Court finds oil and gas drilling contractor failed to include shift differentials and bonuses in regular rate of pay to calculate overtime wages owed
October 22, 2018, DALLAS. – Today, the national law firm Baron & Budd announced that it won an unpaid overtime wage trial on behalf of 137 oilfield workers in U.S. District Court in the Northern District of Texas against Latshaw Drilling Company, LLC (Case 3:15-cv-01173-N). In a ruling on Oct. 12, 2018, U.S. District Judge David C. Godbey found that Latshaw Drilling failed to properly compensate employees under the Fair Labor Standards Act (FLSA) by not including bonuses and pay for working with oil based drilling mud when calculating the overtime wages owed those employees.
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.
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 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 Drilling 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.”
About Baron & Budd, P.C.
Baron & Budd, P.C. is among the largest and most accomplished plaintiffs’ law firms in the country. With more than 40-years of experience, Baron & Budd has the expertise and resources to handle complex litigation throughout the United States. As a law firm that takes pride in remaining at the forefront of litigation, Baron & Budd has spearheaded many significant cases for hundreds of entities and thousands of individuals. Since the firm was founded in 1977, Baron & Budd has achieved substantial national acclaim for its work on cutting-edge litigation, trying hundreds of cases to verdict and settling tens of thousands of cases in areas of litigation as diverse as dangerous pharmaceuticals and defective medical devices, asbestos and mesothelioma, environmental contamination, fraudulent banking practices, motor vehicles, employment, and other consumer fraud issues.