This post was last updated on August 17, 2021

What Every Texas Worker Needs to Know About Overtime Pay Laws

Texas employees have the right to overtime compensation when it is warranted. While the laws and rules governing overtime in Texas are complex, it is important to understand the protections available to employees.

In this guide, the Texas overtime lawyers at Wood Edwards will explore federal and Texas overtime laws, exempt and non-exempt employees, tactics employers use to avoid paying overtime, penalties for failure to pay, how to file an unpaid overtime claim, and overtime calculations.

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What Laws Apply to Overtime Pay?

Texas labor laws do not cover overtime pay, so federal law governs. The Fair Labor Standards Act (FLSA) is a federal law that establishes the rules for overtime pay, minimum wage, child labor, and recordkeeping.

What Is Overtime Pay?

Overtime pay is the amount of money certain employees are entitled to when they work more than 40 hours in a single week. Some refer to this as “time-and-a-half pay.” In Texas, both hourly and salaried employees can receive overtime pay. 

Overtime Pay Requirement

Employers must pay all qualifying employees at least time-and-a-half for any hours worked over 40 in a single workweek. FLSA defines a workweek as seven consecutive days. 

By way of example, let’s look at the overtime payments for minimum wage employees. Texas follows the federal minimum wage amount, which is currently $7.25. Therefore, overtime pay in Texas for minimum wage employees is $10.88 per hour (1.5 x $7.25).

Employers are not required to compensate employees for work done over the weekend or on a holiday unless made mandatory by the employer.

Who Is Eligible for Overtime Pay in Texas (Exempt vs. Nonexempt Employees)?

The FLSA does not cover all employees, meaning not everyone can receive overtime pay.

While the FLSA specifically covers employees in certain industries, it also exempts others based on compensation and job duties. For example, a chef who attains a four-year degree in a culinary arts program is exempt, while the line cooks are not, entitling them to overtime pay.

If you have questions about whether you are entitled to overtime pay, contact our law firm anytime for a free consultation.

Exempt employees

When we talk about exempt employees in the context of Texas overtime laws we are talking about employees who are not entitled to overtime pay.

Employees engaged in executive, administrative, professional, computer, and outside sales employment capacities and paid at least $684/week or $35,568/year are exempt from the overtime payment requirement under FLSA.

A person’s job title is not enough to determine whether they are a nonexempt or exempt employee in Texas. Rather, their employment status is based on salary and job duties.

Executive employees

To qualify as an executive employee under FLSA, the employee must:

  • Receive a salary or fee of no less than $684/week or $35,568/year;
  • Primarily manage the business in which he or she is employed;
  • Customarily and regularly direct at least two or more other employees; and
  • Have the authorization to hire or fire other employees or have influence over the employment status of others. 

Examples of executive employees are chief executive officers, managers, and directors.

Administrative employees

A person qualifies as an administrative employee under FLSA if he or she:

  • Receives compensation on a salary or fee basis of no less than $684/week or $35,568/year;
  • Performs office or non-manual work related directly to the management or general business operations of the employer or employer’s customers; and
  • Exercises discretion and independent judgment over matters of significance to the business.

Keep in mind that just because an employee handles important business matters does not mean he or she is an administrative employee. One of the key requirements is that the employee has discretion over business decisions, not just involvement. For example, those in human resources or marketing are administrative employees. 

Professional employees

There are two types of exempt professional employees: learned professionals and creative professionals. To qualify under either professional type, the employee must earn on a salary or fee-base of no less than $684/week or $35,568/year.

Learned professional

To qualify as a learned professional, the employee must meet the following requirements:

  • The employee’s primary duties must require advanced knowledge;
  • The advanced knowledge must be in a field of science or learning; and
  • The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

While licensed practical nurses and paralegals would seem to fall under the learned professional category, FLSA does specifically protect these types of employees, allowing them to claim overtime pay.

Creative professional 

A creative professional is an employee whose primary duty is the performance of work that requires invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor. Recognized fields include music, writing, acting, and the graphic arts.

Employees are not exempt if they can accomplish their job through routine mental, manual, mechanical, or physical work.

Computer employees

Most computer employees are exempt as long as they earn no less than $684 per week or an hourly rate of no less than $27.63. Their primary duties must include the following:

  • The application of systems analysis techniques and procedures, including consulting with users to determine hardware, software, or system functional specifications;
  • The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
  • The design, documentation, testing, creation, or modification of computer programs related to machine operating systems; or
  • A combination of the aforementioned duties, the performance of which requires the same level of skill.

Since job titles in the computer industry vary and change quickly. So it is critical to look at the computer employee’s specific job duties to know if they are exempt. 

