Texas Overtime Laws & Wages Attorney

Table of contents:

1. Understanding Texas Wage and Overtime laws
2. Minimum Wage
3. Tip Credit
4. Overtime Pay
5. Am I Exempt from Overtime in Texas?
6. Misclassification of Independent Contractors
7. Statute of Limitations for Unpaid Wages
8. How Much Can You Recover?
9. Frequently Asked Questions

Texas Unpaid Overtime Attorney & Wage Lawyer

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 you’re legally entitled to, 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.

For more information, contact a Texas overtime laws & wages attorney or visit our comprehensive state labor laws guide.

Understanding Texas Wage and Overtime Laws

While Texas has state labor laws, any employee covered by the federal Fair Labor Standards Act (FLSA) is exempt from the Texas Minimum Wage Act. On April 23, 2024, the Department of Labor (DOL) released its final rule raising the minimum salary requirement for the “white-collar” exemption from overtime pay under the FLSA. This new rule increases the salary threshold from $35,568 annually ($684 a week) to $43,888 ($844 a week) as of July 1, 2024, and then further increases it to $58,656 ($1,128 a week) as of January 1, 2025. To qualify for exemption from overtime pay, employees would need to earn a salary of at least $58,656 and also fulfill specific job duties designated for executive, administrative, and professional roles.

Minimum Wage

In Texas, the minimum wage aligns with the federal standard of $7.25 per hour. This sets the baseline for full-time employees, who should expect to earn at least $290 over a 40-hour workweek before taxes. For those working beyond the standard 40 hours, overtime pay kicks in, amounting to $10.88 per hour—1.5 times the usual hourly rate of $7.25 per hour. Understanding these wage standards is essential for ensuring fair pay and recognizing the value of one’s work in Texas.

Tip Credit

Under the FLSA, employers in Texas are required to pay tipped employees a minimum cash wage of $2.13 per hour. Employers can apply a tip credit towards their wage obligations, which is the difference between this direct cash wage and the federal minimum wage of $7.25 per hour. This means the largest tip credit an employer can claim is $5.12 per hour, calculated by subtracting the direct wage of $2.13 from the federal minimum wage ($7.25 – $2.13 = $5.12).

For example, a part-time server who worked 40 hours over two weeks and made $250 in tips is subject to the tip credit. Her minimum wage earnings for these hours should be $290 (40 hours x $7.25). The allowable tip credit, the difference between her actual wages and the minimum wage, is calculated as $204.80 (40 hours x $5.12). Her cash wages amount to $85.20 (40 hours x $2.13). Adding her tips to her cash wages, she ends up with a total of $335.20, surpassing the minimum wage requirement, thus enabling the employer to claim the full tip credit of $204.80. Conversely, had she earned $200 in tips for the same period, her total would have been $285.20, slightly below the minimum wage, requiring the employer to compensate the $4.80 shortfall.

Overtime Pay

Because Texas follows the FLSA, employers must compensate their non-exempt workers at a rate of one and a half times their regular pay for any hours worked beyond 40 in a given workweek. To calculate overtime, start by identifying the regular hourly wage. Multiply any hours worked beyond 40 per week by 1.5 times this rate. For instance, if an employee’s hourly wage is $10 and they work 45 hours in a week, they earn $10 for the first 40 hours and $15 (1.5 x $10) for the 5 overtime hours.

An employer must generally apply the weekly calculation method for calculating overtime for a nonexempt monthly salaried employee receiving overtime. According to this method, an employer must first annualize the salary by multiplying the monthly wage by 12. Next, divide by 52 weeks and then divide by the standard weekly hours to find the hourly rate. For example, a monthly salary of $2,000, assuming a 40-hour workweek, translates to an hourly rate of $11.54 ($2,000 x 12 / 52 / 40). The employee who works overtime is then paid 1.5 times the hourly rate of $11.54 for any hours worked overtime.

If the employee consents, the employer may use the monthly calculation method instead. This divides the monthly salary by the total number of work hours in the month. For instance, with a $2,000 monthly salary over 160 work hours, the hourly rate comes to $12.50. Overtime is paid at one and one-half times this hourly rate for any hours worked beyond the standard.

Am I Exempt from Overtime in Texas?

Most workers in Texas are entitled to overtime pay when they work more than 40 hours per week. In Texas, the FLSA ensures that nonexempt employees are eligible for overtime compensation regardless of their pay scale. This includes a wide range of workers, particularly those engaged in manual labor or “blue-collar” jobs that demand repetitive operations, physical skill, and energy. Specific roles covered under the FLSA include but are not limited to:

• Non-management production-line employees
• Non-management maintenance staff
• Non-management office staff
• Inside Sales staff
• Construction workers
• Craftsmen
• Carpenters
• Electricians
• Mechanics
• Welders
• Oil Field Workers
• Operating engineers
• Equipment Operators
• Plumbers
• Paramedics
• Ambulance personnel
• Rescue workers

It’s important to note that the entitlement to overtime pay is not influenced by whether an employee is paid hourly or on a salary basis; both are eligible unless they fall under specific exemptions. Additionally, commissioned employees qualify for overtime pay unless they are required to travel away from their place of business regularly and considered “outside sales”. This underlines the FLSA’s commitment to protecting a broad spectrum of workers, ensuring they receive fair compensation for overtime hours worked.

