Oil And Gas Workers Routinely Cheated Of Wages

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. The DOL investigations have centered on what is known as worker "misclassification," an accounting gambit whereby companies treat full time employees as independent contractors paid hourly wages, and then fail to make good on their obligations. The technique, investigators and experts say, has become ever more common as small companies seek to gain contracts in an intensely competitive market by holding labor costs down.

In the complex, rapidly expanding oil and gas industry, much of the day to day work done on oil rigs and gas wells is sub-contracted out to smaller companies.

For the thousands of workers in the hundreds of different companies, a single standard is supposed to apply: by law, they must be paid more than minimum wage and they must be fairly compensated for any overtime accrued.

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. ProPublica obtained data for 350 of those cases from the agency. In over a fifth of the investigations, companies in violation paid more than $10,000 in back wages.
One of those companies was Morco Geological Services, a company providing mud logging services for other oil and gas drilling companies. In 2013, the DOL found that Morco was paying some workers $75 daily for working virtually round-the-clock shifts. The company eventually agreed to pay $595,737 in back wages to 121 workers following the DOL's investigation. In another significant case, Hutco, a company providing labor services to the oil and gas industry, ended up paying $1.9 million to 2,267 employees assigned to work in Louisiana, Mississippi and Texas.

Dr. David Weil, a former economics professor at Boston University who today heads the DOL'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.
84 percent of workers in the oil, gas and mining industry were employed by contractors in 2012.

Several investigations by the DOL show there are companies wilfully dodging their responsibilities. The violations – accidental or intentional – are being committed by companies large and small, lawyers and labor officials say.
"You would think that some of the larger companies would be better in terms of compliance, what we're seeing is these violations are really rampant in this industry and affect all sizes of companies," said Shanon Carson, a lawyer with Philadelphia-based Berger & Montague, who has represented several oil and gas workers.

The oil and gas industry is hardly the only industry to be afflicted with wage abuses. A recent investigation by McClatchy found that misclassification of workers was especially rampant in the construction industry, where companies flouted labor laws to evade taxes.

Worker rights groups and some lawyers believe there are likely thousands of mistreated workers unaware of protections under wage laws.

taken from longer article here

One of the comments:
" I'm tired of hearing that competition is the reason for lower wages. These companies that flout labor laws are doing it because... they can. And when caught, they pay a small fine -- now just the cost of doing business."

Absolutely! And SOYMB would add the reminder that the bottom line, the imperative for all business in capitalism, is profit is paramount - and the way to put a stop to it is to abolish the wages system along with the capitalist system itself.