Employers across a variety of industries have been subject to wage and hour class action claims for unpaid wages, and the oil and gas industry has not been spared. Given the high stakes, and the relatively low burden plaintiffs face in obtaining class certification early in these cases, oil and gas employers should examine their current practices for compliance with federal, state, and local laws. This article examines some of the more common practices that have been—and will continue to be—the subject of these wage-hour actions.

1. Payment of day rates. Certain workers, such as oil field engineers, pumpers, and drivers, often work on a “day rate,” which means the employee is paid a set amount per day without regard to the number of hours worked. While this is allowed under the Fair Labor Standards Act, the practice does not change an employee’s entitlement to overtime pay. To calculate the overtime, first you calculate the employee’s regular hourly rate, which is the total of all sums received at such day rates in the workweek divided by the total hours actually worked. The overtime is then calculated as half-time pay at this rate for all hours worked in excess of 40 in the workweek. As a result, it is critical for employers to track and maintain records of hours worked by day rate employees so that overtime can be properly paid.

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