Drilling services company Major Drilling America Inc. is facing a proposed collective action lawsuit alleging unpaid overtime, off-the-clock work and improper wage calculations under federal labor law.
According to a complaint filed in the U.S. District Court for the District of Utah, driller Luis Velarde alleges that Major Drilling America Inc. failed to properly compensate workers for all hours worked and did not correctly calculate overtime pay.
The lawsuit brings overtime wage theft claims under the Fair Labor Standards Act (FLSA) and Minnesota wage laws. At this stage, the allegations remain unproven, and the company has not publicly responded to the claims.
Allegations of Off-the-Clock Work
Velarde’s complaint alleges that employees were required to perform certain job-related duties before officially clocking in, including putting on required safety gear and gathering equipment necessary for drilling operations.
Under the FLSA, employers must compensate employees for time spent performing work that is integral and indispensable to their primary job duties. If workers are required to complete job-related tasks before or after recorded hours, that time may be considered compensable.
Failure to pay employees for pre-shift or post-shift work is commonly cited in overtime wage theft claims.
Rounding Practices and Timekeeping Concerns
The lawsuit also challenges the company’s alleged practice of rounding employees’ time entries to the nearest quarter hour. While time rounding is not automatically unlawful, it may violate federal wage laws if it consistently benefits the employer and results in unpaid wages for employees.
Accurate timekeeping is a core requirement under the Fair Labor Standards Act. When rounding practices systematically reduce recorded hours, they can contribute to unpaid wage and hour violations.
Overtime Calculations and the “Regular Rate” of Pay
A central issue in the case involves overtime pay calculation. The complaint alleges that the company paid per diems and nondiscretionary bonuses but excluded those payments when determining employees’ regular rate of pay for overtime purposes.
Under the FLSA, overtime must generally be calculated at one and one-half times an employee’s regular rate of pay. The regular rate usually includes:
- Nondiscretionary bonuses
- Hourly wages
- Incentive compensation
- Payments that function as wages rather than expense reimbursements
If certain types of compensation are excluded improperly, employees may have unpaid overtime required by law. Misclassification of compensation in overtime pay calculation is a common issue in wage theft litigation.
What Is Overtime Wage Theft?
Overtime wage theft occurs when employees are not fully paid for hours worked beyond the statutory threshold, which is typically 40 hours per week under federal law. Examples of overtime wage theft may include:
- Requiring off-the-clock work
- Improperly rounding time records
- Not paying for required pre- or post-shift tasks
- Failing to include bonuses in overtime calculations
- Misclassifying workers as exempt from overtime
Wage theft does not always involve unpaid hourly wages. In many cases, it involves subtle payroll practices that reduce overtime compensation over time.
The FLSA was enacted to ensure workers receive fair pay for extended work hours and to discourage employers from overworking employees without proper compensation.
Collective and State Law Claims
The lawsuit seeks certification of a collective action under the FLSA and a class action under Minnesota state wage law. To avoid FLSA violations, non-exempt employees are entitled to overtime after 40 hours in a workweek.
Minnesota law requires overtime after 48 hours in a workweek. If the case is certified, employees in a similar situation may have the opportunity to join the lawsuit.
Why Overtime Compliance Matters
Wage and hour employment law protections exist to protect workers from underpayment and to promote fair competition among employers. When employers fail to properly compensate employees for overtime work, the financial impact can accumulate over time.
This can especially happen in industries where employees regularly work long shifts. Disputes involving unpaid overtime often require a detailed review of time records, payroll practices and compensation structures to determine whether wage theft occurred.
What Workers Should Know About Overtime Wage Theft
Employees who regularly work more than 40 hours per week should understand their overtime pay calculation. Common questions that may arise include:
- Is time spent preparing for work compensated?
- Has compensation been properly organized?
- Are bonuses included in overtime calculations?
- Are timekeeping practices accurately reflecting hours worked?
Understanding these factors can help workers determine whether they are paid in compliance with federal and state labor laws. Employees who believe they may have experienced overtime wage theft may consider reviewing their pay records or consulting a wage theft attorney to better understand their rights under the FLSA.
Protecting Workers’ Rights Under Federal Law
Minimum standards for wage payment and overtime are set by Fair Labor Standards Act protections. When there are disputes, courts evaluate whether employers complied with recordkeeping, compensation and overtime requirements.
As this case proceeds, the court will determine whether the allegations against Major Drilling America Inc. can be substantiated and whether the claims meet the requirements for collective or class certification.
If you believe you are have experienced FLSA violations or have been improperly compensated for hours worked, contact The Carlson Law Firm.
