Day rates used to be a staple in the oilfield industry, as well as other areas such as construction. Hundreds of oilfield companies have been sued by current and former employees for paying them day rates and denying them overtime pay. Despite this, some oil and gas drillers and service companies continue to use day rates to pay their workers. If you are or within the past three years have been paid a day rate by a current or former employer, here are three things you should know:
Day rate pay almost always violates federal overtime laws
The Fair Labor Standards Act requires workers to be paid one-and-a-half times their regular rate of pay for each hour worked above forty in a week, unless the worker falls within an exemption, and manual laborers working in the oilfields or construction industries are almost never exempt. Paying a non-exempt worker a flat daily rate regardless of the number of hours worked in a day violates the FLSA’s overtime requirements.
Independent contractors paid day rates may be entitled to overtime pay
Many oilfield and construction companies have switched their workers from employees to “independent contractors” or have contracted with “consulting firms” that hire the workers and classify them as independent contractors. These workers are then paid a day rate. Companies do so in order to avoid paying overtime, benefits and various state and federal taxes. However, merely designating workers as independent contractors
Don’t wait if you have been denied overtime because of day rate pay
The FLSA generally allows workers to sue for the past two years of unpaid overtime. If the worker can show that the company willfully violated the overtime laws, the worker can seek three years of back pay. However, the clock only stops when the worker files suit. So, if a worker has left the job and worked there for more than two years, every day that the worker waits to file suit is potentially another day of overtime pay lost. As such, it is critical that a worker with questions about day rate overtime pay seek the advice of an experience overtime attorney as soon as possible. Do not wait – call us now!
About the author: Josh Borsellino is an experienced overtime attorney that has recovered overtime pay for hundreds of workers, most of whom work in the oil and gas and construction industries. Call Josh at 817.908.9861 or 432.242.7118 or complete this form for a free consultation.