Overview

In 2006, the federal government recovered more than $120.5 million in overtime pay violations and assessed nearly $2.9 million in civil money damages.  These figures don't include the millions of dollars in unpaid overtime recovered by law firms.  It's surprising then that Texas employers continue to intentionally and unintentionally violate federal and Texas overtime law. 

Federal Overtime Law and Texas Overtime Law

The Fair Labor Standards Act--the federal law governing Texas overtime pay--splits workers into two groups:  employees who are entitled to overtime compensation called "non-exempt" employees and employees not eligible for overtime compensation called "exempt" employees.

Non-exempt employees include employees who are paid hourly and paid on a salary basis.  They are entitled to overtime compensation for all hours worked over 40 in any workweek at 1.5 times an employee's regular pay rate.  For example, if a non-exempt employee earns $10.00 per hour, the employee should receive $15.00 per hour for every hour worked over 40 hours in any workweek.

Are You Entitled to Overtime Pay:  Exempt v. Non-Exempt

Whether an employee is entitled to overtime pay depends on two main factors: 

1.  Is the employee paid on a salary; and

2.  Do the primary job duties the employee performs fall within one or more of the overtime exemptions (e.g. administrative, professional, executive, outside sales, computer-related professional, etc.).

Under this test, almost all hourly employees and many salaried employees are entitled to overtime pay, including unpaid overtime wages, liquidated damages (double damages), attorneys' fees and costs if they have been denied overtime pay in the past two or three years.

The New Overtime Law

In August 2004, the U.S. Department of Labor issued new overtime rules expanding the overtime protections enjoyed by hourly and salaried employees. Under these new overtime regulations, employees who receive less than $23,660 per year automatically are eligible for overtime pay. On the other hand, employees who earn $100,000 or more annually and regularly perform exempt duties no longer are eligible for overtime pay.  The new overtime law also clarified the FLSA's overtime requirements for the executive and administrative exemptions.

What's Inside Your Employer's "Bag of Tricks":  Common Overtime Violations

Employers understand that overtime law is complex and difficult for employees to understand without assistance.  Employers often utilize similar tricks and ploys to deny employees Texas overtime pay.  Employees who are able to recognize them are better equipped to protect their overtime rights.  In addition to an employer flatly refusing to answer employees' questions about overtime pay, these tactics include:

1.  The "Reclassification" Myth

If you didn't receive overtime pay but you do now because your employer recently reclassified your position and your job never changed, there's a good chance that you are a victim of the Reclassification Myth.

In these situations, your employer probably violated your overtime rights from the start and reclassified your position only after learning about the violation.  Because your duties didn't change, your reclassification may amount to an admission that the company violated overtime law.  Your employer's reclassification without paying you back overtime wages also may constitute a "willful" violation.

2.  The "Salaried Employee" Myth

Many employers tell their employees that they are not entitled to Texas overtime pay because they are "salaried." Merely because you receive a salary, however, does not mean that you are not entitled to overtime pay.

Under Texas overtime law, all employees must receive overtime pay unless they are paid a salary of at least $455 per workweek and perform duties satisfying one of the recognized overtime exemptions.  If your employer cannot prove that one of these narrow exemptions apply, you may be entitled to overtime pay.

3.  The "Independent Contractor" Myth

Some employers label their workers as "independent contractors," "temporary workers," "contract labor," "temp-to-perm," and similar terms in an effort to avoid overtime pay obligations. This is because, under federal law, overtime pay is only available to "employees." However, a significant number of these workers really are employees. 

If your employer retains the right to control when, where, and how you work, there's a good chance that you are a victim of the Independent Contractor Myth and your employer is violating Texas overtime law by not paying you overtime pay.

4.  The "Straight Time Only" Myth

Overtime law mandates that employers pay at least 1.5 times an employee's regular rate of pay for all hours worked in excess of 40 in any workweek.  There is almost no exception for hourly-paid employees. That means, if you make $15.00 per hour, you should receive $22.50 per hour for overtime hours. 

If you are an hourly employee and you do not receive at least 1.5 times your regular pay rate for your overtime hours, there's a good chance your employer is not complying with federal and Texas overtime law.

5.  The "Unauthorized Overtime" Myth

If your employer has ever deleted hours from your timesheets or refused to pay you overtime pay because it was not pre-approved, you're probably a victim of the Unauthorized Overtime Myth.

Texas overtime law requires employers to pay employees for all hours worked in excess of 40 per workweek if the employer knew or reasonably should have known the employee worked overtime.  This means that, under overtime law, most employees should receive overtime pay even if their employer maintains a policy prohibiting overtime work without prior approval and the employee did not receive authorization.

6.  Stealing Time.

Some employers violate overtime law by not paying employees for all hours worked.  Under Texas overtime law, employees must be paid for most work performed before clocking-in, while putting on safety or other protective wear, during lunch breaks, traveling between work sites after the start of the work day, and after clocking-out.  This also may include "on-call" time and time attending mandatory work meetings or training.

7.  The "Commissioned Employee" Myth

Many employers tell their employees that they are not entitled to overtime pay because they are a commissioned employee.  But if your job does not require regular travel away from your employer's workplace, there's a strong chance that you are a victim of the "Commissioned Employee" Myth.  This is true whether you receive a commission as the sole source of your compensation or in addition to a guaranteed salary, draw, or hourly rate.  For this reason, many employees who perform inside sales, recruiting, and business development work, and whose jobs do not regularly require them to travel, generally are entitled to overtime pay.

Employees Must Act Fast or Lose Earned Overtime Pay

Texas overtime law normally permits employees to recover unpaid overtime for work performed beginning two years before a lawsuit is filed (and continuing "forward" until the case is resolved).  This limitations period increases to three years before a lawsuit is filed if your employer "knew" that its pay practices violated the FLSA, but "disregarded" these obligations. 

It is important for employees to understand that the limitations period on overtime claims continues to run until a lawsuit is filed.  This means that a complaint to your supervisor, the company, or the Department of Labor (Labor Board) generally will not “stop the clock.” For this reason, employees should obtain all necessary facts to understand their overtime pay rights and file suit as soon as they learn that their employer violated overtime law.

Contact a Dallas Overtime Lawyer

Dallas employment lawyer Barry Hersh dedicates a significant part of his practice to resolving Texas wage and compensation disputes with a special emphasis on recovering Texas overtime pay for employees and individuals misclassified as independent contractors.  To submit your claim for a free evaluation, contact us here.