There are certain exemptions to the entitlement to overtime pay. 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 minimum salary requirements for these overtime exemptions took effect in January 2020 and made the minimum salary threshold $684 per week (or $35,568 annually). This change in federal law also applies to most workers in Texas when determining whether they are classified as exempt or non-exempt from the overtime pay laws. In addition, a new rule by the Department of Labor is set to increase the minimum salary for executive, administrative, and professional employees to qualify as exempt to $844 per week (or $43,888 annually) as of July 1, 2024, and then further increase it to $1,128 per week ($58,656 annually) as of January 1, 2025.

To be considered as exempt from overtime in Texas, you must be working in a job with both duties and compensation that qualify the position as exempt. The most common overtime exemptions include:

• Legitimate independent contractors (beware of misclassification)
• Outside salespeople
• Live-in help (housekeepers, au pairs, etc.)
• Executive employees
• Transportation workers driving large trucks in interstate commerce
• Administrative workers
• Farmers/agriculture workers
• Professional workers
• Computer employees
• Volunteers
• Sailors/seamen (the FLSA does not use the same definition as Jones Act)

For most exemptions, you must currently be guaranteed at least $684 per week, paid on a salary basis.

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.

If you believe you are owed overtime pay, contact the unpaid overtime lawyers at Lore Law Firm today.

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 businesses 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 insufficient to avoid the labor laws regarding overtime pay.

Several factors must be considered in determining whether a worker in Texas is an employee or independent contractor (a/k/a 1099 employee). This page gives further information about the factors to be considered when making the distinction between an employee and an 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. If you believe you have been misclassified at your job, contact the employment lawyers at the Lore Law Firm today.

Reclassifying Employees

If you find yourself suddenly eligible for overtime pay due to a job reclassification, yet your role and duties remain unchanged, you might be entangled in the “Reclassification Myth.” This scenario suggests that your employer may have violated your overtime rights initially, only recognizing and rectifying the issue through reclassification after becoming aware of the oversight. Such a situation, where your job title changes without any alteration in your job responsibilities, could be seen as an inadvertent admission of past violations of overtime law by your employer. The act of reclassifying your position without addressing owed back overtime wages might also be considered a willful violation, highlighting a deliberate disregard for legal employment standards. If your job has been reclassified as non-exempt and your employer is not also offering to pay the back overtime wages owed (up to double), you should consult with a wage and hour lawyer.

Salaried Employees

In Texas, the misconception that salaried employees are automatically exempt from receiving overtime pay is widespread. However, being paid a salary alone does not disqualify one from overtime compensation. According to Texas overtime law, employees are eligible for overtime unless they earn a minimum of $684 per week (scheduled to increase to $844 per week) and their job duties align with specific overtime exemptions. If an employer cannot conclusively demonstrate that an employee’s role meets one of these exemptions, the employee may indeed be entitled to overtime pay. This clarification is crucial for salaried employees who believe they might have been unjustly denied overtime wages.

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 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 an employee’s earned wages 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 non-working day, such as a weekend or holiday, wages can be 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 quits, resigns, or retires, final pay is due on the next regularly scheduled payday.

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 so 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

No state law in Texas 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 for Unpaid Wages

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 to 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.

For example, suppose you believe your employer has failed to pay you proper overtime wages since January 1, 2020. Waiting until June 1, 2024 to file your lawsuit means you can only seek unpaid wages from June 1, 2021 to June 1, 2024.

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.

How Much Can You Recover?

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. Overtime pay lawyers can bring these cases 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 of up to 60 days back pay and benefits for the period of violation.

An employer who files for bankruptcy is still required to comply with the WARN Act notice requirements.

Frequently Asked Questions About Texas Labor & Overtime Laws

What should I do if I believe I am a victim of wage theft in Texas?

If your issue involves an employer’s failure to timely issue paychecks, making improper or unauthorized deductions or final pay, you may want to start by filing a claim with the Texas Workforce Commission up to 180 days after the date that the wages would have been due.

If your issue involves an employer’s failure to pay overtime wages or failure to provide WARN Act notice, you should start by contacting a Texas wage theft lawyer to help you determine if you have a valid claim and, if warranted, file a claim to recover up to double the amount of back overtime you (and other similar workers) are owed. Note that such claims must usually be filed within two years of when the wages were due to be paid to you.

Can my employer discharge me if I sue them for unpaid overtime wages in Texas?

Federal and state overtime laws make it illegal for an employee to be discharged or retaliated against as a result of them filing an unpaid overtime wages lawsuit.

Am I entitled to receive unpaid wages or back pay in Texas?

Yes, if you have not been paid for hours you have worked, you are entitled to file an unpaid wage or back pay claim in Texas to pursue the financial compensation you are owed.

Am I entitled to receive unpaid wages or back pay in Texas?

Yes, if you have not been paid for hours you have worked, you are entitled to file an unpaid wage or back pay claim in Texas to pursue the financial compensation you are owed.

How many hours a day can I work in Texas?

Texas has no legal limit on the number of hours an adult employee can work in a day as long as employers comply with overtime pay requirements for any hours worked over 40 in a workweek. However, for minors, Texas law places restrictions on the number of hours they can work and when they can work them.

Is it legal to work 8 hours without a break in Texas?

Yes, in Texas, it is legal for an adult to work 8 hours without a break. State law does not require employers to provide breaks or lunch periods for employees 18 and older. However, employers may choose to offer breaks at their discretion.

The Texas Overtime Lawyers at the Lore Law Firm Are on Your Side!

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

Chat with us for a free and confidential review of your situation with an experienced Texas overtime lawyer.