Like most drilling rig companies, Latshaw Drilling’s employees work with water based drilling mud and oil based drilling mud. As is typical when working with oil based drilling mud, the Latshaw Drilling employees received additional pay. Many of those employees also received bonuses for completing drilling operations for Latshaw Drilling’s customers, commonly known as operators, on or ahead of a schedule. This is sometimes known as a bottom hole bonus or beating the curve in oilfield operations.
The Compensation Process
Like most oilfield workers, Latshaw Drilling’s drilling rig employees worked long hours – typically 80 or more hours per workweek. Although Latshaw Drilling generally paid those employees time and one-half their hourly rates of pay for overtime hours, Latshaw Drilling did not include bonuses and oil based mud pay, along with the hourly rate, when calculating the overtime wages owed.
Securing a Win for the Employees
The attorneys of Employment Law Group at Baron & Budd secured a successful order in the U.S. District Court in the Northern District of Texas against Latshaw Drilling for violations of the FLSA. The Court found that the failure to include bonuses and oil based mud pay resulted in an underpayment of the overtime wages the employees should have been paid under the Fair Labor Standards Act (“FLSA”). As referenced by the Court in its ruling, employers have the burden of proof to show that any money provided to its employees can be excluded from the calculation of overtime wages owed under the FLSA.
For example, an employee paid $20 per hour without receiving bonuses or oil based mud pay would typically be paid $30 per hour (time and one-half of $20 per hour) for hours worked over 40 in a workweek. However, if that employee also received oil based mud pay or bonus pay for that week, that pay should be divided by the total hours worked to re-calculate the base hourly rate, or regular rate as the FLSA calls it, to calculate the overtime wages owed. So, the overtime rate might be based on $23 per hour instead of $20 per hour, depending on the amount of additional pay and total hours worked.
Also, when an employer does not pay all FLSA overtime wages owed, it is typically required to pay double that amount to the affected employee. Some state overtime laws, such as those in New Mexico, can require an employer to pay three times the amount of overtime wages not timely paid.
“We are very pleased that Court ruled in favor of these hard working oilfield employees,” said Allen Vaught, lead attorney for Plaintiffs at the Latshaw Drilling trial and head of the Employment Law Group at Baron & Budd. “These Latshaw employees have worked hard in very tough working conditions in an industry that is important to America. With more American families struggling to get by, it’s only right that they receive a fair day’s pay for a fair day’s work, and I’m pleased that our team is able to help those workers.”
Employment Law Information
The employment law attorneys at Baron & Budd have represented thousands of employees throughout the United States. They are known and respected for their results and experience in the field of employment law. If you think that your employer might not be paying you all wages you are owed, including tips, overtime wages, or minimum wages, please contact us at 866-238-4143 or complete our contact form for a free and confidential case evaluation. There is no out of pocket cost to you for a consultation to learn more about your state or federal employment protections.