Texas Minimum Wage and Overtime

From: Staffing

Minimum Wage

Texas’s minimum wage law is located at Tex. Lab. Code §§ 62.001 – 62.205. Covered employers must pay employees the federal minimum wage, which is $7.25 per hour.

Texas has not enacted a general overtime pay law; however, employers are still bound to the requirements set forth by the federal Fair Labor Standards Act (FLSA) when applicable.

Coverage

Texas’s minimum wage laws are generally applicable to all employers and employees, but provide certain specific exemptions.

Franchises

A franchisor is not considered to be an employer of either a franchisee or a franchisee’s employees.

Franchisee and franchisor have the meanings assigned by 16 C.F.R. § 436.1.

Note: Effective September 1, 2015, a franchisor will not be considered an employer for claims related to employment discrimination unless the franchisor has been found by a state court to have exercised a type or degree of control over its franchisee or its franchisee’s employees not customarily exercised by a franchisor for the purpose of protecting the franchisor’s trademarks and brand.

Exemptions

Employees Covered by the FLSA

Texas’s minimum wage law (in addition to any municipal ordinance or charter provision governing wages in private employment, other than wages under a public contract) does not apply to persons covered by the FLSA.

Religious, Charitable, or Nonprofit Organizations

Employers are exempt from the minimum wage law with respect to the employment of the following persons:

A member of a religious order, while the person is performing a service at the direction of the order.
A duly ordained, commissioned, or licensed minister, priest, rabbi, sexton, or Christian Science leader, while the person is performing services in that capacity for a church, synagogue, or religious organization.
Persons engaged in the activities of a religious, educational, charitable, or nonprofit organization in which the employer-employee relationship does not in fact exist; or the services are rendered to the organization gratuitously.
Individuals employed by the Boy Scouts of America or a local organization affiliated with the organization.
Persons employed by a camp of a religious, educational, charitable, or nonprofit organization.
A person employed with the person’s spouse by a nonprofit educational institution to serve as house parents of a child or children who is enrolled in and resides in the institution’s residential facilities, if the employee and the employee’s spouse also reside in the residential facilities and receive, without cost, board, and lodging.

Professionals, Salespersons, and Public Officials

Employers are exempt from the minimum wage law with respect to the employment of the following persons:

Persons employed in a bona fide executive, administrative, or professional capacity.
An individual employed as an outside salesperson or collector and paid a commission.
A person who performs services for a political subdivision as an elected official or as a member of a legislative body.

Domestics

Employers that employ domestics, babysitters, or personal caregivers in their private homes are exempt from Texas’s minimum wage law.

Youths and Students

Employers that employ the following youths and students are exempt from Texas’s minimum wage law:

Persons under 18 years of age who are not high school graduates or graduates of a vocational training program, other than persons who are employed in agriculture and whose pay is computed on a piece rate.
Persons less than 20 years of age who are students regularly enrolled in high schools, colleges, universities, or vocational training programs, other than persons who are employed in agriculture and whose pay is computed on a piece rate.
Persons with disabilities who are not more than 21 years of age, who are vocational rehabilitation clients, and who participate in a cooperative school work-program.

Inmates

Employers that employ persons who perform services while imprisoned in their institutional division of the Texas Department of Criminal Justice or while confined in a local jail are exempt from the minimum wage law.

Family Members

Employers are exempt from Texas’s minimum wage law with respect to employment of immediate family members or in-laws.

Amusement and Recreational Establishments

Employers are exempt from Texas’s minimum wage law with respect to employment in amusement or recreational establishments that do not operate for more than seven months in a calendar year; or that had average receipts for any six months of the preceding calendar year of not more than 33^1/3 percent of its average receipts for the other six months of the year.

Noncontributors to Unemployment Compensation Fund

An employer that is not liable for payment of contributions to Texas’s unemployment compensation fund is exempt from the minimum wage law, except with respect to employment of a person in agriculture.

The Unemployment Compensation Commission will furnish a certificate stating whether a specified employer is liable for the payment of contributions, upon request.

Agriculture

Employers are exempt from Texas’s minimum wage law with respect to employment of a person in dairy farming. Provisions concerning the minimum wage, tipped employees, meals and lodging, and on-call employees do not apply to an agricultural employer with respect to an employee engaged in the production of livestock.

The production of livestock includes any livestock operation, without regard to size or type of location, in which the land produces forage or feedstuffs, including the following:

Naturally or artificially revegetated forage or feedstuffs.
Breeding.
Feeding, and watering livestock.
Containing, maintaining, and caring for livestock.
Producing of livestock in feedlots.
All other activities necessary or useful to the raising of livestock.

Sheltered Workshops

A nonprofit-charitable organization that is engaged in evaluating, training, and employment services for clients with disabilities and that complies with federal regulations covering those activities is considered to be in compliance with Texas’s minimum wage law.

Tipped Employees

A tipped employee is an employee engaged in an occupation in which the employee customarily and regularly receives more than $20 a month in tips.

A tipped employee must receive the minimum wage, but the employer may take credit for the employee’s tips in an amount not exceeding 50 percent of the Texas minimum wage. The tip credit can be no more than the amount of tips actually received by the employee. Tips plus wages must equal or exceed the minimum wage.

On-Call Employees

An employer may not be required to pay an employee who lives on the premises of a business and who is assigned certain working hours plus additional hours when the employee is subject to call for more than the number of hours the employee actually works or is on duty because of assigned working hours.

