Compliance with Texas Overtime Laws

Employers and employees both need to understand the Texas overtime laws. There are stiff penalties for those who willfully do not comply with these laws.  The state of Texas follows the federal labor laws, and has not adopted any of their own as some other states have done.

According to the Texas overtime laws, employers are required to pay their employees overtime pay for hours worked over forty hours a week. 

Texas overtime laws require that overtime pay should be no less than one and one-half times the employee’s regular rate of pay.  The only employees that should not receive overtime pay are those that are exempt. Texas follows the federal laws regarding exempt employees. 

Exempt employees are strictly defined by the Department of Labor and include employees such as executives, administrators, professionals, teachers and certain commissioned positions.

Texas overtime laws do not provide provisions for Holidays.  Some companies will pay their employees time and a half for working on federal holidays but the decision to do so varies from company to company.

Because Texas overtime laws are sometimes complex, it can be difficult for an employee to know if he or she should be paid overtime and there are many common misconceptions regarding overtime.  If your private employer is giving you comp time instead of paying you overtime, they are likely breaking the law. Many private employers assume it is OK to give their employees comp time instead of the overtime pay they are entitled to but it is illegal!

Employers often assign employees more work than can be done in forty hours. The employee often stays late without being paid or takes the work home. If your employer is aware of this, you are entitled to overtime. When an employee must correct mistakes in his or her work, the time must be treated as hours worked. The correction of errors, or “rework”, is hours worked, even when the employee voluntarily does the rework.

Time that an employee is required to be at work or allowed to work for his or her employer is hours worked. A person hired to do nothing or to do nothing but wait for something to do or something to happen is still working. The Supreme Court has stated that employees subject to the FLSA must be paid for all the time spent in “physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer of his business.”

Hours worked include all the time during which an employee is required or allowed to perform work for an employer, regardless of where the work is done, whether on the employer’s premises, at a designated work place, at home or at some other location.

It is the duty of management to exercise control and see that work is not performed if the employer does not want it to be performed. An employer cannot sit back and accept the benefits of an employee’s work without considering the time spent to be hours worked. Merely making a rule against such work is not enough. The employer has the power to enforce the rule and must make every effort to do so. Employees generally may not volunteer to perform work without the employer having to count the time as hours worked.

Have your own questions? Contact us and we can give you more information and review your specific circumstances. You can submit your information using the convenient online intake form, send an email or call Michael Lore.

Texas Labor Laws

Texas Overtime and Labor Attorney 

Texas Labor Laws address many issues relating to the relationship between employer and employee, including the rules for the payment of wages, overtime pay, final wages, the rules for authorized and unauthorized payroll deductions, and record keeping requirements.

If you believe you’ve been deprived of the compensation to which you’re legally entitled, please contact the Lore Law Firm. Our overtime rights lawyers represent Texas employees who have been subjected to workplace wage and hour violations and take cases on a contingent fee basis – no fee if no recovery of backpay.

What’s in This Article

a table of contents

Texas Wage and Overtime laws

While Texas does have state labor laws, any employee that is covered by the federal Fair Labor Standards Act (FLSA) is exempt from the Texas Minimum Wage Act.

Minimum Wage

Texas follows the Federal minimum wage which is currently $7.25 per hour.

Tip Credit

Tipped employees must be paid at least 2.13 per hour, as dictated by the FLSA.  This amount plus tips must equal at least the federal minimum wage amount.

Overtime Pay

Because Texas follows the Fair Labor Standards Act, employers are required to pay all non-exempt employees time and a half for all hours worked over 40 during a workweek.

When Overtime Doesn’t Apply / Overtime Exemptions

Most workers in Texas are entitled to overtime pay when they work more than 40 hours per week. In certain circumstances, however, there are exemptions. 

Employees engaged in executive, administrative, or professional capacities (and paid at least $455 per week on a salary basis) are exempt from the overtime requirement. Note that new minimum salary requirements for these overtime exemptions take effect in January 2020 and increase the minimum salary threshold to $684 per week (or $35,568 annually). This change in federal law will also apply to most workers in Texas when making the determination of whether they are classified as exempt or non-exempt from the overtime pay laws.

The overtime pay rate for minimum wage workers in Texas amounts to $10.88 per hour (1.5 x $7.25).

Mandatory Overtime

In general, an employer doesn’t violate overtime laws by requiring employees to work overtime, (i.e., “mandatory overtime”), as long as they are properly compensated at the premium rate required by law.  However, Texas state law does prohibit mandatory overtime for nurses under certain circumstances.

