The oil and gas extraction industry is one of the biggest employers in the country, supporting millions of direct and ancillary jobs across the United States. Many of those jobs are in — or related to — fracking, a new technique used to access oil and gas deposits that were previously impractical and uneconomical to develop. But as the industry has expanded, so has the prevalence of unlawful wage and hour practices.
Two of the largest areas for fracking are the Marcellus shale formation, which spans across the borders of six states, and the Barnett shale deposit. Together, they account for a substantial number of jobs.
In 2012, the U.S. Department of Labor (DOL) began a special enforcement initiative that targeted the fracking industry, identifying several risk factors for wage and hour abuse in the sector. It found that field workers are often isolated in rural work camps and rarely have the protection of a union. The DOL enforcement initiative revealed this can lead to a number of wage and hour abuses and violations of the Fair Labor Standards Act (FLSA), including:
- Workers living at their worksite and on-call, even after the work day has ended. As a result, off-the-clock work often occurs, which is a violation of the minimum wage and/or overtime pay requirements of the Fair Labor Standards Act (FLSA).
- Paying workers on a day-rate basis, which means a flat rate regardless of the number of hours worked. The DOL found this practice can lead to serious violations of state and federal law.
- Failure to include production bonuses in the regular rate of pay, which affects calculations for overtime pay.
- Improperly reclassifying workers as independent contractors so they would be exempt from the FLSA and not be owed overtime pay. This practice was found most often with workers engaged in geological services and drilling, land leasing and acquisition services, and oilfield support services. Other types of workers misclassified as independent contractors, though less frequently, include mechanics, roughnecks, rig hands, floor hands, drillers, derrick hand, field engineers or supervisors, roustabouts, equipment operators, lease hands, compressor operators, welders, pumpers, coilers, and well tenders.
The DOL enforcement initiative has already resulted in Halliburton agreeing to pay $18 million to resolve wage and hour claims brought by more than 1000 of its employees. The Halliburton workers that brought the claim included: field service representatives, pipe recovery specialists, drilling tech advisors, perforating specialists and reliability tech specialists.
Other lawsuits are pending, with recent class actions filed in Pennsylvania against Rush Wellsite and EQT Production Co. Additional litigation is likely as the labor practices of the fracking industry as a whole faces increasing scrutiny.
If you have worked in the oil and gas industry and not been paid for overtime or off-the-clock-work, please contact the attorneys in Sommers Schwartz’s Employment Litigation Group to discuss your situation.