Pay Rules for US FIFO Workers

Understanding your pay rights as a Fly-In Fly-Out (FIFO) worker in the United States can be complicated. The unique nature of FIFO jobs—with long travel, remote worksites, and intense schedules—often blurs the lines on what counts as paid work time. This article breaks down the essential pay rules, including overtime pay, compensable travel time, day rates, and employee classification under the Fair Labor Standards Act (FLSA). Knowing these rules is crucial for ensuring you are paid fairly for every hour you work.

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The Fly-In Fly-Out Work Model in the U.S.

The Fly-In Fly-Out (FIFO) model is an essential strategy for industries like mining, oil and gas, and large-scale construction that operate in remote locations. This setup involves transporting employees to a job site for an extended work period (a "rotation" or "swing"), housing them on-site, and then flying them home for a block of time off. However, this unique lifestyle creates significant wage and hour compliance challenges, stretching traditional labor laws to their limits.

Defining the FIFO Arrangement

FIFO work is common in Alaska's energy sector and is also used by specialized contractors in states like North Dakota, Texas, and New Mexico. Employers typically cover all logistics: flights, ground transport, and lodging in dedicated camps that can range from basic to full-service. Work schedules are intense, with common rotations like 14 days on/7 days off (14/7) or 8 days on/6 days off (8/6). During the "on" period, employees often work 10-12 hour shifts every single day, leading to significant overtime.

The Legal Framework: Federal and State Oversight

Your pay as a FIFO worker is governed by federal and state laws. The primary federal law is the Fair Labor Standards Act (FLSA), which sets the national rules for minimum wage and overtime for non-exempt employees. State laws, which apply based on where the work is physically performed, can offer even greater protections. For example, FIFO work in Alaska is subject to state laws requiring daily overtime, a protection not found in federal law or in states like Texas. The core legal conflict in FIFO work is applying laws designed for a 9-to-5 world to a 24/7, employer-controlled environment, leading to frequent disputes over what counts as paid "hours worked."

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Foundational Principles of the FLSA

The unique structure of FIFO work does not create an exemption from the core rules of the Fair Labor Standards Act. These federal mandates are the non-negotiable baseline for your pay.

Minimum Wage and Overtime Mandates

The FLSA requires two key things for non-exempt workers:

1. Payment of at least the federal minimum wage for all hours worked.
2. Payment of overtime compensation at 1.5 times your "regular rate of pay" for any hours worked over 40 in a single workweek. This right cannot be waived.

The "Workweek" is the Basis for Calculation

Overtime is calculated on a workweek-by-workweek basis. A workweek is a fixed period of 168 hours (seven 24-hour periods). Critically, your employer cannot average your hours over two or more weeks. For example, if you work 84 hours one week and are off the next, your employer must pay you for 44 hours of overtime in that first week. The week off cannot be used to cancel out the overtime you already earned.

Employer Recordkeeping Obligations

The FLSA legally requires your employer to keep accurate records of your wages and all hours worked. If your employer fails to do this and a dispute arises, courts may allow you to estimate your hours, and the burden shifts to your employer to prove your estimate is unreasonable—a very difficult task without proper records.

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Determining Compensable "Hours Worked"

The most debated issue in FIFO pay is what counts as "hours worked." The FLSA says you must be paid for all time you are "suffered or permitted to work." In a remote, employer-controlled camp, this definition gets complicated.

Travel Time as Work Time

The Portal-to-Portal Act clarifies that a normal daily commute from your home to a worksite is not paid. But FIFO travel is not a normal commute.

• Long-Distance Travel to the Site: Travel that keeps you away from home overnight is generally compensable if it cuts across your normal working hours, even on a day off. While the Department of Labor has an enforcement policy that may not count travel time outside work hours, courts could still rule that the entire duration of mandatory travel is compensable because it's for the employer's benefit.
• Travel Between Camp and Worksite: The daily travel from the employer-provided camp to the actual mine or drill pad is a major point of contention. Courts are increasingly treating this as compensable work time, viewing the camp as a mandatory reporting location. This means the clock starts when you leave the camp, not when you arrive at the final worksite.

