Oil and gas contractor attempted to disguise wages as reimbursement payments
Oil and gas industry contractor Henkels & McCoy Inc. paid more than $1 million in back wages to hundreds of employees for violating worker protection laws after the findings of a U.S. Department of Labor investigation was upheld by a Pennsylvania federal court order.
According to a press release, the order in the U.S. District Court for the Eastern District of Pennsylvania in Philadelphia led Henkels & McCoy Inc. to pay $1,085,830 in back wages and damages for failing to pay required overtime wages to 362 workers at 11 worksites.
The national infrastructure contractor must pay $542,915 in back wages and an equal amount in liquidated damages to the affected employees working as machine operators and laborers in Pennsylvania, Connecticut, Georgia, New York and West Virginia.
The lawsuit followed an investigation by the department’s Wage and Hour Division that found the employer violated overtime and record-keeping requirements of the Fair Labor Standards Act. The division determined the violations occurred during construction of interstate natural gas pipelines and at other natural gas facilities in the five states.
Henkels & McCoy violated the FLSA when the company:
- Failed to pay workers required overtime rates when they worked more than 40 hours in a workweek. These employees averaged 60-hour workweeks.
- Failed to include daily lump sum payments made to workers when calculating their overtime rates. The employer characterized these payments as “per diems,” despite the fact that they had no relationship to any actual travel or work-related expenses.
- Paid operators a daily lump sum characterized as “truck rental pay,” but again failed to include these payments in operators’ regular rates when calculating their overtime pay. The employer paid these lump sums to operators for each day they worked, regardless of whether the operators actually used their personally owned vehicles for any work-related purposes.
- Failed to keep accurate records of employee travel or work-related expenses, when employees used personally owned vehicles for any work-related purposes.
“Hard-working employees in the construction industry deserve to be paid every cent they have earned,” said Wage and Hour Division Principal Deputy Administrator Jessica Looman.
“The U.S. Department of Labor holds employers accountable, and we hope that other employers in this industry use the outcome of this investigation as an opportunity to review their own pay practices to ensure they comply with the law.”
