When one is employed, it is possible that the individual work outside of the hours agreed-to in the contract between an employer and employee. These hours outside the agreed-to hours of employment are considered overtime hours and are to be paid according to Texas and federal laws. What laws indicate how an employee should be paid for overtime hours? Let’s see.
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What is Overtime and How is it Paid in Texas?
A typical work week for the average employee is about 40-hours of billable hours a week. The Texas Pay Day Law, or Chapter 61 of the Texas Labor Code, allows most employees to be compensated for any amount of hours worked outside the typical 40-hours a week, or however many hours agreed to by the employee and employer.
Overtime in Texas is meant to be compensated at the rate of one and half times the employee’s regular rate—this is also the rate set by federal law. Texas allows the employee to be compensated either by requiring the employee to take time off with the equivalent of time worked overtime instead of cash(this is called comp time); or receiving 1.5 times the employee’s regular rate of pay.
Federal Overtime Laws
The most current form of the Fair Labor Standards Act of 1938 (FLSA) has a direct impact on Texas overtime laws. The FLSA sets standards and requirements which outline how overtime should be calculated. The FLSA states,
Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.
Texas is a state that sets its overtime laws in the same way as FLSA. This means that Texas does not have a unique overtime law; any question of the law would be dealt with the federal government and under the FLSA.
Who is not Entitled to Overtime?
As per federal law, the FLSA states that not all employees are entitled to overtime. Employees who are not entitled to overtime compensation are referred to as “exempt employees” by both Texas and federal law.
An individual who earns a set annual salary of a specified amount, over the amount set by law, are considered “exempt” and are not entitled to overtime compensation. In other words, exempt employees working over 40-hours a week are not entitled to overtime compensation.