Contractors involved in natural gas extraction in the
Marcellus Shale region of Pennsylvania and West Virginia must pay nearly $4.5
million in back wages to more than 5,000 workers, following a two-year U.S.
Department of Labor investigation.
“An ongoing multi-year enforcement initiative conducted
by the U.S. Department of Labor’s Wage and Hour Division offices in
Wilkes-Barre and Pittsburgh from 2012 to 2014 found significant violations of
the Fair Labor Standards Act (FLSA) which resulted in employers agreeing to pay
$4,498,547 in back wages to 5,310 employees,” read a Labor Department statement
released on Tuesday.
“It’s part of an ongoing initiative, a multi-year
initiative,” said Labor Department spokeswoman Leni Fortson of the Philadelphia
office. “These are the findings from the first three years.”
A list of the violating companies can be found attached
to this story at timesleader.com.
The FLSA requires that covered employees be paid at least
the federal minimum wage of $7.25 per hour, as well as time and one-half their
regular rates for every hour they work beyond 40 per week, according to the
department.
Division investigators attribute the labor violations in
part to the industry’s structure.
According to the department, most of the violations were
due to the improper payment of overtime.
“In some cases, employees’ production bonuses were not
included in the regular rate of pay to determine the correct overtime rate of
pay,” the release stated. “Under the FLSA, all pay received by employees during
the workweek must be factored when determining the overtime premium to be paid.
Investigators also found that some salaried employees were misclassified as
exempt from the FLSA overtime provision, and were not paid an overtime premium
regardless of the number of hours they worked.”
Companies such as Chesapeake Energy, Citrus Energy and
Anadarko Petroleum own the mineral rights and hire technical and specialized
workers to identify and develop well sites, complete drilling and bring wells
online for production. Subcontractors are then used for most the work at the
well site, including drilling and geological services, land leasing and
acquisition service, and oilfield support services companies, the Labor
Department said.
“Secondary subcontractors are often hired for more
specialized work and ancillary support services like welding, laboratory
services, landscaping, pipeline maintenance, safety and traffic control, and
water treatment. Frequently, this level of services does not take place
directly at the well sites,” according to the release.
“The more fractured an industry is, the more likely there
will be significant labor law violations,” stated Mark Watson, the department’s
regional administrator for the Northeast. “Companies further down the contracting
chain feel pressured to provide services at a competitive and often cut-rate
price point. They are also more likely to cut corners and offer a low bid to
secure a business opportunity.”
According to Dr. David Weil, administrator of the Wage
and Hour Division, “The oil and gas industry is one of the most fissured
industries. Job sites that used to be run by a single company can now have
dozens of smaller contractors performing work, which can create downward
economic pressure on lower level subcontractors. Given the fissured landscape,
this is an industry ripe for noncompliance.”
The Labor Department said it also is examining potential
wage and hour violations in other parts of the country.
Source: Times
Leader
No comments:
Post a Comment