Misclassification of Independent Contractors

Misclassification occurs when a business treats its workers as independent contractors (or subcontractors) rather than employees to avoid legal obligations such as social security taxes, worker’s compensation, unemployment insurance and overtime pay.

While there are situations in which workers are legitimately running their own business and properly treated as independent contractors who are not entitled to receive overtime, employers are not allowed to mischaracterize employee roles to avoid paying overtime compensation

Merely labeling a worker as an independent contractor, or even entering into a written agreement, is not enough to avoid the labor laws on overtime pay. 

There are several factors to be considered in determining if a worker in Texas is an employee or independent contractor  (a/k/a 1099 employee).  This link gives further information about the factors to be considered when making the distinction between and employee and independent contractor under Texas state laws.

If properly classified as an independent contractor under Texas law, workers are typically eligible for only the specific compensation bargained for in a contract. 

Wage Payments

Employees must be paid at least twice per month under the Texas Payday Law unless the employee is exempt from overtime regulation under the Federal law.  Employers are required to pay exempt employees at least once a month.

If paid twice a month, each pay period should have as close to an equal number of days as possible.

Generally, an employer must set regular paydays, and pay all earned wages of an employee on time regardless of whether the employee has turned in a time sheet or punch card, quit without notice, or provided any other form or document required by the employer. In addition, earned wages must be paid on time whether or not the employer has received payment from a customer or client for a job on which the employee worked.

If payday falls on a nonworking day, such as a weekend or holiday, wages can the paid on a regular business day after the payday.

If an employee is laid off, fired, or discharged, final pay is due within six (6) calendar days.  If the employee quit, resigns, or retires, final pay is due on the next regularly scheduled pay day.   

Deductions from Wages

The only payroll deductions allowed per the Texas Payday law are as follows:

  • Court ordered deductions (such as child support, etc.)
  • State and Federal Law deductions, such as taxes
  • Deductions that the employee has authorized in writing.  However, even with written authorization from the employee, the deduction cannot bring the employee’s pay below minimum wage.

Meals & Breaks

Texas employers are not required to provide breaks to employees. If breaks are given, Federal requirements must be followed in that when breaks of 20 minutes or less are given, the employee must be paid. If the employee is relieved of all duties, meal breaks of 30 or more minutes can be unpaid.

Holidays / Vacation / Sick Leave

There is no state law in Texas that requires employees to be paid additionally for work done on weekends or holidays. Employers do not have to offer holidays, vacation time, or other pay for time not worked. These policies are at the discretion of the employer.

Statute of Limitations

Under Texas wage and labor law, employers are liable for unpaid overtime wages for a period of 180 days from the date the wages were earned.

The deadline for filing an overtime claim  under the federal FLSA is longer and requires those seeking to recover unpaid back overtime wages file a lawsuit within two years from the date of the employer’s wage violation. So, a lawsuit filed today would be able to seek recovery of back overtime for only the prior 2 (sometimes 3) years. 

As an example, suppose you believe that your employer has failed to pay you proper overtime wages since January 1, 2016. Waiting until June 1, 2019 to file your lawsuit means you are only allowed to seek unpaid wages from June 1, 2017, to June 1, 2019. 

The statute of limitations may be extended to three years if an employer’s violation of the FLSA was willful. An FLSA violation is deemed willful if the employer knew that its conduct was prohibited by the FLSA or showed reckless disregard.

Penalties for Violations

If an employer acts in bad faith by not paying wages, the Texas Workforce Commission can assess an administrative penalty equal to the wages claimed or $1,000, whichever is less.

Under federal law, employers who fail to pay proper overtime wages may be liable for up to double the amount of unpaid back wages plus costs and attorney’s fees incurred by employees. These cases can be brought by overtime pay lawyers on a class or collective basis on behalf of all workers who were subjected to the same illegal pay practices.

Layoffs, Plant Closings and WARN Notices

The Worker Adjustment and Retraining Notification Act (WARN) offers protection to Texas workers, their families and communities by requiring employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs. This notice must be provided to either affected workers or their representatives (e.g., a labor union).

An employer who violates the WARN Act  by failing to provide appropriate notice is liable to each employee for an amount up to 60 days back pay and benefits for the period of violation.

On your side  

At the Lore Law Firm, we represent salaried, hourly, and day-rate workers in an array of employment litigation matters, including unpaid overtime compensation claims in Texas. Our attorneys, and the Texas overtime law attorneys we associate with, are passionate about protecting the rights of workers and have helped recover millions of dollars in unpaid overtime wages for our clients.  

Contact us for a free and confidential review of your situation.  

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