Chevron Settles Claims of Violated FLSA Regulations for $3.2 Million

Energy company Chevron Corp. has agreed to a $3.2 million settlement resolving class action lawsuit claims that the company violated FSLA regulations by misclassifying their drill set managers as independent contractors.

FLSA Regulations Lawsuit

The $3.2 million settlement agreement was submitted to Judge Jeffrey A. White of the Northern District of California on Feb. 8. Pending the judge’s approval, this settlement will resolve the claims alleged in the class action lawsuit brought against the energy company by plaintiffs Christopher M., James O., Donnie C., and Michael D.

The four named plaintiffs in the complaint allege that Chevron misclassified them as independent contractors, allowing the corporation to undercompensate them for their hours worked. The plaintiffs also claim that they were often required to work longer than their scheduled 12-hour shifts and were not compensated for these overtime hours. The lawsuit claims that these actions violated FLSA regulations.

The lawsuit, initially filed in April 2016, includes 16 plaintiffs, 34 Class Members, and a group of 37 workers included under California’s Private Attorney General Act (PAGA). The act allows employees to sue on behalf of themselves, others, or the state of California, provided that they submit 75 percent of any recovered compensation to the California Labor and Workforce Development Agency.

According to the settlement agreement, if approved, the $3.2 million settlement amount will be divided among the plaintiffs, Class Members, and PAGA representatives. The approximate amount expected to be awarded to each plaintiff is $29,406. As named plaintiffs, Christopher M. and James O. are expected to receive incentive awards of $12,500 each, and Michael D. is expected to be awarded $5,000.

What are the FLSA Regulations?

According to the United States Department of Labor, the Fair Labor Standards Act protects employees by establishing minimum wage and overtime requirements, and implementing recordkeeping and youth employment standards in both the public and private sectors.

According to FLSA regulations, covered and nonexempt workers are entitled to a federal minimum wage of $7.25 per hour. Additionally, overtime pay of at least one and a half times the regular hourly pay is required for overtime work, or more than 40 hours of work in a week. Employers are also required to pay Social Security, Medicare, and unemployment taxes on their employees wages.

However, independent contractors are not covered by these regulations. Independent contractors do not have to be paid time and a half for their overtime work. They are also individually responsible for paying their income and self-employment taxes. Due to the different regulations governing independent contractors, some employers purposefully misclassify their employees as independent contractors to avoid paying overtime and taxes.

Who is Affected?

Employee misclassification
is not confined to any specific industry. Workers in many different jobs may be subject to violations of FLSA regulations. If you have proof that your employer has misclassified you as an independent contractor, failed to pay you your owed overtime pay, or committed other wage and hour violations, you may be eligible to join a wage and hour violations investigation.

The Chevron FLSA Regulations Violation Lawsuit is Case No.: 4:16-cv-02089, in the U.S. District Court for the Northern District of California.

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