Misclassified Oil Workers Recover Back Wages

Oilfield Drilling Equipment & Rig Co., which does business as ODERCO, has reached an agreement with the U.S. Department of Labor (DOL) to repay $137,788 in back wages for 139 oil field workers that were deemed misclassified. The DOL determined that the Houston-based company violated the Fair Labor Standards Act (FLSA) by misclassifying oil workers as independent contractors, which denied their right to collect overtime pay and other benefits. 

ODERCO is a company that manufactures oil field drilling and rigging equipment, with locations in Houston and Abu Dhabi, United Arab Emirates. They have stated that they will pay the back wages and comply with FLSA regulations in the future, but did not hold back in expressing their disagreement with the DOL’s findings. ODERCO President Samir Ghalayini stated that the ruling was unfair, considering the workers signed agreements saying that they were independent contractors. He added that competing oil companies also classified their workers as independent contractors.

The Department of Labor has consistently maintained that employee misclassification is an “alarming trend” that leads to wage violations, especially in industries that employ low-wage workers. In this particular case, workers were classified as “independent contractors” instead of company employees. This is a difficult distinction to determine, and thus many employees are unknowingly misclassified as independent contractors. An employee is considered a worker that has the “right to control” what needs to be done and how it should be done. Conversely, independent contractors are told what task needs to be done and only determine how the task should be completed. 

Though the labeling of employees as independent contractors is a common way employees are misclassified, it is not the only method. Employees may be given positions with managerial titles, but are not provided the responsibility or benefits of such a position. Classifying hourly employees as part of the management team is a common overtime abuse, as executives and managers are generally not allowed to collect overtime pay. 

Employees misclassified by an employer may be entitled to back wages for underpayment or unpaid overtime. If you believe that your rights under the FLSA have been violated by your employer, contact an experienced overtime lawyer to pursue compensation. The Fair Labor Standards Act prohibits employers from taking adverse action against any employee who files a complaint regarding overtime violations or participates in an investigation initiated by the Department of Labor.