Oil, gas industry workers in 9 states owed more than $1.6M in back wages ongoing Labor Department enforcement initiative finds

DALLAS – The U.S. Department of Labor’s Wage and Hour Division has added four companies and an additional $1.6 million in back wages for more than 2,500 employees as its effort to improve labor law compliance in the oil and gas industry continues.

Investigations of Jet Specialties Inc., of Boerne; Frank’s International LLC and Stream-Flo USA LLC, of Houston; and Viking Onshore Drilling LLC, of Odessa, found violations of the Fair Labor Standards Act’s overtime provisions. Since 2012, more than 1,100 investigations of industry employers have recovered more than $40 million for more than 29,000 workers nationally.

“We continue to find unacceptably high numbers of violations in the oil and gas industry,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “We must ensure that employers pay workers the hard-earned wages they have rightfully earned. Employers who violate the law in their pay practices harm workers, their families and law-abiding industry employers. These cases demonstrate our commitments to ensuring workers are paid a fair day’s pay for a fair day’s work.”

These investigations illustrate a pattern of industry employers failing to pay workers legally required overtime. Common violations include considering salaried employees exempt from overtime requirements, and then failing to pay an overtime premium regardless of how many hours they work; and failing to include bonus payments workers have received as part of their regular rates of pay when calculating how much overtime is due. Jet Specialties committed these violations. 

Frank’s International failed to pay proper overtime after not including bonus payments in workers’ regular rates of pay when computing overtime, and Stream-Flo USA paid nonexempt workers flat salaries without regard to how many hours they worked.  Investigations of both companies began in the Northeast, and expanded to other U.S. locations. Affected employees for both companies live in Colorado, Louisiana, New Mexico, North Dakota, Oklahoma, Pennsylvania, Texas, Utah and Wyoming.

Viking Onshore Drilling LLC failed to include bonus payments in workers’ regular rates when determining overtime pay. Investigators found violations in Texas, New Mexico and Oklahoma.  

Back wages owed to employees and employees affected:

As part of its shift toward industry-based enforcement strategies, focusing resources where data shows that violations are common and business models lend themselves to violations, the division’s ongoing education and enforcement initiative seeks to improve oil and gas industry compliance. This effort also expands to related businesses, such as water and stone haulers, trucking, lodging, water and staffing companies.

Working with industry leaders, employers and trade associations, the division offers training and education to promote compliance and awareness of FLSA requirements. It encourages industry leaders to serve as models for industrywide compliance. At the same time, the division is informing workers and community groups about the initiative, their rights as workers, the division’s services and its availability to review and investigate worker complaints regarding violations. 

Simply paying an employee a salary does not necessarily mean the employee is not eligible for overtime. The FLSA provides an exemption from both minimum wage and overtime pay requirements for individuals employed in bona fide executive, administrative, professional and outside sales positions, as well as certain computer employees. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Job titles do not determine exempt status. For an exemption to apply, an employee’s specific job duties and salary must meet requirements of the department’s regulations. On June 30, 2015, the Wage and Hour Division announced a Notice of Proposed Rulemaking to update the regulations defining which white-collar workers are eligible to receive pay for hours worked over 40 in a workweek. For more information, please visit www.dol.gov/whd/overtime/NPRM2015

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers must maintain accurate time and payroll records.

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