Currently, the minimum wage in Texas is $7.25 an hour, which is the same as the current federal minimum wage.

Overtime pay is required when an employee works over 40 hours in a single work week. 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.

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 that certain types of employees are not required to be paid the minimum wage.

Tipped Employees

A common example of employees who are exempt from the minimum wage are tipped employees. If an employee earns regular tips, employers are permitted to pay those employees a minimum hourly rate of $2.13. So, what are regular tips?

An employee is considered to earn regular tips if they earn at least $30 in tips a month. This is a small amount, so there are other specific rules that employers must follow to 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
  • Farmworkers
  • Federal criminal investigators
  • Fishing
  • 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 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.

Who is eligible for overtime pay?

Texas follows the rules set forth by the federal government for overtime provisions, which means that all employees must receive overtime pay unless they are exempt. Employers will 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.

Salaried Employees

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.

1. Executive:
  • Salaried employee;
  • 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.
2. Administrative:
  • Salaried employee;
  • 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.
3. Professional:
  • Salaried employee;
  • 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.

Computer-Related Occupations

The criteria to qualify for a computer employee exemption include:

  1. You must be compensated on either a salary or fee basis, at a rate of not less than $455 per week, or if compensated on an hourly basis, the rate must not be less than $27.63 an hour;
  2. You must be employed by a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field; and
  3. Your primary duties must consist of:
  • 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 skills.

Note: The computer employee exemption does not include employees engaged in the manufacture or repair of computer hardware and related equipment. Employees whose work is highly dependent upon, or facilitated by, the use of computers and computer software programs (e.g., engineers, drafters and others skilled in computer-aided design software)—but who are not primarily engaged in computer systems analysis and programming, or other similarly skilled computer-related occupations identified in the primary duties list outlined above—are also not exempt under the computer employee exemption.

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
  • Airline employees
  • Amusement/recreational employees in national parks / forests / wildlife refuge systems
  • Babysitters on a casual basis
  • Boat salespeople
  • Buyers of agricultural products
  • Commissioned sales employees
  • Companions of the elderly
  • Computer professionals
  • 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)
  • Fishing
  • 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 delivery
  • Newspaper employees of limited circulation newspapers
  • Police officers working in small public police departments (fewer than five officers)
  • Radio station employees in small markets
  • Railroad employees
  • Seamen on American vessels
  • Seamen on vessels other than American vessels
  • Sugar processing employees
  • Switchboard operators
  • Taxicab drivers
  • 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.

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If you have questions about any of the above exemptions, or any other questions about your entitlement to overtime, give us a call.

If you believe that you may be owed unpaid minimum wage and/or overtime, please contact our office to talk to an attorney with experience in minimum wage and overtime violations.