An investigation by the Department of Labor on compensation in the oil and gas industry has revealed that worker misclassification due to the complex web of subcontractors on different projects has led to underpayment of employees in the industry. “The problem of misclassification has become pervasive,” said Dr. David Weil, who runs the department’s Wage and Hour Division. “Employers are looking for opportunities in a changing business landscape at the employee’s expenses to cut corners as much as possible, leaving room for wage and hour violations.”
A ProPublica review of U.S. Department of Labor investigations shows that oil and gas workers – men and women often performing high-risk jobs – are routinely being underpaid, and the companies hiring them often are using accounting techniques to deny workers benefits such as medical leave or unemployment insurance.
In 2012, the DOL began a special enforcement initiative in its Northeast and Southwest regional offices targeting the fracking industry and its supporting industries. As of August this year, the agency has conducted 435 investigations resulting in over $13 million in back wages found due for more than 9,100 workers.
“We know that the oil and gas industry has a reputation of paying high wages, but the economic reality often is they receive large paychecks because of the number of hours they’re putting in,” said Betty Campbell, the Deputy Regional Administrator for the Wage and Hour Division’s Southwest Region.