• Skip to content
  • Skip to primary sidebar

Owed Unpaid Wages?

Information for workers owed unpaid wages.

  • Home
  • About
    • Owed Wages?
    • Anatomy of an Unpaid Wages Lawsuit
    • Scholarship
  • News
    • Food Servers
    • Call Center
    • Minimum Wage
    • Off the Clock Work
    • Tip-Sharing
    • Unpaid Commissions
    • Unpaid Overtime Pay
    • Worker Misclassification
  • FAQs
  • Wage Theft
    • 2017 Wage Theft Report
    • “Off the Clock” Work
    • Donning & Doffing Time
    • Minimum Wage Violations
    • Misclassification of Workers
    • Overtime Pay Violations
    • Payroll Debit Card Fees
    • Suspect Record-Keeping
    • Tip-Sharing Violations
    • Unpaid Meal Breaks
    • Unreimbursed Expenses
  • Industries
    • Call Center Agents
    • Food Processing Workers
    • Hotel Workers
    • Non-Exempt Salaried Workers
    • Nurses & Aides
    • Restaurant Servers
    • Roadside Technicians
    • Telecommuters
    • Truck Drivers
    • Construction Project Supervisors
    • Gas Station Workers
    • Residential Property Managers
    • Private Security Guards
  • Contact
oil worker wage theft

Oct 02 2017

Oil and gas industry – 2 common ways employers violate the FLSA

The Fair Labor Standards Act (“FLSA”) was designed to protect workers from employers who may otherwise take advantage of their employees. Generally, the FLSA requires employers to pay an overtime premium to non-exempt employees of one and a half times the employee’s regular rate of pay for all hours worked in excess of 40 within a workweek and to also pay at least the minimum wage for all hours worked.

In the rapidly growing oil and gas industry, however, wage and hour violations have become more common as companies seek ways to lower their labor costs:

  1. Day Rate Pay Without Overtime

One common type of violation occurs when an employee receives a “day rate” payment without overtime. A “day rate” method of payment is a flat sum for a day’s work without regard to the number of hours worked in the day. Simply paying employees a day rate does not, however, negate the FLSA’s requirement that non-exempt employees receive overtime at a rate of 1.5 times the regular rate for all hours worked over 40. To comply with the FLSA, employers who use this method of compensation must therefore pay non-exempt employees a premium overtime rate. There is often plenty of room for error in calculating an employee’s overtime on a day rate of pay, as this rate can fluctuate depending on the amount of hours worked.

  1. Independent Contractor v. Employee Misclassification

Additionally, some employers try to avoid their obligations under the FLSA by classifying workers as independent contractors, rather than employees. Independent contractors are not subject to the many of the FLSA’s protections, including overtime, so employers often “misclassify” workers to eliminate certain tax obligations or other costs otherwise owed to employees.

This technique is fairly common in the oil and gas industry, where much of the day-to-day work on oil rigs and gas wells is sub-contracted out to other companies. But it is the actual employment relationship—not the label—that controls whether an individual is an employee or an independent contractor for the purposes of the FLSA. For example, one of the various tests applied by courts in making this determination (“economic reality test”) takes into consideration 6 different factors: (1) the permanency of the relationship; (2) the degree of skill required; (3) whether the worker contributes services that are an integral part of the business; (4) the employer’s control over the worker; (5) the worker’s opportunity for profit or loss; and (6) the worker’s investment in materials and equipment.

Defining employee status can be complex and it all depends on the circumstances surrounding the employment relationship as a whole. Additionally, misclassification can expose employers to serious liability—including payment of back wages, liquidated damages, and attorney’ fees—when violations are found.

Written by Wage Authority Group · Categorized: Worker Misclassification

Reader Interactions

Primary Sidebar

Questions? Get Answers

Call: 1-877-739-1127

Or Complete the Following Form:

News

  • U.S. Supreme Court Rules Against Auto Service Advisers In Overtime Lawsuit
  • Lyft Drivers Score Big Settlement As Gig Economy Wage & Hour Lawsuits Continue To Soar
  • Arizona Restaurant Chain Sued for Unpaid Wages
  • Gov’t Employees Sue Cuyahoga County for Unpaid Overtime
  • DOL: Alabama Security Company Withheld Millions in Wages

248-746-4057 Wage Authority Group / Terms ATTORNEY ADVERTISING

© Copyright 2017 All Rights Reserved.