Resources for Oil and Gas Industry Workers

Many oil and gas industry employers have laid off large portions of their workforce, and many of those workers were not properly paid for overtime work during their employment.

Recently laid off oil and gas industry employees still have a right to their overtime pay owed under the law. Additionally, current employees may see additional violations where employers cut corners in response to changing financial circumstances.

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Common overtime violations by employers in the oil and gas industry include:

• Claiming employees cannot earn overtime because they are paid a day rate
• Exploiting schedules to avoid overtime pay by front-loading work into a single workweek
• Claiming employees cannot earn overtime because they are “learned professionals”
• Attempting to pay bonuses instead of paying overtime
• Permitting employees to perform unpaid work before their paid shift, during their unpaid meal, breaks, or after their paid shift
• Misclassifying employees and independent contractors

Again, if you recently lost your job due to layoffs or termination, this does not change the fact that you are entitled to recover the overtime pay required by law.

Please reference the resources below for additional information. If you have a question not answered in these resources, please contact us and an attorney will get back to you within 48 hours.

Claiming Employees Cannot Earn Overtime Because They Are Paid a Day Rate

Employers in the oil and gas industry frequently attempt to shrink their overtime obligations under the Fair Labor Standards Act and state law by paying workers a day rate and claiming they are exempt from the overtime pay laws based on the seemingly high amount paid per day. An appellate court recently explained this is not a valid basis for an exemption because a day rate is not the same as a salary.

Exploiting Schedules to Avoid Overtime Pay

Commonly, employees at refineries or on rigs work schedules to maximize the amount of work performed and minimize the amount paid by the employer. For example, many companies force employees to work 7 days in a row, followed by 7 days off. In the first week, employers will require employees to work up to 80 hours, but then claim no overtime is owed because they are performing no work in the second week. In short, the employer claims that it “averages” out to 40 hours each week. This violates the FLSA because overtime must be calculated on a workweek, and not biweekly basis. In these cases, the employees are owed overtime for the hours worked above 40 in the first week.

Claiming Employees Cannot Earn Overtime Because They Are Learned Professionals

Some oil and gas companies have attempted to avoid overtime by classifying employees as exempt scientists, for example, employees who collect samples, even though the employees are not required to have an advanced degree or knowledge to perform the work.

To qualify for the learned professional employee exemption, an employer needs to show the following:

• The employee must be compensated by salary at a rate greater than $684 per week;
• The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
• The advanced knowledge must be in a field of science or learning; and
• The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

If an employee does not have an advance degree and does not need to have an advanced degree to perform their job, the employer cannot withhold overtime by claiming thy are learned professionals. A similar issue arises for employees in “engineering technician” positions, where the employees are not required to hold an engineering degree to perform their work.

If an employer misclassifies an overtime eligible employee as exempt, this violates the FLSA, and the employee is entitled to be paid for their unpaid overtime.

Attempting to Pay Bonuses “In Lieu” of Overtime

Some companies attempt to pay flat bonuses in lieu of overtime. This practice violates the law where it results in overtime-eligible employees receiving less than one-and-one half times the regular rate of pay for all hours worked over 40 hours in a workweek.

Failing to Include Bonus Payments in the Employees Overtime Rate

When employees receive an incentive-based, non-discretionary bonus, for example, bonuses for performing work on weekends or overnight, or pre-determined production goal bonuses, these amounts should be included in the rate at which overtime is paid. Often, employers fail to do this and instead, pay overtime based on a flat base rate, which violates the law.

Unpaid Work Before Paid Shift, During Unpaid Meal Breaks, or After the Paid Shift

A common violation occurs in office settings where employers overload overtime eligible workers to the extent that the only way to keep up is to perform unpaid overtime work prior to the paid shift, after the paid shift, or during time designated for an unpaid duty-free meal period.

On rigs or in refineries, overtime violations can occur where the nature of the work requires an employee to perform set-up duties, gather or store equipment, or engage in shift exchanges during unpaid time, either before or after the shift, or during an unpaid meal period.

If an employer knew or should have known that the work was performed, overtime pay is owed for the unpaid hours over 40 in a workweek.

Misclassifying Employees as Independent Contractors

Companies may seek to avoid overtime by misclassifying employees as independent contractors, even though the company exerts significant control over the workers hours, duties, tools of the trade, and procedures governing how work is performed.

This page is for attorney advertising and informational purposes only. Nothing in this page should be construed as legal advice or as creating an attorney-client relationship with McGillivary Steele Elkin LLP or its attorneys. Although McGillivary Steele Elkin LLP seeks to help employees recover backpay and liquidated damages for unpaid overtime work, it cannot guarantee that any potential client in this matter will in fact recover any amount of money. Nothing in this page should be read to contain a promise or guarantee of success on the merits of this pending claim, nor should it create any expectation that joining the lawsuit will result in financial gain. McGillivary Steele Elkin LLP is a Washington, D.C. based law firm located at 1101 Vermont Ave., N.W., Suite 1000 Washington, DC 20005. For any questions related to this page, please call (202) 833-8855 or email at info@mselaborlaw.com.