Personnel who often travel for work or work away from home are typically paid per diems. These per diem payments are intended to reimburse workers for the costs associated with lodging, meals, and other travel expenditures. Depending on how the per diem payments are calculated and paid out, they may need to be incorporated when calculating an employee’s pay rate for overtime.

Although miscalculating overtime pay rates is beneficial to the employer, it is an illegal tactic that greedily takes advantage of hard-working employees. If you think your employer may have unfairly calculated your overtime pay rate, an experienced workers’ rights attorney may be able to answer any questions you may have. Contact Lore Law Firm for a free and confidential review of your situation to determine if you have been appropriately paid for work performed over 40 hours.

Are Business Expenses Included When Calculating Overtime Pay in Texas?

Many Texas employers are quick to exclude per diem payments from workers’ overtime pay rates because it saves the company money on labor costs. However, this practice may be illegal, and a workers’ rights lawyer must evaluate the particular facts and situations to determine if their specific approach is allowed. Even if the practice is commonplace in your field of work or has been going on for many years, do not assume it is correct.

Over the years, employers have used countless tactics to get out of paying employees what they deserve. One method companies use to avoid paying overtime is disguising wages as business expenses.

Even some of the largest, wealthiest, and most influential companies have miscalculated overtime pay for their employees. These companies are defending their bottom lines by failing to calculate workers’ wages correctly when determining overtime pay rates. This helps cut labor costs and reduces or eliminates overtime pay but forces their workers to miss out on their total earned wages.

Texas Overtime Pay Rate Guidelines

In Texas, overtime pay rate guidelines regarding business expenses are as follows:

Reimbursements for actual business expenses (i.e., made under an accountable plan) do not count toward the regular rate for overtime calculation purposes, while reimbursements in excess of the actual amounts (those not made in accordance with an accountable plan) would be considered extra pay that would count toward the regular rate of pay – see section 778.217 of DOL’s wage and hour regulations for details.

Other than what an employer must reimburse to the employee in order to keep the employee’s pay at least at minimum wage, expense reimbursements do not constitute “wages” and may not be the subject of a Texas Payday Law wage claim (see 40 T.A.C. §825.25(d)).

Schedule a Free and Confidential Review of Your Overtime Pay With a Texas Attorney

If you are a Texas worker who receives per diem payments that vary based on the number of hours you have worked and your per diem is not included in your overtime pay rate, call our overtime pay attorneys for a free and confidential review. There is a chance that you and your coworkers may be missing out on substantial overtime pay.

Do you have any questions about your overtime pay rate? Do you believe you may have been the victim of wage theft due to an illegitimate per diem pay scheme? If so, contact a skilled workers’ rights attorney with the Lore Law Firm today by calling (713) 782-5291 or chatting with us here. The Lore Law Firm has fought to defend the rights of Texas workers in and out of the courtroom for over 25 years and has successfully recovered millions of dollars for thousands of employees across the nation.

Michael Lore is the founder of The Lore Law Firm. For over 25 years, his law practice and experience extend from representing individuals in all aspects of labor & employment law, with a concentration in class and collective actions seeking to recover unpaid back overtime wages, to matters involving executive severance negotiations, non-compete provisions and serious personal injury (work and non-work related). He has handled matters both in the state and federal courts nationwide as well as via related administrative agencies. If you have any questions about this article, you can contact Michael by using our chat functionality.