With the decline in oil prices and the resulting layoffs in the energy sector, wage and hour attorneys anticipate a dramatic increase in overtime lawsuits. When the oil industry was booming, companies focused their efforts on recruiting to keep up with the heavy demand for workers. Although the compensation practices wer e often noncompliant with wage and hour law, employees were earning good wages and did not complain. Now, these illegal pay schemes are coming under scrutiny as more and more laid off workers consult with attorneys.
There are two types of illegal compensation schemes that seem to be prevalent in the industry. First, many employees have been classified as independent contractors to avoid the payment of overtime wages completely. Secondly, companies failed to include all types of income into the calculation of overtime pay. Contrary to popular misconception, the law does not define overtime wages as one and one-half times an employee’s hourly rate of pay. Rather, overtime wages are calculated as one and one-half times an employee’s regular rate of pay. The regular rate of pay includes safety bonuses, production bonuses and other types of nondiscretionary incentive pay. This results in an underpayment of overtime wages to employees.
If you are or were employed in the oil and gas industry and worked overtime hours, you should consult with an attorney to explore whether or not you received all of the overtime wages owed to you under the law.