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Overtime and your bonus payments – what you need to know!

In Texas, with the boom in fracking, the oil and gas industry is growing, creating new jobs now than it ever has before. In order to retain their employees that are being asked to work ever-increasing hours, employers are giving bonuses to their workers to show their appreciation. While this is good news for oilfield workers, oil and gas employers are often miscalculating their employees’ wages based on the bonuses. Bonuses are additional payments given to oilfield workers, in addition to their hourly wage or salary, for additional work done or to reward work, and often times must be included when calculating a worker’s overtime pay under the Fair Labor Standards Act (“FLSA”) of 1938. 

The Department of Labor (DOL) announced recently that during an investigation, it recovered more than $1.6 million owed to more than 2,500 employees in the oil and gas industry.  This investigation was promulgated by violations of the FLSA by employers, including the failure to include production bonuses in the regular rate of pay. Essentially, this affects the calculation for the overtime rate of pay that is due to the employers. Many employers pay bonuses or give certain incentives to employees without realizing that those payments may be reflected in the regular rate for overtime pay purposes. The FLSA is quite clear: all pay that is received by employees during the workweek, called regular rate of pay, must be factored in when determining any overtime premiums. 

The regular rate of pay includes all forms of remuneration for employment except discretionary bonuses. Discretionary bonuses are unexpected payments and are not included in the regular rate of pay because the employer still retains discretion over (1) whether the bonus will be paid at all and (2) the amount of the bonus. On the other hand, bonuses that are non-discretionary, meaning that the bonus was somehow promised to the employee so the employee expects payment, has to be totaled with other earnings to determine the regular rate of pay on which overtime pay is based. “Nondiscretionary” bonuses that would be required to be added to a worker’s regular rate when calculating overtime pay might include things like retention bonuses, completion bonuses, worker safety bonuses, and the like.  

Failure to include bonus payments in an employees overtime calculations could allow employees to recover big payouts from their employer. Have you received bonus payments for work performed over forty hours but those bonuses were not included in your overtime pay? If so, you may have a claim for unpaid overtime. Consider speaking with an experienced overtime attorney. Josh Borsellino is a Texas attorney who represents workers, particularly those in the oil and gas industry, for unpaid overtime claims. Josh fights for the rights of his workers and works on a contingency basis, meaning the client is not charged and Josh only gets paid if there is a recovery. He can be reached at 817.778.8670 or 432.242.7118.