As an employer in the oil and gas industry, historically you may have found it better for your company to hire independent contractors rather than employees. You probably paid your contractors flat day rates rather than an hourly wage. But now these practices are being challenged and companies of all sizes — including oil and gas companies — are being audited by the U.S. Department of Labor (DOL).
My latest article in Ohio Gas & Oil Magazine’s September 2013 issue explains what companies in the oil and gas industry need to know about worker classification and provides insight on how to properly classify workers.
Three Main Categories for Proper Worker Classification
In my article, I touch upon three primary categories that the DOL evaluates. These areas of evaluation are meant to determine the degree of control and independence in the work relationship. The categories are as follows:
- Behavioral. This looks at whether or not you have the right to control what your worker does and how your worker performs his or her service.
- Financial. The facts examined here revolve around the economics of the relationship, including who dictates how and when your worker is paid. It also looks at whether or not your worker has to provide tools and supplies.
- Type and Nature of the Relationship. This is the relationship between you and your worker, such as whether or not there is a written contract between both parties and the permanency of the relationship.
All of these factors need to be considered when you determine whether you have an employee or an independent contractor. To learn more about what you need to do to ensure you’re in compliance with worker classification requirements, check out my full article.
Oil & Gas Worker Classification Help
Now is not the time to do things the way you’ve always done. Proactively review your worker classifications before a government agency comes knocking at your door. If you need help reviewing your personnel, contact Rea & Associates. Our Ohio oil & gas professionals can assist you in your efforts to properly classify your workers.
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