Compliance Watch:
What are my rights as an hourly employee in Texas?

August 8th 2024

As an hourly employee in Texas, knowing your rights extends beyond meagre legal requirements, it is a pathway to empowerment and self-confidence in your career trajectory. 

As you punch in and out everyday, your compensation from your hard-earned efforts influences your position within the workforce. You may begin to reflect about your rights as an employee and how you can execute those rights effectively. Nevertheless, the complexities of these arrangements can substantially differ from state to state in the United States.

As an hourly employee in Texas, this article is customized particularly for you. Our goal is to not only provide you with necessary information that conserves your equitable rights but also enable you to actively structure your work experience in a legally and regulatory compliant fashion in accordance to your specific state.

This Article Covers

Defining an Hourly Employee in Texas
Wage and Hour Regulations in Texas
Rest Laws in Texas
Deductions, Benefits, and Protections in Texas
Termination of Employment in Texas

Defining an Hourly Employee in Texas

What is Hourly Employment in Texas?

In Texas, an hourly worker is an individual who is remunerated based on the total hours they put in during a given week. In contrast to salaried workers who receive a fixed pay regardless of the weekly work hours, hourly employees are remunerated in direct proportion to the time they invest. 

Hourly wage employees generally form particular employment agreements with their employers, deploying techniques such as time cards or timesheets to document their working hours. The onus lies on the employers to ascertain their employees’ weekly work hours.  

An hourly wage worker’s compensation is largely conditional on the actual hours they work. Differing from salaried employees, whose pay is fixed, hourly workers have their earnings tied to their work schedule. Consequently, their wages can alternate from one week to the next.

For an hourly wage earner in Texas, there are no particular state-level regulations regarding employee wages. Thus, employers must abide by federal wage laws stipulated by the US Department of Labor (DOL). This requires all US employers to remunerate their employees the federally mandated minimum wage, unless otherwise exempt. While there are no strict limitations pertaining to the maximum hours a person can work within a week, there are particular guidelines regulating hourly pay when it exceeds designated weekly limits.

Regarding the minimum wage rate, Texas complies with federal law which applies to all states in the US. Hence, employees in Texas who do not qualify for an exemption from the minimum wage requirement are eligible to receive a rate of at least $7.25 for each hour of work regardless of the industry they work in or the size of the employer.

What are the Key Differences Between Salaried and Hourly Employees in Texas?

Here’s a comparison table highlighting the key differences between hourly and salaried employees in Texas:

Key Differences Hourly Employees Salaried Employees
Compensation Paid a set wage based on the number of hours worked. Paid a fixed salary regardless of the number of hours worked.
Minimum Wage Entitled to receive at least the federal minimum wage for each hour worked. Entitled to federal minimum wage requirements (if they are non-exempt).
Overtime Pay Eligible for overtime pay for hours worked beyond 40 hours in a workweek (typically 1.5 times their regular hourly rate). Typically exempt from overtime pay if they meet the exemption criteria under the Fair Labor Standards Act.
Work Schedule Compensation is directly proportional to the actual hours worked. Compensation remains fixed regardless of the actual hours worked.
Rest and Meal Breaks Generally entitled to rest and meal breaks although employers are not obliged to give such breaks under federal law. Same general entitlement to rest and meal breaks as hourly employees.

To learn more about Texas labor laws, you can access our informative guides on understanding your rights as a salaried employee in Texas and discovering how to run payroll in Texas.

Wage and Hour Regulations in Texas

What are the Maximum Weekly Working Hours in Texas?

In Texas, there are no state or federal laws defining the maximum number of hours an employee is legally allowed to work within a day. Nevertheless, under state law, an exception is given to retail employees whereby a retail employer must allow full-time employees (statutorily defined as individuals who work more than 30 hours in a workweek) to have a full day off in each seven-day week.

What is the Minimum Wage for Hourly Employees in Texas?

The minimum wage in Texas currently follows the federal minimum wage of $7.25 per hour, covering all employees irrespective of industry, employer size, and those who do not qualify for minimum wage exemptions. According to the regulations of the U.S. Department of Labor, individuals who earn more than $20 in tips per month are categorized as tipped employees and receive a base hourly wage of $2.13.

Download U.S. Minimum Wage 2024 Poster now.

Do All Employees Earn the Minimum Wage in Texas?

Nonetheless, it’s essential to note that there are specific groups of employees who might be exempt from the minimum wage requirement, and both federal and state laws have corresponding provisions pertaining to these exemptions. According to the Fair Labor Standards Act (FLSA), employees who are not subject to the minimum wage comprise of:

  • Executives, professionals, and administrative employees earning at least $684 per week.
  • Computer employees who earn at least $684 per week or $27.63 per hour.
  • Highly compensated employees earning $107,432 per year or more.
  • Farm workers.
  • Fishing industry workers.
  • Seasonal and leisure workers.

