What Employees and Employers Ought to Know About Texas Overtime Laws

Texas Overtime Laws Most workers in Texas understand that if they work more than 40 hours a week, they are entitled to overtime pay.

However, there are many specifics about overtime laws in Texas–including precisely who is entitled to overtime, how much overtime pay must be paid, and exceptions to the rules–that employees do not always understand.

As a result of this, some employers will intentionally, or unintentionally, take advantages of an employee’s ignorance, and fail to pay the overtime that is deserved. When this happens, it is essential to consult with an experienced Texas overtime and employment attorney.

What Is Overtime Pay?

Federal law limits the amount of hours that an employee covered by the Fair Labor Standards Act (FLSA) can work in a week to 40. In the event that an employee works more than this, they must be paid for these additional hours at a wage that is greater than their standard wage. Overtime hours do not apply for holidays and weekends so long as the employee is not working in excess of 40 hours.

Who Is Entitled to Overtime Pay in Texas?

There are both state and federal laws in place that protect the rights of workers to receive overtime pay. Under the FLSA, all workers receive overtime pay unless there is a statutory exemption to the right to receive overtime pay. As explained by the United States Department of Labor, those who are exempt from overtime requirements include:

  • Professionals, executives, and administrative employees when these employees receive a salary that is at least $455 per week (the DOL increased the minimum salary for exempt employees to $47,476, a change that was intended to go into effect December 1, 2016. However, the change was blocked from taking effect by a federal court in Texas).
  • Employees who work on a commission basis when the employee makes at least 1.5 times the minimum wage ($7.25 per hour federally and in Texas) and makes more than 50 percent of their earnings on a commission basis.
  • Computer and IT professionals when they are paid at least $27.63 per hour.
  • Employees of motor carriers, such as drivers and mechanics, when the duties of the employee affect the safe operation of the motor carrier.
  • Agricultural workers on farms that use fewer than 500 man days of labor.
  • Employees of auto dealers, including salesmen and mechanics.
  • Seasonal workers who are employed by a seasonal or recreation establishment that does not operate for more than seven months of the year.

How Is Overtime Calculated?

The Texas Workforce Commission lists the types of overtime pay calculation methods. It is important to remember that how overtime pay is calculated is dependent upon the employee’s regular rate of pay.

Typically, however, overtime pay is issued at a rate that is 1.5 times the regular rate of compensation. For example, if an employee receives an hourly wage of $10 per hour, and works 10 hours over 40 hours per week for a total of 50 hours, then the employee is entitled to a wage of 1.5 multiplied by $10, or $15, for the additional 10 hours.

As such, the employee would collect $400 ($10 x 40 hours) plus $150 ($15 x 10 hours) for a total of $550 for the week. There are four common overtime calculation methods:

  • Hourly: Hourly rate calculated at 1.5 times the normal rate (time and a half) for any hours over 40 (described above).
  • Hourly: Total rate (the amount of money that an employee earns in a week based on hourly rate) plus any bonuses and commissions divided by the number of hours worked – then, pay half of the regular rate for overtime hours.
  • Salary: First, the regular rate, which is the salary divided by number of hours worked (hourly rate) must be determined. Then, time and a half should be paid for hours over 40.
  • Other: The last pay calculation method it to divide salary or weekly pay by the total number of hours, and to then pay hours over 40 hours worked at half of the regular rate. This may be used for employees who are hired at a salaried rate with hours more than 40 hours.For example, if a worker is hired at a salary of $500 per week for an agreed 50 hours of work, then the employee is entitled to $50 in overtime pay, or ($500/50 hrs. = $10/hr. Then $10 x .5 = $5. Then $5 x 10 hours=$50). In this case, the employee has already been paid the “one” in the “one and a half times” requirement, and therefore is only entitled to the additional “half.”

Overtime pay is normally paid on the same day that an employee receives their paycheck for hours worked.

How Is the Work Week Calculated?

One way that employers may escape the duty of paying overtime pay is to calculate the work week in a way that is different from what state and federal laws permit. The work week does not necessarily refer to a strict Monday-Sunday schedule; instead, the Department of Labor explains that the work week is any recurring period of 168 hours, or seven consecutive 24-hour days.

An employer may not average the number of weeks over a two-week (or greater) period in order to avoid overtime pay. For example, if an employee works 30 hours week one, and 50 hours week two for an average of 40 hours per week during the two-week period, the employee is still entitled to overtime for the 50-hour week.

Exemption Tests for Overtime Pay

As mentioned above, only exempt employees are not entitled to overtime pay. Knowing this, many employers misclassify employees in order to avoid paying overtime benefits. For example, an employee may be classified as an independent contractor, when they actually are truly an employee. Or, an employer may classify an employee as a salaried employee–and pay them a salary as such–under the mistaken conception that they do not have to pay salaried employees overtime.

However, this is not true; salaried employees are not entitled to overtime pay only when they satisfy the exemption test. There are many different exemption tests for different employee types. Consider the following example regarding the criteria for an administrative exemption:

  • The employee makes a salary of at least $445 per week;
  • The employee’s primary duties are not manual in nature;
  • The employee’s primary duties must be related to general business operations; and
  • The employee has the ability to make decisions and exercise discretion and their own judgement regarding important matters.

If the employee fulfills the criteria of this test, then the employer does not have to pay them overtime for hours worked over 40. Consider the criteria of a separate test for professional exemptions:

  • The employee makes a salary of at least $445 per week;
  • The primary duties in the workplace required specific or expert knowledge;
  • The type of knowledge necessary is related to science or learning; and
  • The employee has obtained their expert/specific knowledge through a “prolonged course of specialized intellectual instruction.”

In addition to misclassifying employees, another way that employers avoid paying overtime is by offering employees paid time off in the future in exchange for overtime hours, offering to pay employees “under the table” (which is illegal for more than one reason), or asking employees to work off of the clock, such as answering emails during their lunch break or putting in a few hours when they are at home.

How Our Experienced Texas Overtime Attorneys at the Offices of Linquist Wood Edwards LLP Can Help

As is evident by all of the information provided above, overtime laws can be very difficult to understand, and whether or not you are entitled to overtime pay, and if so, by which method your overtime pay should be calculated, can be very confusing. In general, most employees are entitled to time and a half when they work more than 40 hours a week.

While there are multiple exceptions to this rule, if you are an hourly employee, an employee who makes a salary that is less than $445 per week, an employee who is not entitled to overtime pay due to a statutory exemption, or an employee who does not meet all of the criteria listed on an overtime exemption test, you are entitled to overtime pay.

If you believe that overtime pay that you are rightfully owed has been withheld, it is important that you work with an experienced overtime and employment law attorney. Our law firm can guide you through approaching your employer about overtime pay, and what to do if overtime pay is denied, including how to submit a wage claim in Texas. We can also assist you in filing your own lawsuit in court.

For a consultation with our experienced Texas employment attorneys, contact our law firm today. We are passionate about protecting the rights of workers in our state.