Oil Field Day Rate Workers and Overtime: What the Law Says

Oil and gas workers have some of the hardest jobs in the country. Twelve-hour shifts, seven days a week, three weeks at a stretch on a rig or in a remote location. And in many corners of the industry, the pay system has been the same for decades: a flat amount per day, with no overtime, regardless of how many hours actually go in. In 2023, the United States Supreme Court ruled that this model does not satisfy federal law. Here is what every oil field worker paid on a day rate should understand about overtime.

What “Day Rate” Pay Looks Like in the Oil Field

A “day rate” is a flat amount paid for each day worked. Work 8 hours, get the day rate. Work 16 hours, get the same day rate. The same amount appears on the paycheck whether the well was easy or whether the crew worked straight through the night.

For years, operators and service companies classified day-rate positions as “exempt” from overtime under FLSA Section 213(a)(1), assuming a sufficiently large day rate satisfied the law’s requirements. That assumption was wrong.

The Big Myth: “I Make Too Much to Get Overtime”

Many oil field workers have been told some version of this: “You make $200,000 a year. You’re a supervisor. You’re not entitled to overtime.” That statement reflects a fundamental misunderstanding of the FLSA.

The FLSA does not exempt a worker from overtime just because they earn a high income. To be lawfully classified as exempt, an employer must satisfy several requirements, including the “salary basis” test. That test requires that an exempt employee receive a predetermined amount each week that does not vary based on the quantity or quality of work performed.

A day rate, by its nature, varies with the number of days the worker is on the schedule. Work three days, get three day rates. Work seven, get seven. The pay is not a guaranteed predetermined weekly amount. That is the heart of the problem, and that is what the Supreme Court ruled in 2023.

The Helix v. Hewitt Decision: What Changed

In Helix Energy Solutions Group, Inc. v. Hewitt, 598 U.S. ___ (2023), the Supreme Court resolved a question that had divided lower courts for years. Michael Hewitt, a toolpusher, worked on an offshore oil rig for Helix Energy. He typically worked 12-hour days, seven days a week, for 28-day hitches. He supervised between 12 and 14 other workers. He was paid a day rate ranging from $963 to $1,341 per day, which amounted to more than $200,000 in annual compensation. He received no overtime.

Hewitt sued, arguing that the day-rate structure failed the salary basis test and that he was therefore entitled to overtime. The district court sided with the employer. The Fifth Circuit reversed. The Supreme Court, in a 6-3 decision, agreed with the Fifth Circuit.

The Court held that a worker paid solely on a daily rate does not satisfy the salary basis test, even when the day rate is large enough that the worker earns several hundred thousand dollars per year. The only way a day-rate worker can satisfy the test is if the employer guarantees a fixed weekly minimum amount that bears a reasonable relationship to actual earnings.

Oil and Gas Positions Commonly Paid on a Day Rate

Day-rate compensation appears across the industry in supervisor, technical, and specialist roles. Positions that have been the subject of overtime litigation include toolpushers, drillers, MWD and LWD technicians, directional drillers, mud engineers, field service technicians, wireline operators, flowback operators, frac field supervisors, solids control technicians, pipeline inspectors, HSE supervisors, and consultants paid through staffing agencies.

Whether any particular worker has a valid overtime claim depends on how they are actually paid, whether the employer provided a § 541.604(b)-compliant weekly guarantee, and what their actual duties involve. A title alone does not determine the answer.

How Much Can You Recover?

When a day-rate worker is found to be non-exempt, unpaid overtime is calculated by dividing the worker’s total weekly compensation by total hours worked that week. For a worker on the kind of schedule common in the field — 84 hours per week, week after week — the unpaid overtime can be substantial.

Under the FLSA, a worker who prevails may recover:

• Back overtime wages for hours worked over 40 per workweek during the limitations period.
• Liquidated damages equal to the unpaid overtime, effectively doubling the recovery, under 29 U.S.C. § 216(b).
• Attorney’s fees and court costs, which the FLSA generally requires the employer to pay if the worker prevails.
• Interest on unpaid wages where applicable.

State wage and hour laws may provide additional protections and longer statutes of limitations.

How Much Time Do You Have?

The FLSA imposes strict deadlines on wage claims: two years from the date of violation in most cases, or three years if the employer’s violation was willful. State laws sometimes provide longer windows. Each day a claim sits unfiled is a day of older back pay potentially lost from the back end of the limitations window.

What to Do If You Were Paid a Day Rate Without Overtime

Keep your own records. Save pay stubs, daily time sheets, hitch schedules, and any communications about your pay rate or classification.

Document the pay structure. Was your day rate truly fixed? Did you receive per diem, bonuses, or other allowances? Did your employer guarantee you a minimum weekly amount?

Note the schedule. How many hours per hitch? Were the hours documented anywhere?

Consult an FLSA attorney before the statute of limitations runs. Many oil field wage cases are handled on a contingency-fee basis, meaning a worker generally pays no attorney’s fees unless a recovery is obtained.

The Law Has Caught Up With the Day Rate Model

For decades, oil and gas employers paid field workers on day rates and assumed the structure was lawful because the workers earned good money. Helix Energy Solutions Group, Inc. v. Hewitt made clear that the structure, by itself, does not satisfy the FLSA’s salary basis test. Workers paid solely on a day rate without a § 541.604(b)-compliant weekly guarantee may be entitled to overtime, regardless of total annual compensation or job title. Whether any particular worker has a valid claim depends on the specific facts of their employment and the applicable law.

Josephson Dunlap, Lawyers for the Workers®, represents oil and gas workers across the country in wage and hour matters. We offer confidential case evaluations at no cost.