A Complete Guide to Salaried Employees in Texas

July 16th 2024

Understanding the employment framework can be complex, particularly regarding the specifics of salaried employment. In Texas, salaried employees receive certain benefits and protections that differ significantly from those of hourly workers. Employers in Texas need a comprehensive understanding of their responsibilities in payroll processing, determining overtime eligibility, providing benefits, and managing overall labor costs.

This article addresses critical questions about salaried employees in Texas and how they differ from hourly employees, providing a comprehensive guide to help employers navigate these distinctions.

This Guide Covers

What is a Salaried Employee in Texas?

In Texas, a salaried employee refers to someone who is paid a fixed amount regularly, typically weekly, bi-weekly, or monthly, regardless of the number of hours worked. Salaried employees are primarily exempt from overtime pay if they meet specific criteria related to job duties and salary level as defined by the Fair Labor Standards Act (FLSA). These criteria typically include being paid a salary that meets a certain threshold and performing primarily executive, administrative, professional, and outside sales duties.

How Does Salary Pay Work in Texas?

The Texas Payday Law mandates employers pay salaried employees at least once a month. Most employers pay more frequently, such as bi-weekly or semi-monthly, and set the payday at a designated date. Employers can make certain deductions from a salaried employee’s pay, but these must comply with federal and state laws. Unauthorized deductions could jeopardize an employee’s exempt status.

How Many Hours Do Salaried Employees Work in Texas?

The number of hours worked by salaried employees in Texas can vary widely depending on their job role, industry, and company policies. Unlike hourly employees, salaried employees are paid a fixed amount regardless of the hours worked each week.

Many salaried employees are expected to work a standard 40-hour workweek, eight hours a day for five days. However, actual hours can vary depending on job demands and company culture. Under the FLSA, non-exempt employees are eligible for overtime pay for hours worked over 40 in a workweek.

Are Salaried Employees in Texas Entitled to Overtime Pay?

Salaried employees’ eligibility for overtime pay in Texas depends on their classification under the FLSA. Employees are classified as exempt and non-exempt.

Non-exempt employees can be salaried or hourly. They must receive overtime pay at one and one-half (1.5) times their regular pay rate for all hours worked over 40 in a workweek.

Exempt salaried employees are not entitled to overtime pay, regardless of how many hours they work a week, as their salary covers all the time worked. To be classified as exempt, employees must meet certain salary levels, salary bases, and job duties tests. The salaried employee must receive a predetermined and fixed salary that is not subject to reduction based on the quality or quantity of work performed. As of July 2024, exempt employees in Texas are paid a salary of at least $844 weekly ($43,888 per year). The employee’s primary job duties must involve executive, administrative, or professional tasks.

Employers must accurately classify employees to comply with FLSA regulations and avoid wage violations.

Do Salaried Employees in Texas Get Work Benefits?

Salaried employees in Texas often receive various work benefits, including health insurance, retirement savings, and paid time off (PTO). Other common benefits are bonuses, incentives, and other employer-specific perks. Many employers offer comprehensive benefits packages to attract and retain skilled employees. The specific benefits can vary widely depending on the employer and the employee’s position within the company.

Do Salaried Employees in Texas Get Paid If They Do Not Work?

In Texas, the payment of salaried employees who do not work depends on the specific circumstances of their absence. Salaried employees must be paid their full salary for any week they perform work, regardless of days or hours worked. However, there are exceptions for absences under certain circumstances:

  • If an employee performs no work during a workweek, the employer is not required to pay the employee for that week.
  • If an employee is absent for one or more full days for personal reasons other than sickness or disability, the employer can deduct it from the employee’s salary.
  • If the employer has a bona fide sick leave plan, the employer can deduct from the employee’s salary for full-day absences due to sickness or disability, but only if the employee has exhausted their leave allowance.
  • If an employee takes unpaid leave under FMLA, the employer can deduct the time off from the employee’s wages.
  • Employers cannot deduct from the employee’s salary for full-day absences due to jury duty or temporary military leave.
  • When the employee works less than 40 hours in their first or last week of employment, the employer must only pay the actual hours.

Learn more about Texas Leave Laws in our detailed guide.

Should You Track Salaried Employee Time in Texas?

Some thought tracking salaried employees’ time is not beneficial as they are paid a fixed amount regardless of their hours worked. However, time tracking for salaried employees can provide valuable insights into productivity, workload distribution, and project management and ensure adherence to company policies regarding work hours, breaks, and overtime entitlement.

While exempt employees do not receive overtime pay, non-exempt salaried employees are entitled to overtime compensation for hours worked beyond 40. Time tracking provides accurate records of all hours worked and wages paid, ensuring compliance with overtime laws.

What’s the Difference Between Salaried and Hourly Employees in Texas?

The main difference between salaried and hourly employees in Texas is how they are compensated. Hourly employees are paid based on hours worked, while salaried employees receive a fixed salary regardless of their hours worked.

Other key differences exist between the two types of employees regarding overtime eligibility, work schedules, job duties, and other employment aspects. This table outlines the differences between hourly and salaried employees:

Employment Aspect Salaried Employees Hourly Employees
Pay Structure Receive a fixed salary amount per pay period Paid based on the number of hours worked
Pay Rate Fixed amount regardless of hours worked Hourly rate multiplied by hours worked
Overtime Eligibility Exempt from overtime pay if they meet specific criteria under the FLSA Eligible for overtime pay at a rate of 1.5 times their regular hourly rate for hours worked beyond 40 in a workweek
Work Schedule Often expected to work full-time with a more consistent schedule of hours Work hours depend on shifts or assigned hours, which may vary from week to week
Benefits May receive benefits such as paid time off, health insurance, and retirement plans Benefits eligibility may vary depending on company policy
Job Duties Generally expected to perform managerial, administrative, professional, or specialized work Often assigned in retail, clerical, blue-collar roles

If you want to know more about the entitlements of employees in Texas, you can read our guides on Your Rights as a Salaried Employee in Texas and Your Rights as an Hourly Employee in Texas.

Which Should You Hire in Texas: Salaried or Hourly Employees?

Whether to hire a salaried or hourly employee in Texas depends on the company’s needs and the nature of the job. Salaried positions are suitable for roles that require stability and higher responsibility. Hourly positions are ideal for jobs requiring flexibility and clearly defined tasks.

Consider hiring salaried employees if:

  • The job requires consistent, full-time hours and does not have significant fluctuations in the workload.
  • The position demands specialized skills, professional expertise, or managerial responsibilities.
  • Employees are needed for long-term projects or roles that involve ongoing responsibilities rather than task-based work.
  • You intend to offer comprehensive benefits such as health insurance, retirement plans, and paid time off.
  • You seek to attract and retain talent by providing a stable income and career growth opportunities.

Consider hiring hourly employees if:

  • The workload fluctuates based on demand in retail, hospitality, or seasonal industries.
  • The position is part-time, temporary, or involves shift work that does not require a full-time commitment.
  • The job involves entry-level tasks or does not require specialized skills.
  • You need to control labor costs by paying only for hours worked.
  • You prefer the flexibility of managing overtime pay, which is more straightforward. Hourly employees are entitled to overtime for hours worked beyond 40 a week.

Learn more about Texas Labor Laws through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.