The U.S. Department of Labor (DOL) said Monday a wage enforcement initiative launched last year in New Mexico and Texas has recovered more than $1.3 million for employees of subcontractors working for independent producers in the region.
Investigations conducted by the DOL's Albuquerque, NM, district office found overtime violations, including misapplication of exemptions from overtime; failure to include bonus payments made to employees when calculating overtime rates and nonpayment for time spent working off-the-clock, among other things.
"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," said DOL’s David Weil, administrator for the Wage and Hour Division.
Weil made similar comments in December when DOL announced an agreement with undisclosed oil and gas subcontractors to pay $4.5 million in back wages for 5,310 employees in Pennsylvania and West Virginia (see Shale Daily, Dec. 10, 2014). He repeated again that the industry represents the "modern, fissured workplace" and stressed that similar initiatives are ongoing throughout the country.
In the Northeast, DOL said its investigation began in 2012 and most of the violations were because of improper payment of overtime. Under the Fair Labor Standards Act (FLSA), nonexempt employees, such as hourly workers, must be paid for all hours worked, plus time and one-half their regular rates for hours worked beyond 40 per week.
On Tuesday, the law firm Baron & Budd filed unrelated lawsuits against Latshaw Drilling Co. LLC, Nabors Drilling USA LP and Trinidad Drilling LP on behalf of employees that allege they were not paid properly under the FLSA for overtime hours.
The DOL said its wage enforcement initiatives would extend beyond the well pad to trucking, lodging, water management, staffing services and other related trades throughout the supply chain. Investigators found $317,846 in back wages owed to 449 employees at Desta Drilling GP LLC; $143,055 owed to 552 employees at Acme Energy Services Inc. and $74,666 in back wages due to 37 employees at Got Safety, which specializes in safety training.
The companies have not commented about the DOL’s findings, but the industry has in some cases countered unfair labor practices by reminding critics that it has provided tens of thousands of jobs in recent years.
An economic report released by the U.S. Census Bureau last year showed that the "mining, quarrying, and oil and gas extraction sector" was among the fastest-growing employers nationwide between 2007 and 2012 (see Shale Daily, March 27, 2014). Employment across the sector increased 23% to 903,841 jobs during that period, while the oil and gas industry alone employed 192,000 people and saw payroll grow by 60% to hit $15.4 billion.