Wage and Hour Division (WHD)
U.S. Department of Labor
HOUSTON -- Oilfield Drilling Equipment and Rig Co. Inc., doing business as ODERCO Inc. in Houston, has agreed to pay $137,788 in back wages for 139 oil field workers, following an investigation by the U.S. Department of Labor’s Wage and Hour Division that determined the employees had been misclassified as independent contractors and consequently denied overtime compensation for all hours of their work, in violation of the Fair Labor Standards Act.
ODERCO is a fabricating company primarily engaged in manufacturing oil field drilling and rigging equipment, with locations in Houston and Abu Dhabi, United Arab Emirates. The company’s Houston-based yard employs welders, fitters, crane operators, painters, mechanics and machinists.
“Employers such as ODERCO cannot evade their duties under the FLSA to pay minimum wage and overtime compensation by misclassifying employees as independent contractors,” said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. “There is no excuse for depriving workers of their rightful wages, and the resolution of this case demonstrates that the Labor Department will vigorously pursue violators to ensure accountability and compliance with the law.”
The investigation revealed that ODERCO improperly classified Houston employees as independent contractors, despite the existence of an FLSA-covered employment relationship between the parties. The company also paid employees “straight-time” wages, rather than time and one-half their regular rates for hours worked over 40 per week, as required under the FLSA.
ODERCO has agreed to pay the full amount of back wages, properly classify its employees and comply with the FLSA in the future.
The misclassification of employees as independent contractors is an alarming trend, particularly in industries such as construction that often employ low-wage, vulnerable workers, and in which the Wage and Hour Division historically has found significant wage violations. The practice is a serious threat both to employees and employers that obey the law. Too often employees are deprived of overtime and minimum wages, and forced to pay taxes that their employers are legally obligated to pay. Honest employers have a difficult time competing against scofflaws. The Labor Department is committed to ensuring that employees receive the pay and benefits to which they are legally entitled, and to level the playing field for employers that play by the rules.
In addition to overtime guidelines, under which regular rates include commissions, bonuses and incentive pay, the FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 an hour for all hours worked and that employers maintain accurate time and payroll records.
For more information about the FLSA and other federal wage laws, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243) or its Houston District Office at 713-339-5500. Information is also available on the Internet at http://www.dol.gov/whd.
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