US Department of Labor finds oil and gas industry workers in New Mexico, west Texas underpaid by more than $1.3M

ALBUQUERQUE — A day's work in an oilfield usually means long hours in physically demanding and exhausting conditions. Industry workers deserve every penny of their hard-earned wages. In the oil-and-gas-rich Southwest, the U.S. Department of Labor's Wage and Hour Division is making sure these workers get their pay. Since it launched an enforcement initiative covering New Mexico and west Texas in 2014, the agency has recovered more than $1.3 million owed to more than 1,300 workers.

"The oil and gas industry is emblematic of the modern, fissured workplace where contracting and subcontracting have obscured the traditional relationship between employer and employee," said Dr. David Weil, administrator for the Wage and Hour Division. "The more layers between the primary corporation and its many subcontractors, the more likely there will be wage and other labor violations as businesses seek to lower labor costs and maximize profit margins. Workers get pinched when they are denied wages, benefits and safe working conditions to which they are legally entitled. We are working to ensure that workers receive a fair day's pay for a fair day's work."

The division has found overtime violations caused by numerous practices, including misapplying exemptions from overtime; failing to include bonus payments made to employees when calculating overtime rates; not paying for time spent working off-the-clock, before and after scheduled work shifts; and paying flat daily/shift rates without regard to how many hours the employees worked, and without additional premium pay for overtime.

"There is a misconception in the industry that — because workers typically earn more than the minimum wage — they are being paid legally. That is not always the case," said Cynthia Watson, regional administrator for the Wage and Hour Division's Southwest Region. "You can't pay a flat day rate with no regard for hours worked, misclassify employees as independent contractors, or make deals with employees that violate labor laws."

The Wage and Hour Division's effort in this fast-growing industry seeks to inform workers of their rights and ensure Fair Labor Standards Act compliance among oil and gas companies and other related businesses including, but not limited to, trucking, lodging, haulers of water and stone, staffing service providers and other types of oil and gas supporting trades.

"To achieve lasting changes in compliance in this industry, employees must be informed of their rights and employers must play by the rules," said Watson. "We are committed to providing education about the law's requirements and will continue reaching out to industry employers, stakeholders and employees."

Recent investigations conducted by the Albuquerque District Office include the following:

• Desta Drilling GP LLC where investigators found $317,846 in back wages owed to 449 employees and that bonuses paid to drillers were not included in the rates used for calculating overtime wages.
• Acme Energy Services Inc., doing business as Big Dog Drilling, where investigators determined that 552 employees were due $143,055 in back wages. The investigation also revealed overtime violations when the employer failed to pay employees for required pre-shift job and safety meetings.
• Got Safety was investigated and the division uncovered $74,666 in back wages due to 37 employees working in eastern New Mexico and west Texas. Violations resulted from the employer's practice of wrongly classifying workers as salaried employees exempt from overtime requirements when they failed to meet the duties tests necessary for the exemption to apply.

The FLSA requires that covered, nonexempt employees be paid at least the national minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records. The division has provided resources on FLSA compliance in the oil and gas industry at http://www.dol.gov/whd/.

For more information about federal wage laws, or to file a complaint, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243) or its Albuquerque District Office at 505-248-6100. Information also is available at http://www.dol.gov/whd/.