The Fair Labor Standards Act of 1938 protects employees by establishing minimum wage, overtime pay and other regulations to ensure fair employment. Businesses do well abiding by these laws to prevent expensive litigation from mistreated workers.
Not all lawsuits stem from intentional mistreatment by employers to save money, however. Sometimes poor record keeping, ignorance of the law and other negligent acts can land businesses in the courtroom. Such violations of the FLSA, intentional or not, are ever present in the gas drilling industry. Be aware of these common problems to avoid a lawsuit on your hands.
No overtime pay
Federal law mandates that employees must receive 150 percent of their wages (time and a half) for hours that go above a 40-hour workweek. Employers who fail to properly compensate workers will end up having to pay back wages plus the possibility of damages. In the long run, it is more cost-effective to just pay employees their fair share instead of trying to cut corners to make up for lower profit.
Other payment violations
In addition to withholding overtime, some companies also withhold bonuses. Others pay a flat salary regardless of work hours. All nonpayment violations not only hurt employees but also the government by lost taxes and other fees.
The way in which most violators try to get out of following the FLSA, especially with overtime hours and payment, is by misclassifying employees so that they are exempt from protection under the law. With so much contracting and subcontracting in the gas drilling industry, it is easy to misclassify workers, even by accident.
However, honest mistakes do not save you from litigation. It is best to be proactive in understanding the law and to consult an employment law attorney to ensure compliance. Having an attorney is also beneficial in resolving disputes that do arise, in a way that satisfies both parties and keeps legal costs low.