Download U.S. FLSA Exemption Salary Threshold 2024 Poster now. 

In addition to federal exemptions, Texas has its own set of exemptions that employers are obliged to follow. These include exemptions for:

  • Employees of religious, educational, charitable, or nonprofit organizations
  • Professionals, salespersons, or public officials
  • Domestic workers
  • Certain youths and students
  • Inmates employed during incarceration in the institutional division of the Texas Department of Criminal Justice or local jails
  • Family members working for a family business (referring to referring to the employer’s brother, sister, brother-in-law, sister-in-law, child, spouse, parent, son-in-law, daughter-in-law, ward, or person in loco parentis to the employee)
  • Employees of amusement and recreational establishments
  • Non-agricultural employers not liable for state unemployment contributions
  • Individuals employed in dairy farming and livestock production
  • Sheltered workshops for individuals with disabilities

How Many Hours Qualify As Overtime and What is the Associated Pay in Texas?

Texas based employers are obligated by both federal and state legal standards to compensate employees who work more than 40 hours in a workweek by either providing compensatory rest (fixed at a rate of 1.5 hours for every hour worked overtime) or overtime payment (set at an hourly rate of 1.5 times their regular hourly wage).

Given that the standard minimum wage in Texas is $7.25 per hour, the overtime minimum wage in Texas is $10.87 per hour, equating to one and a half times the basic wage rate.

It’s important to bear in mind that Texas primarily follows the regulations of the Fair Labor Standards Act (FLSA). Hence, extra pay for working on weekends, holidays, or regular days of rest is not mandated in Texas.

Rest Laws in Texas

What are the Offered Meal and Rest Breaks for Hourly Employees in Texas?

The provision of meal breaks and rest breaks lies completely at the discretion of the employer, as they are not legally required to offer such benefits under both Federal and State regulations. Thus, such breaks are customarily offered by employers but are not mandated by law.

There are also exceptions that apply to the break Law in Texas. These are applicable to:

  • Nursing mothers (who must be allowed time to express milk in a non-restroom space in the first year after childbirth as per federal guidelines).
  • Individuals who are obligated to work during a meal break (such as customer service agents or call center employees where such breaks must be compensated).
  • Construction workers (who are entitled to 10 minutes rest break for every four hours worked).
  • Employees whose break last for 20 minutes or less.

What Laws Govern Time Off and Leaves for Hourly Employees in Texas?

For a variety of reasons, employees take time away from work and are afforded the right to take leave for specific durations of time while having their job status protected. Hourly employees in Texas are primarily regulated by federal laws, state laws, and employer policies with regards to leave entitlements. Below are the key legislations governing such entitlements in Texas:

  • The Family and Medical Leave Act (FMLA) is an essential legal foundation that regulates leave entitlements for employees in Texas. This federal law entitles employees with up to 12 weeks of unpaid leave per year to attend to specific family and health matters while safeguarding their job status.
  • The Fair Labor Standards Act (FLSA) is also another federal law that influences leave benefits and mandates only particular types of leaves. Hence, other types of leaves may be implemented by employers as an incentive.

It is crucial for hourly employees in Texas to not only review their employment contracts and employer policies to know their specific rights to time off and absence leaves but also keep abreast with any applicable local ordinances within their particular city or jurisdiction, as these may grant them additional leave protections.

Deductions, Benefits, and Protections in Texas

What are the Laws Regarding Pay Deductions for Hourly Employees in Texas?

With regards to pay deductions for hourly employees, the Texas Payday Law is the governing legislation. It states that an employer possesses the legal right to make legal deductions from an employee’s salary without prior written authorization by the employee, as long as they have been ordered to do so by court (child support) or are expressly authorized by law (payroll taxes and IRS debt).

For other deductions, a written authorization from the employee must be sought by the employer before making a payroll deduction. Such deductions cannot reduce an employee’s pay check below minimum wage and may encompass the following:

  • Uniforms and uniforms cleaning costs
  • Tip credits
  • Union dues
  • Cash losses due to misappropriation
  • Voluntary wage assignments, loans, and advances
  • Vacation pay advances
  • Lodging, meals and other facilities

What are the Provided Hourly Employees Entitlements Under Texas State Law?

