Overtime Laws & Common Violations in Texas

The vast majority of employers in Texas and nationwide abide by overtime laws. When their employees work more hours than they were scheduled, they should be paid a higher, agreed-upon amount.

But there are some companies that fail to follow Texas labor laws regarding overtime. It could be caused by the employer simply not knowing the law, or it could be an effort to save money. In either case, employees who have been wronged may have an unpaid overtime wage case against their employer.

Here are a few common ways in which companies in Texas, and throughout the nation, can violate overtime wage laws.

Misclassifying an Employee As Exempt

Businesses can directly hire employees classified as either exempt or nonexempt. Exempt employees are classified as such because they are, to an extent, exempt from labor laws regarding meal breaks, rests, and overtime. Rather than receiving an hourly wage, these employees are paid a weekly salary.

Nonexempt employees, on the other hand, can work up to 40 hours a week at a regular wage. If they work any additional hours, their employer must pay them time-and-a-half wages. Failure to do so constitutes a violation of overtime laws in Texas and in other states across the country.

Some employers attempt to avoid paying their nonexempt employees time-and-a-half for overtime by classifying these employees as exempt. There are, however, only a limited number of roles that can be classified as exempt in Texas. These include:

• Business Executives
• Administrative Professionals
• Professional services, such as attorneys
• Computer Professional
• Outside Sales Representatives

Employers who fail to pay overtime wages to employees whose roles do not fall under these categories may be in violation of Texas labor laws regarding overtime.

Misclassifying an Employee as an Independent Contractor

Similar to exempt employees, employers are not required to pay independent contractors overtime wages. Some companies in Texas use this caveat as a way to get around overtime laws by misclassifying employees whom they employ directly as independent contractors.

To provide employers and employees alike with a better understanding of the differences between employees and independent contractors, the IRS outlined three general rules that measure the amount of control vs. independence the employer offers over those who work for them. These are:

1. Behavioral: Does the business have control over the tasks for which the employee is responsible as well as how they perform the task?
2. Financial: Does the employer have complete control over how those who work under them are paid? For example, does the employer reimburse expenses and pay for tools such as laptops?
3. Type of Relationship: Is there a written contract between the employer and employee, and does the employer offer them benefits?

Although there is no set system of “scoring” these three rules, they can be used as a guide in the event a company is unsure of how someone should be classified, or for an employee if they believe their employer has violated Texas overtime laws by misclassifying them as an independent contractor.

Reclassifying an Employee but Not Providing Back Pay

There are instances in which companies realize they made a mistake by classifying an employee as exempt. Many employers will choose to correct this error by reclassifying the employee as nonexempt.

Whenever this occurs, however, the company is acknowledging they failed to pay their employees overtime wages owed to them. They cannot simply begin paying the employee overtime wages and ignore what they failed to pay them in the past. To avoid violating Texas overtime laws, companies are required to pay the newly-reclassified employee time-and-a-half for overtime hours they worked under their previous classification.

Not Recognizing Services Rendered by an Employee

Any task an employee performs on behalf of their employer should be counted toward their payable hours.

In some cases, companies will, either by mistake or purposefully, not recognize certain services. Some examples of these include:

• Work performed before an employee clocks-in
• Work performed after an employee clocks-out
• An employee driving from one location to another while on the clock
• Training

A company failing to count the hours an employee spends performing any of the tasks above may violate Texas labor laws around overtime if the employee works more than 40 hours in a workweek and they aren’t paid appropriate wages.

Trust Hodges & Foty for Overtime Wage Cases

At Hodges & Foty, we have taken on companies that have violated Texas overtime laws to secure tens of millions of dollars in settlements for their employees. If you believe your employer committed overtime wage violations, contact us today for a free evaluation of your case.