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Overtime Pay Issues for Petrochemical Workers as Jobs increase along the Gulf Coast

With the large amount of new projects taking place, a new boom is occurring in the petrochemical business along the Gulf Coast (particularly in Texas and Louisiana), and this means increased competition for the workers needed to build and operate plants.  A number of large companies including Exxon, Saudi Basic Industries, Chevron Phillips Chemical, Dow Chemical, ME Global, Total have announced or are underway with major new projects.  In general, this is good news for those seeking construction and refinery jobs, including:

  • CAD / Drafting
  • Schedulers / Planner
  • Inspector
  • Field Engineer
  • Service Technician / Operator
  • Equipment Operator
  • Welder

For a number of years, petrochemical related companies have been expressing concerns that there are too few skilled workers entering the industry to make up for the number of workers who are rapidly approaching retirement age. This has led employers to focus more heavily on recruiting already trained and experienced workers from competitors – placing a premium on such job seekers.

Worker Beware

There are, however, a few things that workers should be aware of to insure they receive proper compensation – particularly for the many hours of overtime they are likely to be required to work.

While wages for skilled construction workers on/at petrochemical plants can be $30, $40 or more an hour, not all receive full and proper pay in accordance with the labor laws for their overtime work.   We have represented many of these workers, and for these high-paying jobs, the value of unpaid overtime can add up to tens of thousands of dollars in a relatively short period of time.

Straight Time for Overtime

With very few exceptions, workers who are paid on an hourly basis are legally entitled to receive time and a half their regular hourly rate for all hours they work in excess of 40 per week.  Even if the hourly rate is high ($40, $50, $75+) the overtime laws likely still apply.  Hours cannot be shifted or averaged across more than one workweek in an attempt to avoid the payment of overtime.  Additionally, it does not change the law when a worker is provided through a staffing or placement agency.  Bottom line – if you are being paid the same hourly rate for all hours worked, including those over forty per week, you should be very skeptical.

Day Rate with No Overtime Pay

Construction and petrochemical workers may be paid using a day-rate system, but this does not mean that they are not legally entitled to an overtime premium once they exceed 40 hours per week.  To the contrary, most industrial workers paid a flat daily-rate for all hours worked during each day must be paid time and a half for all overtime worked.  How to calculate the correct overtime rate for a day rate employee can be a bit tricky, but this just goes with the territory for employers who elect to use this pay method.

Misclassification as an Independent Contractor

The practice of labeling employees as independent contractors is particularly widespread in temporary employment industries such as construction services.  Because it has been going on so long, many workers wrongly assume it must be legal.  Treating workers as independent contractors is not a minor clerical error, but rather a conscious decision made by an employer trying to save money by not paying the taxes, benefits and overtime wages they should.  In a competitive bidding situation, this puts honest companies who properly classify their workers at a distinct disadvantage and gives an unfair pricing advantage to the violators.

The analysis involved in determining if a worker is really an independent contractor is fact specific, but in general a person is considered an employee if he or she is subject to another’s right to control the manner and means of performing the work.  True independent contractors, on the other hand, are individuals who obtain customers on their own to provide services (and who may have other employees working for them) and who are not subject to control over the manner by which they perform services.

For more details, please see – How to Tell if You Are Really an Independent Contractor

Here are a few examples of the projects along the Gulf Coast:

  • Exxon: $10 billion petrochemical complex near Corpus Christi expected to create 11,000 construction jobs and 600 new permanent jobs at the site.
  • Sasol: $8.1 billion Lake Charles ethane cracker and derivatives project will create more than 500 full-time manufacturing jobs and more than 5,000 construction jobs at peak
  • Total:$1.7 billion ethane steam cracker in Port Arthur will support 1,500 jobs at the peak of the engineering and construction period.
  • Freeport LNG: $3 billion Natural Gas Liquefaction with 1,000 construction workers at peak.
  • Dow Chemical / MEGlobal: $1 billion Ethylene Glycol Plant with 1,400 construction workers at peak.
  • Marathon Petroleum / Fluor: Major reconfiguration of Galveston Bay and Texas City refineries. Marathon plans to spend about $85 million on the project in 2017.
  • G2X Energy: $1.6 billion Big Lake Fuels Methanol Plant in Lake Charles, La. Expected to add 2,500 direct and indirect jobs to the Lake Charles area.
  • Lotte Chemical and Axiall Corp.: $1.9 billion ethane cracker complex in Calcasieu Parish. Estimated 2,000 construction jobs will be created at peak building activity

Petrochemical and construction workers should not rely on their supervisor or Human Resources for critical information regarding the laws on overtime pay and how such apply to their specific job.

Because of the strict time limits imposed by the overtime pay laws, procrastination can be costly. If you have any doubts as to your entitlement to overtime, contact the overtime pay experts at The Lore Law Firm for a free and confidential review.

Call 1-866-559-0400, email mlore@www.overtime-flsa.com or submit your information using our convenient Case Evaluation form for a FREE and CONFIDENTIAL review of your circumstances – because time is money.

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