Texas Labor Laws: Minimum Wage & Overtime Pay
Unpaid Overtime and Minimum Wage claims are the subject of many, many lawsuits across Texas and across the Country.
As a general rule, employees who work over forty (40) hours in a week are entitled to overtime pay. A single work week is defined as “seven consecutive work days. Overtime pay must be paid at one and a half times an employee’s regular hourly wage. Being paid a salary is not the same thing as being exempt. No matter how your employer chooses to compensate you (i.e. salary, flat-rate, day-rate, etc.) you may still be legally entitled to a premium pay for overtime hours.
Note: $10.88 per hour is the minimum overtime wage for employees who have a regular hourly wage of $7.25. If your regular wage is more than $7.25 per hour, you must calculate your overtime pay at one and a half times your hourly rate.
Minimum Wage Exemptions
The Department of Labor has listed very specific exemptions in relation to the federal minimum wage law, which means some employees do not have legally be paid the minimum wage.
A common example of an employee who is exempt from the minimum wage are tipped employees – most commonly restaurant servers. If an employee earns regular tips, employers are permitted to pay those employees a minimum hourly rate of $2.13 per hour. Employers must ensure that tipped employees are ultimately earning at least the minimum wage.
For example, if a tipped employee is paid $2.13 an hour and receives tips, the total amount earned during that hour must add up to at least the minimum wage. If a tipped employee does not make at least the minimum wage with their hourly rate of pay, plus tips, the employer must make up the difference. Ultimately, the rule guarantees that tipped employees are to earn at least the minimum wage, but they can also earn over the minimum wage in tips.
The requirements for an employer to pay tipped employees are fairly complicated; therefore, if you believe that you’re not receiving your correct pay as a tipped employee, please contact our office immediately to speak to an attorney.
Other employees/occupations that are exempt from the minimum wage include:
- Babysitters on a casual basis
- Companions for the elderly
- Executive, administrative, professional and outside sales employees
- Federal criminal investigators
- Homeworkers making wreaths
- Newspaper delivery
- Newspaper employees of limited circulation newspapers
- Seamen on a vessel other than an American vessel
- Seasonal and recreational establishments
- Switchboard operators
- Workers with disabilities
These minimum wage exemptions involve more than a job title or work in a certain industry. Ultimately, the burden is on the employer to prove that an employee falls within a specified exemption. Do not assume you are exempt because you work in a certain industry or were given a job title.
Who is eligible for overtime pay?
As a general rule, all employees are entitled to be paid overtime pay for work over 40 hours unless they are exempt. Employers frequently misclassify an employee as exempt from overtime pay, when in fact they are not exempt—meaning that the employee is entitled to overtime. It is therefore important to understand who is eligible for overtime pay.
One of the most common misclassifications is for salaried employees. Being paid on a salary basis does not mean that you are exempt from overtime pay. The burden is on the employer to prove that your position qualifies as one of the exemptions from overtime pay.
To be considered a “salaried employee,” an employee must earn no less than $455 per week, exclusive of any deductions (“board, lodging, or other facilities”); and the employee’s salary cannot be reduced because of variances in the number of hours worked per week (unless the employee takes unpaid leave).
Common Overtime Pay Exemptions
Executive, Administrative and Professional Exemptions
In order for an employee to fall within the “Executive, Administrative and Professional Exemption,” the employee must be a salaried employee and satisfy the specific job duties for each respective exemption.
Primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of an enterprise;
Direct the work of at least two or more other full-time employees; and
Authority to hire or fire other employees, or their suggestions and recommendations regarding the hiring, firing, advancement, promotion and any other change of other employees’ employment status is given actual weight.
Primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or employer’s customers; and
Primary duties include the exercise of discretion and independent judgment with respect to matters of significance.
Primary duty must be the performance of work requiring advanced knowledge, defined as work that is predominately intellectual in character and includes work requiring the consistent exercise of discretion and judgement;
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.
Highly Compensated Employee
Highly compensated employees are those who perform office or non-manual labor work, who are compensated annually with $100,000 or more, and who perform at least one of the duties of the exempt executive, administrative or professional employees (as discussed above). In addition, they must meet the requirements for the salaried employee, meaning that they must be paid at least $455 a week on a salary basis.
Additional Overtime Pay Exemptions
The list for additional overtime-exempt employees/occupations is long and very specific. The exemptions are highly technical and require more than a job title or work in a specific industry:
- Aircraft salespeople
Amusement/recreational employees in national parks / forests / wildlife refuge systems
Babysitters on a casual basis
Buyers of agricultural products
Commissioned sales employees
Companions of the elderly
Domestic live-in employees
Drivers, driver’s helpers, loaders and mechanics
Executive, administrative, professional and outside sales employees
Farm implement salespeople
Firefighters working in small public fire departments (fewer than five firefighters)
Forestry employees of a small firm (fewer than nine employees)
Fruit and vegetable transportation employees
Homemakers making wreaths
Houseparents in non-profit educational institutions
Livestock auction workers
Local delivery drivers and driver’s helpers
Lumber operations employees of a small firm (fewer than nine employees)
Motion picture theater employees
Newspaper employees of limited circulation newspapers
Police officers working in small public police departments (fewer than five officers)
Radio station employees in small markets
Seamen on American vessels
Seamen on vessels other than American vessels
Sugar processing employees
Television station employees in small markets
Truck and trailer salespeople
It cannot be overemphasized that the above exemptions are highly technical and require more than a job title or work in a specific industry.
If you have questions about any of the above overtime exemptions, wage issues, or any other questions about your wages or entitlement to overtime, give the employment lawyers at Herrmann Law a call: 817-479-9229 or submit your case to us online and someone from our office will contact you within 48 hours.
If you believe that you may be owed unpaid minimum wage and/or overtime, please contact our office: 817-479-9229 to talk to one of our experienced attorneys with experience in minimum wage and overtime violations.
**This article was originally posted by Drew N. Herrmann on Justipedia.com