Outside sales employees 

Outside sales employees are exempt under FLSA and are those who:

  • Primarily make sales; and
  • Customarily and regularly conduct business away from the employer’s place or places of business.

There are no salary requirements for outside sales employees like the other exempt employees in Texas.

Nonexempt employees

When we talk about nonexempt employees we are talking about employees who are entitled to overtime pay.

Regardless of how much they are paid, FLSA generally protects manual laborers and “blue-collar” employees “who perform work involving repetitive operations with their hands, physical skill, and energy.” The following types of nonexempt employees in Texas are specifically covered under FLSA:

  • Non-management production-line employees,
  • Non-management employees in maintenance,
  • Construction workers,
  • Carpenters,
  • Electricians,
  • Mechanics,
  • Plumbers,
  • Ironworkers,
  • Craftsmen,
  • Operating engineers,
  • Longshoremen,
  • Police officers,
  • Detectives,
  • Deputy sheriffs,
  • State troopers,
  • Highway patrol officers,
  • Investigators,
  • Inspectors,
  • Correctional officers,
  • Parole or probation officers,
  • Park rangers,
  • Firefighters,
  • Paramedics,
  • Emergency medical technicians,
  • Ambulance personnel,
  • Rescue workers, and
  • Hazardous materials workers. 

This list does not include all nonexempt employee types, but it provides a general idea of who has the right to overtime pay in Texas.

Salaried Employees

The way employees are paid does not determine whether they can receive overtime compensation or not. Both hourly and salaried employees are entitled to overtime pay unless they meet one of the exemptions discussed above.

Independent Contractors

The FLSA only applies to employees. Thus, to avoid paying overtime, an employer may classify a worker as an independent contractor, temporary worker, contract-based worker, or something other than an employee.

Generally, an individual is an employee if the employer has the right to control when, where, and how they work. An independent contractor, on the other hand, retains control over how and what work will be done, even though the person paying the independent contractor can decide and direct the result of the work.

Commissioned Employees

Employers may claim they do not owe overtime pay to commissioned employees, but that is not the case. Unless the job requires regular travel away from the place of business, the employer most likely will owe overtime to the employee. 

Can I Refuse to Work Overtime, or is it Mandatory?

Employers can require employees to work overtime (also known as mandatory overtime), as long as they are compensated accordingly. Some states have a daily overtime limit, but Texas does not.

Texas does prohibit mandatory overtime for registered nurses (RNs) and licensed vocational nurses (LVNs). Section 258.002 of the Texas Health and Safety Code defines mandatory overtime as work hours or days in addition to pre-scheduled shifts. Under Section 258.003, a hospital cannot require an RN and LVN to work overtime, although the nurse can volunteer.

This prohibition does not apply if one of the following situations are occurring:

  • A health care disaster;
  • A federal, state, or national declaration of emergency in the location where the nurse is employed;
  • An unforeseen emergency; or
  • An ongoing medical or surgical procedure in which the nurse is actively engaged and must remain present for the health and safety of the patient.

Under any of these scenarios, the hospital may require overtime but will owe the nurse time-and-a-half pay. 

What Are the Common Ways that Employers Avoid Paying Overtime?

Employers may find ways to avoid paying their employees overtime. Here are some common misconceptions that an employer may try to use to deny overtime compensation.

Refusing to Recognize the Hours Worked as Compensable Time

There are certain times throughout the workday or workweek where an employer may claim they do not need to compensate the employee. But they must follow rules relating to compensable time.

Waiting time

An employee’s duties may involve waiting time. There is a difference between waiting to be engaged in work activity and being engaged to wait. For example, firefighters who play cards while waiting for an emergency call are engaged to wait. That is time spent for which they must receive compensation.

On-call time

An employee who must be reachable while on the employer’s premises is “on-call.” This is compensable time. However, an employer who can leave the premises but must still be reachable is typically not considered working while on-call. These situations are very fact-specific.

Travel time

To determine if time spent traveling is compensable time depends on the type of travel and how it relates to the employee’s duties. Traveling from home to work is not compensable time. Travel that is part of the employee’s primary duties, such as traveling between job sites, is compensable time. Travel for a one-day assignment to a location different from the employee’s primary job location is compensable time, but only the amount of time in excess of the employee’s usual commute. 

Classifying Employment Status as Something Other Than an Employee 

Since overtime laws only apply to employees, an employer may classify a worker as something other than an employee to avoid overtime payments. As discussed above, regardless of what the employer calls the worker, it is the relationship and amount of control that determines the worker’s status.

Reclassifying Employee’s Position

Employers who realize they were not paying an employee overtime may suddenly reclassify the employee’s position while keeping the job duties the same. This scenario may be evidence of a willful violation of Texas overtime law and FLSA.  

