Shale Industry is "Ripe for Noncompliance"
So says the administrator of the Wage and Hour division of the Department of Labor…and we agree.
Our experience in representing large numbers of oil field workers over the last few years leads us to the same conclusion – noncompliance with state and federal overtime pay laws has been widespread among oil and gas industry employers for many years, depriving workers of hundreds of millions in overtime pay. Unfortunately for workers, the statute of limitations has run on claims that date back over 3 years (unless they worked in a state like NY or CA that provide longer deadlines). However, it is not too late to recover the wages they should have been paid in more recent years.
As the number of multi-million dollar claims (and settlements) for unpaid overtime have increased, so has the level of awareness of the problem. Employees with oil jobs ranging from MWDs to LWDs to Operators, Mud Loggers and Well Testers are now discovering that they and their co-workers may have been shorted large amounts of overtime compensation. Many of our clients have worked for more than one employer that has violated their overtime rights. Once notified of a case against one employer, they quickly realize that another employer has used the exact same illegal pay scheme. We get numerous calls telling us “I was paid the same way at XYZ…I think they owe me back overtime also.” While not the quickest or most efficient way of educating workers about their wage rights, word does spread and one case does tend to lead to another.
It is the long-term use of 2 particular pay schemes has led to most of the recent claims against oil and gas industry employers:
1) Day Rate Pay with No Overtime
2) Straight Time Hourly Pay for All Hours
These improper pay practices have been used for decades by employers of all sizes throughout the industry – adding untold millions in profits to the bottom line at the expense of ordinary workers. The investigation of employers in the Marcellus Shale found violations totaling $4.5 million in back overtime wages at all sized companies, ranging from the global players (Schlumberger and Baker Hughes) to small local firms. Don’t be fooled into thinking that just because everyone has been paying this way for a long time that it must be correct and legal. Until forced to change pay practices, usually through a lawsuit, it is not in the economic best interest of an employer to pay overtime if they can get away without doing so. Overtime pay is a huge added labor cost and the longer they avoid it, the more profit they earn.
Here’s an example of how the math works for a day rate worker who is not paid overtime:
If paid a day rate of $400 per day and working a schedule of 12 hours per day and 14 days on 7 off – in each week worked they are paid $2,800 for 84 hours of work or $33.33 per hour.
They are not, however, getting paid 1.5 times $33.33 ($50 per hour) for each of the 44 hours over 40. This amounts to an extra $733 pay for every week worked. If they actually work 36 weeks a year, they would be owed $26,405 per year in back wages. If the longer 3 year look back period is applied, this amounts to $79,215… without taking into account the potential doubling for liquidated damages.
If you have any questions or doubts as to your entitlement to overtime, it is well worth your time to contact our firm to get a free and confidential review of your specific situation. Call 1-866-559-0400, email email@example.com or submit your information using our convenient Case Evaluation form.