In a recent news release important to oil and gas workers throughout the country, the U.S. Department of Labor announced that it has reached a settlement deal with oil and gas industry employer Halliburton. The company had been operating in violation of various wage and hour laws, resulting in significant losses to employees. While the settlement figure totaled nearly $20 million, many experts believe that this settlement amount is in fact significantly less than what the true loss equals. The following is an overview of the Department of Labor’s investigation and subsequent settlement.
3 Important Facts About the Halliburton Settlement
The U.S. Department of Labor conducted an investigation into Halliburton, an oil and gas service provider, as part of an ongoing compliance initiative in the oil and gas industry in the Southwest and Northeast. The following are three important facts about the fine that subsequently resulted:
- Halliburton agreed to pay $18,293,557 to employees throughout the nation.
- This amount represents one of the largest recoveries of overtime wages in recent history.
- The number of employees set to benefit from this victory is 1,016.
Halliburton is one of the world’s largest providers of products and services to the energy industry. The company was founded in 1919, and today boasts more than 70,000 employees. These employees represent 140 nationalities and reside in more than 80 countries throughout the world.
Types of Workers Improperly Denied Overtime Compensation
As a result of its investigation, the U.S. Department of Labor determined that Halliburton incorrectly categorized employees in 28 job positions as being exempt from overtime. These salaried employees were not paid overtime compensation even though they had worked more than 40 hours in a workweek. The positions held by the employees include the following:
- Field service representatives
- Pipe recovery specialists
- Drilling Tech advisors
- Perforating specialists
- Reliability tech specialists
The company’s failure to pay these employees overtime constituted a violation of the Fair Labor Standards Act. In addition, the investigation noted that the company failed to keep accurate records of the hours that were worked by each employee.
The Department of Labor’s Position on the Settlement
After agreeing to the settlement, the U.S. Department of Labor issued several statements expressing the following about the investigation and subsequent result:
- The Department of Labor has a responsibility to ensure that workers receive their rightful wages, and takes this responsibility seriously.
- The settlement will give millions of dollars back to the hardworking employees who were denied their rightful compensation.
- The settlement is also important for leveling the playing field among employers. Those employers who do not abide by wage and hour laws harm not only employees, but also other employers who do follow the rules.
Unfortunately, despite the Department of Labor’s intent and efforts, the settlement obtained may ultimately prove to be far less than what the employees were truly entitled to receive.
Where Halliburton Went Wrong
To the detriment of Halliburton employees, the company failed to pay overtime compensation to certain employees, even when they worked above 40 hours in a week. This is in direct violation of the Fair Labor Standards Act. Under the Act, employees who are not otherwise exempt must be paid time and a half of their regular rates, including commissions, bonuses, and incentive pay, for hours worked beyond 40 in a given week. Just because an employee receives a salary does not mean that he or she is not eligible for overtime. There are certain exceptions to that rule available to employers; however, none of those exceptions applied in this case. For example, had the employees been administrative, professional employees, outside sales employees, or computer employees, Halliburton may have had a legitimate argument as to why it did not pay the employees overtime compensation. The company would have also had to show that certain tests were met relating to job responsibilities and overall compensation.
While the large settlement figure may seem like a significant victory for oil and gas workers, it is important to note that the true amount that was owed to the employees may have been significantly undervalued. Based on the number of employees involved and the total settlement figure, the average settlement for each worker is approximately $18,000. It is possible that the true figure each employee should be entitled to is at least $50,000.
Before accepting any settlement relating to this matter, it is crucial to seek legal guidance from an attorney who truly understands the industry. We are here to help. We encourage you to reach out today for more information at (888) 449-2068.