Halliburton Pays $18.3 Million In Back Wages After Labor Department Investigation

Halliburton is paying $18.3 million in back wages to more than 1,000 U.S. field workers who were misclassified as salaried professionals and thus exempt from overtime.

A federal inquiry that began in Albuquerque two years ago into pay practices at Halliburton has resulted in checks totaling $18.3 million in back wages for more than 1,000 field workers nationwide.

The investigation, part of the U.S. Department of Labor’s initiative into wage practices in the oil and gas industry, focused on Halliburton’s misclassification of employees nationwide in 28 occupations as salaried professionals and, thereby, exempt from overtime and minimum wages. The jobs include field service representatives, pipe recovery specialists, drilling tech advisers, perforating specialists and reliability tech specialists.

While the average payout was $18,000, one employee received $96,000, said Robin Mallett, Houston district director for the Labor Department’s wage and hour office. The smallest check was for $5,000.

Employees worked between 42 hours a week and 87 hours a week between May 2013 and May 2015, she said.

It’s a record-setting amount for the Houston office, said Mallett, who said she could not recall another instance in her 26-year career when the agency here recovered that much in back wages from one company. Some 380 checks went to Halliburton workers in Texas. Mallett said the agency is considering whether to assess financial penalties in addition to the back wages.

Halliburton identified some jobs it misclassified as exempt and reclassified them following a self-audit, according to the company.

“Halliburton has worked earnestly and cooperatively with the U.S. Department of Labor to equitably resolve this situation,” Susie McMichael, senior public relations representative for Halliburton, said in a written statement.

Although the investigation began in Albuquerque, agency officials transferred it to Houston because that is where Halliburton is headquartered.

Mallett said she couldn’t comment on what sparked the initial inquiry.

The announcement comes at a time when the federal government is cracking down on wage violations in the oil and gas industry.

In recent months, the department recovered $600,000 in back wages from a mud company for 121 employees who were paid a flat day rate rather than by the hour. More than 2,000 employees at an industrial services provider in Louisiana received $1.9 million because their per diem pay was not included in overtime calculations. And an oil drilling company paid $600,000 to 133 roughnecks and crane operators who were misclassified as independent contractors, Mallett said.

“There is a ton of oil field litigation going on right now,” said Rex Burch, an employment lawyer in Houston who represents workers. While he is not involved in the recent Labor Department case, he is representing hundreds of oil field workers at Halliburton with overtime claims. The workers have filed arbitration claims against Halliburton. Employees must sign arbitration agreements with the company as a condition of employment.

Arbitration cases are confidential and Halliburton cannot comment while they are in progress, McMichael said.

Baker Hughes settled a similar complaint in March after a field specialist filed a lawsuit in federal court in Galveston, saying the Houston-based company did not pay overtime wages to him and at least 200 co-workers who regularly put in more than 80 hours per week.

Field specialist Robert Lea sued Baker Hughes in 2013, claiming the oil-field-services giant told new hires they were expected to work long stretches and be on call around-the-clock, but did not properly reimburse the workers for the excess hours.

Under terms of the agreement, Baker Hughes agreed to make payments to a group of field specialists that qualified as part of the class action. The total amount of the settlement was not disclosed.

Baker Hughes did not comment.

Burch speculates the fall in oil prices is encouraging more workers to come forward.

“When there is a layoff, my phone explodes,” he said.

Sometimes workers receive higher salaries to compensate them for the long hours in the 24/7 industry, Mallett said. Other times, employees are improperly paid straight time rather than the time-and-one-half rate when they work more than 40 hours a week.

The agency has focused its oil and gas initiative in key oil-producing states in the middle swath of the country. Besides Texas, that includes New Mexico, Colorado, Arkansas, Louisiana, Oklahoma, Utah, North Dakota, South Dakota, Montana and Wyoming.

Not counting the Halliburton settlement, the two-year effort has collected more than $15 million in back wages for 8,400 employees.

By L.M. Sixel

Source: Houston Chronicle