Working on a Texas oil rig creates a lot of jobs and brings in a lot of money. But oil rigs are also dangerous places to work. When someone gets hurt, it’s important to figure out who is responsible so the injured worker can get fair compensation. This can be complicated, especially when both general contractors and subcontractors are involved.
Each person or company on an oil rig has specific jobs and responsibilities. Knowing who does what can make a big difference in your claim. This section explains the differences between general contractors and subcontractors, describes what each is responsible for, and looks at who may be legally responsible if an accident happens.
At Parks Law, our Texas oil rig injury lawyers are here to walk you through the legal process and help you understand every aspect of your case.
How General and Subcontractors Work in Texas
In Texas oil fields, many companies and skilled workers come together to finish big jobs safely and on time. The general contractor is the main person or company in charge. They bring in subcontractors to handle specific tasks like electrical work, plumbing, hanging drywall, or roofing.
These subcontractors have special skills that help the job get done fast and done right. Unfortunately, should an accident happen, having so many different roles can make it harder to figure out who is at fault.
General contractors on Texas oil rigs typically have the main contract with the property developer or owner, so they bear a huge amount of liability for the project. They have to ensure that the worksite is safe and all safety protocols have been followed. They also have to organize the subcontractors’ work in such a way that accidents and dangers are prevented as much as possible. Since subcontractors are hired to handle certain jobs, figuring out who is responsible when an accident happens can be more complicated.
Independent Contractors in the Texas Oil Industry
Independent contractors are used a lot in the oil industry, and there are clear benefits to doing so. Sometimes, however, companies make these decisions without fully considering the problems that can surface or the serious risks of misclassifying their workers.
Similar to other industries, the oil industry is closely watched by the U.S. Department of Labor and state investigators. Besides dealing with fines and citations from government agencies, these companies are also facing a growing number of lawsuits claiming they violated the Fair Labor Standards Act. In fact, these cases now happen more often than employment discrimination cases.
Using independent contractors can be helpful for oil and gas companies, but the HR and legal teams need to carefully think about both the benefits and the downsides before deciding to use them.
What Are the Benefits of Using Independent Contractors?
- Avoiding the cost of employee benefits: Employee benefits can add 20–50% on top of a worker’s regular pay. By hiring someone as an independent contractor instead of an employee, a company doesn’t have to provide health insurance, retirement plans, or other benefits, which can save a lot of money.
- Reducing tax costs: When a company hires an employee, it must pay federal payroll taxes, workers’ compensation, and unemployment insurance. These extra costs add up fast, and employees rarely even notice them. With independent contractors, companies don’t have to pay these expenses. Because of that, a company can sometimes pay a contractor higher rates without increasing its overall costs.
- Flexibility: When used correctly, independent contractors help a company react quickly to changing needs. Contractors can offer special skills or services that the company only needs once in a while or that can be done from a distance. For example, a company might hire well tenders or land agents as contractors to watch certain wells or help secure land rights for a project. This lets the company use local workers with the right skills without having to hire full-time employees in that area.
What Are the Drawbacks of Using Independent Contractors?
- Misclassification risks: Because government agencies and lawyers are watching more closely, companies need to be careful when deciding to use independent contractors. Agencies like the IRS, the EEOC, and the National Labor Relations Board often investigate whether workers are correctly labeled as contractors. If they think a company got it wrong, they may challenge that classification. These agencies use different tests to decide if someone is really a contractor, and the decision depends on the specific facts. The bigger problem is that work relationships can change over time. A setup that starts out looking like a contractor job can slowly turn into more of an employee job. Because of this, it can be hard to be completely sure a worker is classified correctly.
- Workers’ comp loss: Workers’ compensation costs money for employers, but it also protects them if an employee is injured or killed on the job. Independent contractors usually are not covered by workers’ comp, and while a contractor agreement might offer some protections, a company still needs to think carefully about the risks of not having that coverage.
- Loss of control: To classify someone as an independent contractor, the contractor, not the company, must be the one who controls how the work is done. Contractors often decide their own schedule, choose how to do the job, and can even hire their own helpers. If a company wants more control over the work, it may need to hire employees instead. When a company tries to control a contractor too much, it often leads to a finding that the worker was misclassified.
- Additional considerations: Independent contractors may work inside company buildings or have access to important company information. Because of this, companies need to protect their trade secrets and confidential data. Companies also need to make sure contractors do not discriminate, harass employees, or interfere with employees’ rights at work.
Independent contractors can be very helpful for companies, especially when they need special skill sets or flexibility. Since the industry is fraught with peril, oil companies need to be cognizant of conditions where it might be better to let an employee handle the task instead or reconsider a contractor’s current classification.
Oil Rig Accident Liability and Texas Law
Texas has rules designed to keep oil rigs safe. Both general contractors and subcontractors must follow these rules to help prevent accidents. OSHA, a federal safety agency, sets the standards everyone must follow, including rules about safety gear, worker training, and how to warn people about dangers on the job. Texas has its own safety rules to help keep workers safe, even though employers in the state are not required to carry workers’ compensation insurance.
If a subcontractor or a general contractor does not follow Texas safety laws or OSHA rules, they could be considered negligent. This can impact who is deemed liable for the accident. In Texas, injured workers can seek compensation, especially if the company or person at fault failed to meet their safety obligations.
How is Shared Liability Handled by Texas Courts?
Texas law states that more than one company and/or person can share liability for an oil rig accident, especially if multiple errors led to the incident. Texas follows the rule of modified comparative negligence. This means an injured worker can still get compensation, as long as they were not more than 50% responsible. The court looks at how much each party contributed to the accident to decide how much compensation is appropriate.
For instance, if the subcontractor and the general contractor both ignored safety procedures, they could both be held responsible for an injury. The court will assess the negligence committed by each party and assign each a percentage of fault. This will help to ensure that injured workers are still able to receive fair financial compensation if more than one party caused their accident.
Talk to a Texas Oil Rig Injury Lawyer Today
Oil rig accidents can be stressful and frightening, especially when more than one company is involved. The good news is that you don’t need to face the legal process on your own or fight for fair compensation without an advocate. One of our experienced Texas oil rig injury lawyers can explain the process to you, outline your legal options, and work hard in order to ensure that the at-fault parties are brought to book.
If you were injured in a Texas oil rig accident, call Parks Law at (713) 979-3500 or fill out the contact form on our website to schedule your free case consultation.