US Labor Department sues Victoria, Texas, oil pipe maker for back wages, damages for workers

Date of Action: Dec. 3, 2015

Type of Action: Lawsuit filing

Name of Defendant: Platform Marine Inc., 3431 FM 1685, Victoria, Texas

Allegation: The U.S. Department of Labor has filed a lawsuit against Platform Marine Inc. after a Wage and Hour Division investigation found that the employer violated the Fair Labor Standards Act by failing to pay 43 employees approximately $45,600 in overtime wages. Investigators from the division’s Corpus Christi Area Office found that Platform Marine improperly attributed part of workers’ pay as a “per-diem” rate, typically used to reimburse workers for expenses they incur on behalf of their employer. In this case, the workers did not actually incur any costs for the employer or travel at work, so the per-diem payment was not legitimate.

For example, an employee may be hired at $30 per hour, but his paycheck would show he was paid an hourly rate of $16 per hour and then a per-diem rate of $14 per hour. When computing overtime compensation, the employer used only the $16 hourly pay rate to determine and pay the overtime due, rather than properly basing the overtime rate on the full $30 amount. Additionally, the employer, which specializes in fabricating pipe and other materials for the marine, oilfield, gas and pipeline industries, regularly paid production bonuses to some employees, but failed to include those amounts when determining the rates of pay upon which they based workers’ overtime, resulting in additional violations.

Quote: “Unfortunately, we see too many companies like Platform Marine that use the same evasive pay practice to lower overtime premiums. We are concerned that, in this competitive market,  employers are looking to each other for new and creative ways, that may not be legal, to cut labor costs,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “Workers and their families suffer when they are denied wages they have legally earned. We are working to ensure that workers receive a fair day’s pay for a fair day’s work.”

Resolution: The department seeks back wages and an equal, additional amount in liquidated damages for these workers, estimated at over $91,000 and an injunction against future violations of the FLSA. 

Information:  For more information about federal wage laws administered by the Wage and Hour Division, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

Court: U.S. District Court, Southern District of Texas, Victoria Division

Docket Number: 6:15-cv-00090