{"id":14127,"date":"2014-12-21T18:36:52","date_gmt":"2014-12-21T18:36:52","guid":{"rendered":"http:\/\/independentweekender.com\/?p=14127"},"modified":"2014-12-21T18:36:52","modified_gmt":"2014-12-21T18:36:52","slug":"shale-gas-industry-ripe-for-noncompliance-with-wage-law","status":"publish","type":"post","link":"https:\/\/www.greenstreetdata.com\/PS\/2014\/12\/21\/shale-gas-industry-ripe-for-noncompliance-with-wage-law\/","title":{"rendered":"Shale gas industry “ripe for noncompliance” with wage law"},"content":{"rendered":"

BY BRENDAN GIBBONS<\/strong>
\n Times-Shamrock Writer<\/strong><\/p>\n

The \u201cfissured landscape\u201d of the shale gas industry is drawing regulators\u2019 eyes as they seek to enforce labor laws, U.S. Department of Labor officials said.<\/p>\n

On Tuesday (Dec. 9), the department announced an agreement with roughly 145 oil and gas employers to pay a combined $4.5 million in back wages to 5,300 workers tapping into the Marcellus Shale. The money will go to workers, not the U.S. Treasury.<\/p>\n

The industry\u2019s structure, with relatively few significant entities at the top and hundreds or thousands of vendors beneath them, drew regulators\u2019 focus, Wilkes-Barre district director Alfonso Gristina said.<\/p>\n

\u201cThe further we go down in that business structure, for a variety of reasons, we find more violations,\u201d he said.<\/p>\n

Labor officials in Wilkes-Barre and Pittsburgh began investigating in 2012. Their probe netted some top service firms with operations all over the world, including giants Schlumberger and Baker Hughes.<\/p>\n

They also targeted smaller firms, some local, such as Roadwave LLC, a Blakely-based water trucking business, Pittston Twp.-based Linde Corp., which builds pipelines, among other services, and water trucking and traffic control business Energy Construction Management of Williamsport.<\/p>\n

All did not return phone calls or declined to comment.<\/p>\n

Cabot Oil & Gas Corp. was the only exploration and production company that owed significant overtime, according to a list of violators the Labor department shared. The company has major gas operations in Susquehanna County.<\/p>\n

Cabot owed 140 employees a total of $18,547.60. Its subsidiary GasSearch Drilling Services Corp. owed $46,225 to 169 workers.<\/p>\n

Cabot spokesman George Stark said the company worked with the labor department to fully understand the regulations and factors to determine compliance.<\/p>\n

\u201cWe have been in full compliance with these regulations for more than a year,\u201d he said.<\/p>\n

Other exploration and production companies on the list owed less: Exco Resources owed $3,934, Stone Energy Corp. owed $2,696, and Rex Energy Corp. owed $162.<\/p>\n

Most companies did not mean to deprive workers of overtime wages owed to them under the federal Fair Labor Standards Act, Gristina said.<\/p>\n

The department\u2019s announcement \u201cwould lead one to conclude that the noncompliance is exclusively related to intentional disregard for the rules to make a profit,\u201d he said. \u201cThat would be unfair to a lot of firms that we investigated that simply did not know the proper computation for overtime.\u201d<\/p>\n

For example, if an employee\u2019s wages are $10 per hour, an employer owes the worker time-and-a-half, or $15, for the 41st hour of work in a week and beyond, he explained.<\/p>\n

But if the employer offers monetary bonuses or incentives, that additional money needs to be factored into the overtime calculation, he said.<\/p>\n

The \u201cfissured\u201d structure of the shale gas industry creates an environment that makes such noncompliance more likely, he said.<\/p>\n

Marcellus Shale Coalition spokesman Travis Windle did not agree with this description of the industry.
\n\u201cCreating and supporting good-paying jobs across a diverse and growing supply chain, made up overwhelmingly of small- and medium-sized locally-based businesses, has been and continues to be a top industry priority,\u201d he said in an email, adding that the industry is \u201cdeeply committed to compliance\u201d with all laws and regulations, including labor laws.<\/p>\n

Windle pointed out that wages for oil and gas core and ancillary industries are well above the average for all industries in Pennsylvania \u2014 $49,586 higher for core and $15,429 higher for ancillary, according to the latest data from the state Department of Labor & Industry.<\/p>\n

Though it evokes images of shattered shale underground, that \u201cfissured\u201d phrase comes from the research of David Weil, Ph.D., whose studies in supply-chain restructuring have significantly influenced the department\u2019s work, Gristina said. Dr. Weil became administrator of the labor department\u2019s wage and hour division in May.<\/p>\n

While at Harvard University, Dr. Weil wrote a book titled, \u201cThe Fissured Workplace,\u201d about the effect of big businesses outsourcing work to small companies.<\/p>\n

\u201cWhen you shed employment and you say, \u2018You\u2019re no longer my janitor, but I am hiring a janitorial service provider,\u2019… so I am paying a price for a service, rather than a wage for a labor activity, that whole fairness dynamic changes,\u201d he said in interview posted on YouTube.<\/p>\n

In Tuesday\u2019s news release, Dr. Weil called shale gas \u201can industry ripe for noncompliance.\u201d The Department of Labor targeted it to most efficiently use taxpayer money, Gristina said.<\/p>\n

The Fair Labor Standards Act applies to more than 7 million firms in the U.S., he said, with only about 1,000 wage hour investigators to police them. That\u2019s why former administrator Nancy Leppink applied Dr. Weil\u2019s research and \u201creally substantially changed the way we do business at this agency,\u201d he said.<\/p>\n

Now the agency goes after industries that have this structure, he said, offering hotels as another example. Major hotel chains usually hire contractors for housekeeping, landscaping and restaurant management instead of keeping the work in-house.<\/p>\n

Ultimately, the Department of Labor hopes to catch the attention of the largest companies at the top of the shale gas chain and persuade them to encourage compliance among their contractors, Gristina said.<\/p>\n

Most OT owed
\n\u2022Greene Energy Group LLC, $1,070,183
\n\u2022Nexus Energy Services Inc., $1,047,038
\n\u2022TestAmerica, $191,910
\n\u2022Crescent Directional Drilling, $185,740
\n\u2022Deep Well Services, $177,654
\n\u2022Groundwater and Environmental Services, $171,821
\n\u2022MBI Energy Services, $147,309
\n\u2022Sunburst Consulting, $134,512
\n\u2022Panzella Trucking, $134,160
\n\u2022Energy Construction Management, $97,821<\/p>\n","protected":false},"excerpt":{"rendered":"

BY BRENDAN GIBBONS Times-Shamrock Writer The \u201cfissured landscape\u201d of the shale gas industry is drawing regulators\u2019 eyes as they seek to enforce labor laws, U.S….<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[],"tags":[],"class_list":["post-14127","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"\nShale gas industry "ripe for noncompliance" with wage law - PS<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.greenstreetdata.com\/PS\/2014\/12\/21\/shale-gas-industry-ripe-for-noncompliance-with-wage-law\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Shale gas industry "ripe for noncompliance" with wage law - 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