Food and Lodging

An employer may include as wages paid to an employee the reasonable cost to the employer of furnishing meals, lodging, or both, if the employer customarily furnishes meals or lodging to employees and such costs are separately identified in the employee’s earning statement.

Agricultural Piece-Rate Workers

A person employed as an agricultural piece-rate worker to harvest a commodity for which the commissioner has established a piece-rate is entitled to receive no less than the minimum hourly wage.

The minimum wage applies to an employer employing a hand harvest laborer to harvest a commodity for which a piece rate has not been established. An employer may not pay an agricultural piece-rate worker at a piece rate less than the rate determined by the commissioner.

Patients and Clients of the Texas Department of Mental Health and Mental Retardation

A person may be compensated for services rendered to the Texas Department of Mental Health and Mental Retardation or a department facility at a percentage of the base wage if:

The person is a patient or client of a department facility.
The person’s productive capacity is impaired.
The person:
- Assists in the operation of the facility as part of the person’s therapy.
- Receives occupational training in a sheltered workshop or other program operated by the department.
The facility or department derives an economic benefit from the person’s services.
The percentage of the base wage paid corresponds to the percentage of the person’s productive capacity compared with the capacity of an employee who performs the same or similar tasks and who is not similarly impaired.

Collective Bargaining

Texas’s minimum wage law does not limit the right of employees to bargain collectively through representatives of their own choosing to establish wages in excess of the applicable minimum wage or to establish hours of work shorter than the applicable maximum.

Vacation, Sick, and Parental Leave Policies

Vacation leave, sick leave, and parental leave are not required under Texas law. If such leave is granted it may be paid or unpaid. An employer may impose a cap on such leave and can put substantial eligibility strings on vacation, sick, or parental leave.

Paid vacation or sick leave is usually accrued at a set amount per month or year, while parental leave is usually just a set amount per parental event (birth or adoption of a child or placement of a foster child in the home).

Record-keeping

Texas’s minimum wage law does not contain any record-keeping provisions.

The following are the types of information that employers must maintain for each employee for possible inspection by U.S. Department of Labor as specified in 29 C.F.R. 516.2(a):

The employee name, address, and date of birth (if under 19).
The employee gender and occupation.
The employee’s workweeks.
The employee’s rates of pay.
The employee’s wage payment basis.
Hours worked by the employee.
The employee’s straight-time earnings.
The employee’s overtime pay on a workweek basis.
Deductions and additions to the employee’s pay.
Total wages paid to the employee.
Pay periods of the employee.
Backpay paid to the employee.

While some wage and hour records must be kept only two years, others require retention for three years, and since many payroll tax disputes involve employee pay issues, it is recommended to keep all wage and hour records for three years at the very least.

Civil Liability

Any employee aggrieved by a violation of the Texas minimum wage law may bring a civil action against the employer within two years of the date in which the unpaid wages were due and payable. Any employer that violates Texas’s minimum wage law is liable to the affected employee in the amount of the unpaid wages plus an additional equal amount as liquidated damages. The court will also award the employee reasonable attorneys’ fees and costs.

Day of Rest for Retail Workers

Texas’s day of rest law for retail workers is located at Tex. Lab. Code § 52.001. Employers cannot require employees to work seven consecutive days in any business that sells merchandise at retail. Employees are entitled to receive at least one consecutive 24-hour day off for rest or worship in each seven-day period. This must be in addition to regular rest periods for each day.

The employer must accommodate the religious beliefs and practices of an employee unless the employer can demonstrate that to do so would constitute an undue hardship on the conduct of the employer’s business. In addition, the person may not require an employee to work during a period that the employee requests to be off to attend one regular worship service a week of the employee’s religion.

This provision does not apply to employment of a part-time employee whose total work hours for one employer during a calendar week do not exceed 30 hours.

Nurses and Overtime

According to Tex. Health and Safety Code §§ 258.002 – 258.005, a hospital may not require a registered or vocational nurse to work mandatory overtime, and a nurse may refuse to work mandatory overtime. Additionally, a hospital may not use on-call time as a substitute for mandatory overtime. However, a nurse is not prohibited from volunteering to work overtime.

Exceptions

The overtime protections do not apply under the following circumstances:

A health care disaster, such as a natural or other type of disaster that increases the need for health care personnel, unexpectedly affects the county in which the nurse is employed, or affects a contiguous county.
A federal, state, or county declaration of emergency is in effect in the county in which the nurse is employed or is in effect in a contiguous county.
There is an emergency or unforeseen event of a kind that:
- Does not regularly occur.
- Increases the need for health care personnel at the hospital to provide safe patient care.
- Could not prudently be anticipated by the hospital; or the nurse is actively engaged in an ongoing medical or surgical procedure and the continued presence of the nurse through the completion of the procedure is necessary to ensure the health and safety of the patient.

If a hospital determines that an exception exists, then the hospital must, to the extent possible, make a good faith effort to meet the staffing need through voluntary overtime, including calling per diems and agency nurses, assigning floats, or requesting an additional day of work from off-duty employees.

Retaliation

A hospital may not suspend, terminate, or otherwise discipline or discriminate against a nurse who refuses to work mandatory overtime.

Note: According to Tex. Occ. Code § 301.356, the refusal to work mandatory overtime does not constitute patient abandonment or neglect and nurses are granted additional protections from suspension, termination, discipline, or discrimination for refusal to work mandatory overtime.