Oil and Gas Industry compliance with Overtime Wage and Labor Laws – Marcellus Shale Fracking
FLSA and pay the day rate, straight time, salary rate or piece rate to cover all hours worked each week. This triggers a wage and hour violation that results in the substantial underpayment of their workforce. While the industry pay practices may be common, it does not mean they are in compliance with state and federal overtime laws and does not excuse violations. A case in point involves a Pennsylvania based oil field environmental services company that collected water samples from property owners near oil and gas well drilling sites for the purpose of conducting baseline sampling surveys. An investigation found that the company improperly classified nonexempt employees, such as junior environmental scientists and junior baseline samplers, as exempt from overtime pay, and paid them straight time for all hours worked, rather than time and one-half their regular rates of pay for hours worked in excess of 40 in a workweek. The employees were paid on an hourly basis, but were not paid an overtime premium for field work and were not compensated for hours worked in the office. The company also failed to keep accurate records of hours worked by these employees as required by the overtime pay laws. The company tried to claim that employees who gathered water samples from their assigned areas were professionally exempt from overtime, but this did not fly because these employees were not required to have advanced knowledge to perform their duties. For the learned professional employee exemption to apply, the following tests must be met:Many employers in the unconventional oil and gas extraction industry have paid employees the same way for years according to what they believe is the industry norm – whether it be day rate, hourly, piece rate or salary. The problem being that they have not paid their non-exempt employees time and a half for the many hours of overtime they work. Instead, they improperly classify workers as exempt from the
- The employee must be compensated on a salary or fee basis at a rate not less than $455* per week;
- The workers main duty has to be work that requires advanced knowledge which is mostly intellectual in nature. It must also require an employee to use discretion and judgment on a routine basis;
- The advanced knowledge must come from the field of science or learning; and
- The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.