As my colleague Laura Clawson has repeatedly reported, wage theft is one of the nation's major rip-offs. Employers steal from fast-food employees and software engineers and Amazon warehouse workers. They don't
call it stealing, of course.
A ProPublica review of U.S. Department of Labor investigations has found that the oil and gas industry is also rife with this kind of of corporate banditry. Naveena Sadasivam reports:
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 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.
The Department of Labor has gotten tougher on these rip-offs. Its budget for assessing the fairness of wages and hours has been increased, and hundreds of investigators have been added. Federal wage-and-hour lawsuits have increased, too, with 7,764 cases filed under the Fair Labor Standards Act last year alone. Nonetheless, Sadasivam points out, thousands of workers are unaware of the rules, particularly those who work in remote, rural areas. That's typical of the oil and gas industry. But, comparatively speaking, those are high-wage jobs. It's even worse for those working at the lower end of the scale:
According to Gordon Lafer at the Economic Policy Institute, "64 percent of low-wage workers have some amount of pay stolen out of their paychecks by their employers every week, including 26 percent who are effectively paid less than minimum wage. Fully three-quarters of workers who are due overtime have part or all of their earned overtime wages stolen by their employer."
While there's been increased action against this on the federal level, wage theft presents another example of why it is so important to focus attention on getting better lawmakers into place in state legislatures. States have been spending a lot of time modifying or eliminating overtime rules, making it tougher for ripped-off workers to recover unpaid wages and putting obstacles in the way of union organizing.