Claiming Employer Does Not Need to Pay Salaried Employees 

Regardless of how an employee is paid, all employees are entitled to overtime pay unless they meet one of the exemptions under the FLSA.

Arguing Overtime Was Unauthorized

If an employer knew or reasonably should have known the employee was working overtime, then the employee must be compensated accordingly. Even if the employer prohibits overtime work without prior approval, if the employee works more than 40 hours, he or she must receive overtime pay.

What are the Penalties for Not Paying Overtime in Texas?

For employers acting in bad faith by not paying overtime wages, theTexas Workforce Commission (TWC) can assess an administrative penalty equal to the wages claimed or $1,000, whichever is less. Under federal law, an employer who fails to compensate an employee for overtime may be liable for up to double the amount of unpaid overtime in addition to costs and attorney’s fees the employee incurs.  

What to Know About Filing an Unpaid Overtime Claim 

An employee covered by the FLSA who wants to initiate a federal complaint can do so by filing a claim with the Wage and Hour Division of the U.S. Department of Labor.

For state complaints, the Texas Workforce Commission (TWC) handles all Texas overtime claims. Lastly, employees can sue their employer for unpaid overtime. 

Deadline to File

Missing the deadline to file a claim bars the employee from receiving compensation for overtime. 

Federal claims

For federal unpaid overtime claims, the employee has two years from the date of the employer’s violation to file a claim. If the employee can show that the employer’s violation was willful, then the employee has three years to file. Employers willfully violate FLSA if they know their conduct is prohibited or show a reckless disregard for the violation. Under FLSA, the employee can seek recovery of unpaid overtime for the two years prior.

State claims

For state claims, the employee must submit a wage claim with the TWC within 180 days of the due date for overtime payment. Texas overtime laws limit the employee’s recovery to a period of 180 days from the day the payment was due.

Lawsuits

There is a two-year statute of limitations for filing a lawsuit against an employer for unpaid overtime. If the nonpayment was willful, the deadline for filing is three years. 

How to Calculate Texas Overtime Pay

In Texas, overtime payment calculations can get a bit complex, depending on if the employee receives a salary or hourly pay. The simple version of the overtime calculation is time-and-a-half for each hour worked over 40 hours in a workweek. However, to apply this calculation to salaried employees requires more number crunching. 

To better understand the calculations below, “straight time” is the number of hours, up to 40, that the employee works at their regular rate. 

Hourly Employee

The overtime calculation for hourly employees is as follows:

  • (Regular Rate x Straight Time) + ((Regular Rate x 1.5) x Overtime Hours)

For example, if an hourly employee makes $12 per hour and works 60 hours in one week, he or she will take home $840 that week. Let’s plug these numbers into our example:

  • ($12/hour x 40 hours) + (($12/hour x 1.5) x 20 hours)
  • $480 + ($18/hour x 20 hours)
  • $480 + $360
  • $840

Calculating overtime payments for hourly employees is more straightforward than for salaried employees.

Salaried Employee

For employees that receive a salary, the calculations are different, depending on if the employee’s workweek is 40 hours, more than 40 hours, or less than 40 hours. 

To complete the calculations, determine the regular rate for the employee by dividing their weekly salary by the number of hours the salary amount is intended to compensate. For example, a salaried employee who makes $400 per week over a 40-hour workweek has a regular rate of $10 per hour.

For an employee with a 40-hour workweek, the calculation is as follows:

  • (Weekly Salary) + ((Regular Rate x 1.5) x Overtime Hours)

For employees whose workweek exceeds 40 hours, the calculation is as follows:

  • (Weekly Salary) + ((Regular Rate x .5) x Overtime Hours Between 40 and Set Workweek Hours)

Employees with a workweek of fewer than 40 hours calculate overtime as follows:

  • (Weekly Salary) + (Regular Rate x Unpaid Straight Time) + ((Regular Rate x 1.5) x Overtime Hours)

Although employers are responsible for calculating overtime payments and compensating their employees accordingly, with the correct information, employees can do their own calculations. 

What Should I Do if My Employer Is Denying Me Overtime Pay in Texas?

A nonexempt employee in Texas who does not receive overtime pay for working more than 40 hours in a workweek may file either a federal or state claim, or file a lawsuit against the employer seeking compensation. When it comes to FLSA and overtime laws in Texas, the nuances and exceptions to the exceptions can be incredibly confusing and overwhelming. 

At Wood Edwards LLP, we can help. We pride ourselves on offering our clients big-firm talent with small-firm personalization and efficiency. Our attorneys handle all kinds of complex employment matters, including overtime payment claims.  

Book a consultation with us today to learn more about what overtime payments you may be able to receive.