Industrial Contractor — Welders and Inspectors Misclassified
Industrial Contractor — Welders and Inspectors Misclassified as Independent Contractors, Denied Overtime
VGas LLC | Welders and Quality Control Inspectors | Houston, Texas
Workers hired by VGas LLC to perform welding and quality control inspection work at industrial job sites were classified by the company as independent contractors rather than employees. Under that classification, they were paid an hourly rate for every hour they worked, including hours well beyond 40 in a week, but received no overtime premium for those additional hours. Court filings allege that one worker regularly put in 50 to 63 hours a week, while another sometimes worked 70 hours a week, Monday through Saturday from approximately 6:00 a.m. to 7:00 p.m., with no additional compensation for the overtime hours.
Buenker Law filed a federal collective action lawsuit against VGas LLC, a Delaware limited liability company that performs industrial and fabrication work in Texas, on behalf of two named plaintiffs: Santos Ozuna, a welder paid $35.00 per hour, and Leonardo Martinez, a quality control inspector paid $34.00 per hour. The lawsuit, filed in the Southern District of Texas, Houston Division, alleges that VGas systematically misclassified its hourly workers as independent contractors to avoid paying overtime compensation, as well as payroll taxes, unemployment insurance premiums, and workers' compensation coverage. The complaint further alleges that by misclassifying workers and avoiding those costs, VGas gained an unfair competitive advantage over employers who comply with the law.
Under the Fair Labor Standards Act, the label an employer places on a worker is not what determines legal status. What governs is the economic reality of the working relationship. Courts examine multiple factors: how much control the company exercised over how and when work was performed; whether the worker had a genuine opportunity for profit or loss based on their own business decisions; whether the work was integral to the company's core business; and how permanent the relationship was. Workers who are economically dependent on a single company, perform work central to that company's operations, and work under the company's direction are generally employees under the FLSA regardless of what any contract says. Employees, unlike independent contractors, are entitled to one-and-a-half times their regular rate of pay for every hour worked beyond 40 in a workweek.
The lawsuit was filed as a collective action on behalf of all workers employed or engaged by VGas LLC as independent contractors on an hourly basis who were not paid overtime for hours worked over 40 in any workweek during the three-year period preceding the filing of the complaint. This case is currently pending in federal court in Houston, Texas.
The complaint expressly alleges that VGas's misclassification of its workforce was intentional and knowing, not an administrative error. According to the lawsuit, the company deliberately structured its workforce as contractors to reduce labor costs and gain a competitive edge over employers who correctly classify and pay their workers. Under the FLSA, when an employer knowingly or willfully violates the overtime requirement, the statute of limitations extends from two years to three years, and courts may award liquidated damages equal to the unpaid wages, effectively doubling the total amount the employer owes.
Workers in similar situations may have legal rights under the FLSA. Because the complaint alleges that the employer acted intentionally and knowingly in violation of federal law, affected workers may be entitled to recover three years of back wages. Time limits apply.
