A study by ProPublica into Department of Labor investigations has shown that most oil and gas rig workers may in fact be underpaid. These men and women, who perform some of the most dangerous work in the world, are severely underpaid due to accounting tricks by their employers. These accounting techniques deny these workers benefits such as medical leave, overtime pay and unemployment insurance. Employers will often categorize workers as independent contractors, even though they do not meet the legal definition of contractors leaving them underpaid.
This accounting technique is known as “misclassification”. Employers will label their workers as contractors, even though they qualify as full time employees in reality, and fail to meet their obligations to these underpaid employees. Experts in the field believe this technique is used by small employers who are attempting to gain an advantage in securing contracts in a highly competitive market. The trend towards misclassification has escalated in recent years, most likely due to the economic downturn.
The practice is made possible because oil rigs will often contract work out to many subcontractors at a time. The employers are looking for a way to gain an advantage at the expense of the underpaid oil rig workers.
A real concern with misclassification is that independent contractors are not paid overtime wages. The law states these workers must be paid more than minimum wage and they must be fairly compensated for any overtime accrued. Shifts on oil rigs will regularly exceed the 40 hour work week. An average work week on an oil rig will reach 84 hours a week. This means more than half of weekly hours are not subject to overtime leaving the workers grossly underpaid. This year alone the Department of Labor has conducted 435 investigations resulting in over $13 million in back wages found due for more than 9,100 workers.
In a fifth of the investigations, companies in violation paid more than $10,000 in back wages according to ProPublica.
As the oil and gas industry grows and becomes more profitable, employees are earning lower wages. At the same time higher incidences of on-shore and offshore injuries are being reported.
The Lambert Firm represents oil and gas workers. If you believe you or a loved one has been injured or you believe you are being underpaid, please contact The Lambert Firm today at 1-800-521-1750.