Overtime pay for tipped employees in the state of Texas works differently from overtime pay for regular employees. The state and federal overtime laws protect both tipped and regular employees from not receiving their overtime pay.

If you suspect your employer has violated laws surrounding overtime pay, it may be time to seek the assistance of an attorney who is experienced in protecting workers’ rights. For example, your employer may have failed to pay you appropriately, whether minimum wage or overtime pay, or they may have implemented improper requirements surrounding tipping and tip sharing.

What Are Tipped Employees and How Are They Different?

Tipped employees are those who regularly make an additional thirty dollars or more per month in tips. In the state of Texas, regulations apply to tip pooling and tipping out. Employers may implement tip pooling, which requires the tipped employees to join a tip pool. 

However, employers have limits to what they can require for tipping out or tip pooling. For example, they cannot direct the employee to tip out or participate in tip pooling if the employee does earn enough to make  the necessary minimum wage.

Employees that do not usually receive tips are not eligible to participate in tip pooling or tipping out. Owners, managers and supervisor are also not eligible to participate in a tip pool. 

If an employer operates an invalid tip pooling arrangement that includes non-tipped workers, that violation removes the employer’s ability to pay servers a tipped-worker minimum wage of $2.13 per hour and claim a “tip credit”. The tip credit is a credit for tips earned by a tipped employee toward the employer’s obligation to pay that worker the full federal minimum wage. Absent this tip credit, the employer owes tipped employees the full federal minimum wage of $7.25 per hour and the corresponding overtime. 

How Is Overtime Handled with Tipped Employees?

Tipped employees, just like non-tipped employees, are eligible for overtime when working over forty hours in a single workweek. However, in Texas, the employer must pay tipped employees one and one-half times the hourly minimum wage of $7.25.

Employers can calculate time and a half in overtime wages based on the $7.25 minimum wage when the tipped employee’s total hourly earnings exceed the minimum wage. For example, an employer can base overtime pay on the minimum wage for an employee who makes $2.13 an hour plus tips, as long as the employee is ultimately earning a combined amount over the minimum wage each hour.

Employers cannot adjust  the workweek to avoid paying overtime. Employers are prohibited from rolling hours over to another week for an employee who goes over forty hours of work in a particular week. Employers are legally required to pay overtime when necessary, and they cannot offer paid time off or any other type of benefit in lieu of paying cash for overtime pay.

Speak with a Skilled Attorney at the Lore Law Firm Today with Questions on Your Tipped Employee Claim

If you believe that your employer has violated the law concerning overtime pay of tipped employees, it would be wise to speak with an attorney. Employment laws can be challenging to navigate due to their intricacy and complexity, but holding your employer accountable does not have to be complicated. 

If you have questions about overtime for tipped employees in the state of Texas or believe you may have a claim, reach out to the talented team of attorneys at the Lore Law Firm. After helping thousands of individuals recover millions of dollars over the past twenty-five years, they are prepared to help you. For a free review of your situation, fill out their easy online contact form or call 713-782-5291 to get started.