Below are some of the many employment entitlements that hourly employees in Texas are entitled to:

  • Minimum Wage: Employees are entitled to receive the federal minimum wage of $7.25 per hour. Most employees are covered under both state law and the Fair Labor Standards Act (FLSA).
  • Overtime: Hourly employees are entitled to receive overtime pay, calculated at one and a half times their regular wage, for each hour worked beyond 40 hours in a workweek. For example, if an employee earns $7.25 per hour and completes 50 hours during a specific workweek, they should receive $10.87 per hour for those additional 10 hours.
  • Family and Medical leave: Employees are eligible for up to 12 weeks of unpaid leave per year if they have been employed by their current employer for a minimum of 12 months or 1,250 hours within the past 12 months. This leave is covers various employees, including all state employees, public and private elementary or secondary school employees, and workers employed in companies with a workforce of at least 50 individuals. The categories of leave under the Family and Medical Leave Act include the birth, adoption, or fostering of a child, the care of an immediate family member with a serious health condition, as well as the employee’s own serious health condition. 
  • Paid Sick leave: Many hourly workers accumulate a specific amount of paid sick leave annually, which can be utilized to offset lost wages when they take time off under the Family and Medical Leave Act (FMLA), despite the fact that the latter is not compensated.
  • Vacation Time: Hourly workers may also accrue paid vacation leave depending on the policies set by their employer. While there are no state laws mandating specific requirements for vacation time, vacation policies are accrual rates that generally rest at the discretion of the employer.
  • Paid Maternity/ Paternity leave: Just like salaried employees, hourly workers do not have an assured entitlement to paid maternity or paternity leave. The availability of such paid leave is subject to the employer’s decision and may be outlined in the contract of employment or company policies.
  • Unemployment Benefits: Employees who have been dismissed through no fault of their own are entitled to unemployment benefits as administered by the Texas Workforce Commission.

What are the Provided Hourly Employee Protections Under Texas State Law?

Texas labor law provides an array of entitlements which protects the employment rights of all of its employees, including those of hourly employees, although Texas labor law generally adheres to federal law in many employment aspects. The following rights include:

  1. Rights to minimum wage: All employees in Texas are legally entitled to having their employment rights secured pertaining to minimum wage under the FLSA.
  2. Other mandatory leave provisions: Employees enjoy designated periods of leave such as jury service leave, volunteer service leave, military leave, and leave as an Organ or Bone Marrow Donor.
  3. Violations reporting: The whistleblower laws are state regulations implemented to empower employees to freely report unethical workplace practices or violations of their rights without fear of facing retaliation, such as demotions or employment dismissal, whilst having their employment status safeguarded.
  4. Workplace safety: The Occupational Safety and Health Act (OSHA) is a federal law that obliges employers to provide employees with a safe work environment, protect them  from safety hazards and provide safety training.
  5. Discrimination and Harassment: The Texas Workforce Commission is the state agency which enforces anti-discrimination laws to protect individuals from workplace discrimination based on religion, sex, race, color, national origin, age and disability.
  6. Paid 10-minute breaks: Employees are compensated a 10 minute break for every four hours of work and should receive wages for each workday when their breaks are taken without prior authorization or approval from the employer.

Termination of Employment in Texas

What are the Termination Laws for Hourly Employees in Texas?

In the aspect of termination, Texas adopts the ‘employment-at-will’ doctrine whereby both employers and employees enjoy the freedom to terminate the employment contract at any time without prior notice and for any reason except an illegal reason which provides an exception to this principle. Wrongful termination occurs when an employer terminates an employee for reasons that are not legally valid, including:

  • Sexual orientation
  • Military duty
  • Veteran status
  • Reporting or lodging a complaint about suspected wrongful conduct related to employment discrimination, standards of the Occupational Safety and Health Act (OSHA), wages, and other similar issues.
  • Race, color, religion, gender, pregnancy, age, national origin, or disability
  • Jury duty
  • Voting
  • Union membership

When an employment contract is terminated in Texas, the employer must comply with particular rules with regards to the final payment of wages. The following two prerequisites apply:

  • If an employee has been terminated, the employer is obligated to make a final wage payment within 6 calendar days.
  • If an employee resigns, the employer must issue the final wage payment no later than the next regularly scheduled payday.

Should Severance Pay Be Provided to Hourly Employees in Texas?

Severance pay is the additional payment given to all employees at the end of their employment for their past work. Under Texas labor law, employers are not obligated to offer severance pay to their hourly or salaried employees upon their termination, unless it has been agreed in the written contract, company policy or the collective bargaining agreement.

Final Thoughts

In conclusion, as an hourly employee in Texas, it is crucial to acquire a solid understanding of the rules that regulate your employment to ensure that your rights are upheld and safeguarded.

Due to the dynamic nature of employment laws, keeping abreast of the latest advancements will equip you with the knowledge required to make well informed decisions throughout your career path.

Important Cautionary Note

When making this guide we have tried to make it accurate but we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you seek advice from qualified professionals before acting on any information provided in this guide. We do not accept any liability for any damages or risks incurred for use of this guide.