Marcellus Shale employers may be vulnerable to FLSA suits

On Behalf of | May 28, 2021 | Fair Labor Standards Act (FLSA) |

As many probably know, the Marcellus Shale region of Pennsylvania has proven to be rich in natural gas.

This resource is of great value since it is used as a source of energy in commercial and residential buildings alike. Not surprisingly, many companies are now taking advantage of this valuable business opportunity.

Taking advantage of this opportunity, of course, requires businesses to hire employees to do the work.

Businesses trying to save labor costs must follow the law when doing so

Because many different companies handle different parts of the extraction and processing of natural gas, it means workers likely report to different employers even if they are all working on the same project.

For those subcontracting at the bottom of the chain, the division of labor can be the source of financial pressure.

The setup requires subcontractors to operate at a low margin of profit, and this means that they will have to come up with ways to keep their labor and other costs down.

There is nothing wrong with cost-cutting per se, but businesses must follow the federal Fair Labor Standards Act, which sets nationwide minimum wage and overtime rules, when doing so.

In fact, within the previous decade, employers working in the area of the Marcellus Shale region had to pay almost $4.5 million in back wages to over 5,250 separate employees.

Many of these payments had to be paid because employers had improperly classified their salaried workers as exempt from overtime when they had no legal grounds for doing so.

Employers who are in Pennsylvania’s oil and gas industry should consider speaking with an experienced employment lawyer to be sure that their business plans do not get de-railed by wage and hour lawsuits.