New Mexico Company Agrees To Pay $595,000 In Back Wages

Jul 24, 2013

Morco Geological Services Inc., doing business as Morco Geological, has agreed to pay $595,737 in back wages to 121 current and former mud logging technicians following an investigation by the U.S. Labor Department’s Wage and Hour Division, which found violations of the minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act.

Investigators from the division’s Albuquerque District Office determined that Morco Geological improperly classified nonexempt employees, such as mud logging technicians, as exempt from overtime pay. It paid them a fixed daily rate without regard to the actual number of hours worked, rather than time and one-half their regular rates of pay for hours worked beyond 40 in a workweek. Minimum wage violations occurred when new technicians working 24-hour shifts were only paid $75 daily, which did not amount to the federal minimum wage of $7.25 per hour. The company also failed to maintain accurate records of employees’ work hours, as required.

“These mud logging technicians worked 24-hour shifts, often up to 100 hours in a workweek, performing physically and mentally demanding work. They were denied the basic minimum wage and overtime pay guaranteed them by law for their hard work,” said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. “These violations reflect one of the problems we’ve found in the oil and gas extraction industry—employees are improperly classified as exempt from the FLSA and are not paid the proper wages, in accordance with federal law. Our ongoing enforcement initiative seeks to identify and remedy such common violations to protect workers and ensure a level playing field for the law-abiding employers in this industry.”

Morco Geological provides well mud logging services for oil and gas drilling companies. The company has agreed to comply fully with the FLSA in the future. Payment of back wages is ongoing.

This investigation was conducted under a multiyear enforcement initiative focused on vendors who perform various phases of the oil and gas fracking process at active shale drilling sites throughout the Southwest. Initiative efforts in this fast-growing industry seek to inform workers of their rights and ensure FLSA compliance among oil and gas companies and other related businesses including, but not limited to trucking, lodging, haulers of water and stone, staffing service providers and other types of oil and gas supporting trades.

Under this ongoing initiative, the division is reaching out to employers and employer associations to provide them with compliance assistance information and secure their cooperation in promoting industry wide compliance. Similarly, the division is conducting outreach to workers and community groups to inform them of the initiative and departmental services, and to encourage workers to come forward with potential violations.