Watching Government: Enforcing wage and hour rules

Environmental regulatory enforcement actions tend to grab headlines. Federal wage and hour actions also involve US oil and gas firms from major service companies and refiners to smaller oil field service providers.

In what the US Department of Labor's Wage and Hour Division said was one of the largest recoveries of overtime wages in recent years, Halliburton Co. agreed on Sept. 22, 2015, to pay nearly $18.3 million to 1,016 employees nationwide. Investigators found the service and supply company incorrectly categorized employees in 28 job positions as exempt from overtime.

Citgo Petroleum Corp. agreed on Dec. 21 to pay workers at its Corpus Christi Tex., refinery $460,853 in overtime after a DOL investigation found the employees spent an average of 15 minutes briefing incoming members of the next shift after concluding their own work period.

Nova Mud Inc. of Hobbs, NM, and two affiliates paid $1.5 million in back wages and liquidated damages to 241 well servicing employees on Mar. 24 after DOL's Wage and Hour Division found the companies paid fixed, semimonthly salaries without regard to the number of hours the employees actually worked.

"We continue to find unacceptably high numbers of violations in the oil and gas industry," said Betty Campbell, who is the division's Southwest region administrator in Dallas. The initiative started in 2012 in the Northeast as oil and gas activity in Pennsylvania surged, she told OGJ on Apr. 7. By 2013, all 11 Southwest region offices from North Dakota to Texas also were finding violations following employee complaints as well as investigations, she said.

As part of the division's shift toward industry-based enforcement strategies, resources have been focused where data show that violations are common in certain business models. Common mistakes also include failing to include bonus payments workers have received as part of their regular rates of pay when calculating how much overtime is due.

Extent of problem

Wage and hour enforcement involves not only oil patch firms but also related businesses, such as water and stone haulers, trucking, lodging, water, and staffing companies.

"For the most part, employers want to get into compliance," Campbell said. "The first step is to meet the Fair Labor Standards Act's minimum wage, overtime, and record-keeping requirements. Once an employer agrees to comply and changes its payment practices, wages are calculated for a 2-year period for it to pay the money directly to the employees."

She said that the Southwest division has worked with several oil and gas associations to promote better compliance with Fair Labor Standards Act requirements. Local chapters of the National Service, Transmission, Exploration & Production Safety (STEPS) Network have been particularly helpful, Campbell noted.