On-Site Time: When is "Down Time" Work Time?

Even after your shift ends, time spent at the remote camp can be considered work time if your freedom is restricted.

• "Engaged to Wait": If you are waiting for something that is part of your job (e.g., equipment repairs, weather clearance) and cannot use the time for your own purposes, you are "engaged to wait" and that time must be paid.
• On-Call Time: If you are required to remain on the employer's premises while on-call, that time is generally compensable. Because you can't leave the remote camp, post-shift on-call duty is very likely considered work time.

Sleep Time Deductions

For shifts lasting 24 hours or more, an employer may be able to deduct up to 8 hours of sleep time, but only if strict conditions are met. Failure to meet any one of these can make the deduction illegal.

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Calculating Overtime: The "Regular Rate"

Overtime must be paid at 1.5 times your "regular rate of pay." This rate is not just your hourly wage; it's an effective hourly rate that must include nearly all forms of compensation, a rule that is often violated through complex pay schemes.

The Per Diem Dilemma

Per diems are meant to be reimbursements for expenses. However, if a per diem payment is tied to the number of hours you work or your attendance (e.g., it's reduced if you work a partial shift), it's considered part of your wages. In this case, the entire per diem must be included in your "regular rate" calculation, which increases your overtime pay.

The Day Rate Trap

Paying a flat "day rate" is a common practice in the oil and gas industry, but it is a major compliance risk for employers. A day rate does not cover overtime. You are still owed an overtime premium for all hours worked over 40. A common and illegal practice is for employers to pay only the flat day rate with no extra overtime premium.

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Employee Classification and Misclassification Risks

One of the biggest wage violations is misclassifying an employee as "exempt" from overtime. To be legally exempt under the "white-collar" exemptions, an employee must meet strict duties, salary level, and salary basis tests.

The Impact of Helix Energy v. Hewitt

In a landmark 2023 decision, the U.S. Supreme Court ruled in Helix Energy v. Hewitt that an employee paid a day rate, regardless of how high their total pay is, does not meet the "salary basis" test. This means they are not exempt and are entitled to overtime. This decision invalidated a long-standing (and illegal) pay practice in the oil and gas industry, confirming that thousands of supervisors, specialists, and engineers paid a day rate have been misclassified for years.

Commonly Misclassified FIFO Roles

Beyond the day-rate issue, other roles are at high risk for misclassification:

• Engineers and Field Technicians: Having "engineer" in your title doesn't automatically make you exempt. If your primary job involves hands-on work, installation, maintenance, or following procedures rather than high-level, independent decision-making, you are likely non-exempt.
• Consultants and Independent Contractors: Many companies classify workers as independent contractors to avoid overtime and taxes. However, if the company controls your schedule, provides your equipment, and directs how you do your work, you are legally an employee and entitled to overtime.

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State-Level Pay Rule Analysis

Federal law is just the starting point. The laws of the state where you work can provide more protections. Employers must follow whichever law—federal or state—is more favorable to the employee.

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Enforcement, Litigation, and Compliance

Wage laws are enforced by the Department of Labor's Wage and Hour Division (WHD) and through private lawsuits. Due to widespread non-compliance, FIFO industries have become a major target for collective action lawsuits, where groups of "similarly situated" employees sue their employer for unpaid wages.

What You Can Do

If you believe you are not being paid correctly, you have rights.

• Keep Your Own Records: Keep a personal log of all your hours worked, including travel time, meetings, and on-call periods. Note your start and end times each day.
• Review Your Pay Stubs: Check to see if all hours are accounted for and if overtime is being calculated correctly. Question anything that seems wrong.
• File a Complaint: You can file a complaint with the WHD or consult with an employment lawyer who specializes in wage and hour law. The law protects you from retaliation for reporting potential violations.

The legal trend is clear: courts are applying a strict interpretation of wage laws and are not swayed by arguments based on "industry custom." Knowing your rights is the first step to ensuring you are paid every dollar you have rightfully earned.