. If an employee is paid a day rate or a job rate, then the regular rate is determined by adding up all compensation (including bonuses and any extra pay) paid during that particular workweek and dividing that amount by the total hours actually worked. This method of pay is described here. Regular rate for salaried employees is calculated by dividing the weekly salary by the number of hours that the salary is intended to compensate.
Remedies for Oilfield Workers
Oilfield workers are entitled to two or three years of back pay, liquidated damages (equal to the amount of unpaid back pay) and attorneys’ fees. Overtime pay can filed as individual lawsuits or class and collective actions.
If you work for an oil and gas company, top drive company, top drive drilling company, deepwater drilling company, oilfield services contractor or other oilfield supply chain company in Texas, Wyoming, Pennsylvania, Oklahoma, Louisiana, or North Dakota call the Tran Law Firm for a free consultation (713) 223-8855. We have the experience and track record of representing oilfield workers in wage and hour cases all over the country.