Under Texas labor laws, overtime pay is primarily governed by the federal Fair Labor Standards Act (FLSA). While Texas does not have its own state‑specific overtime statute, employers must comply with federal rules requiring time‑and‑a‑half pay for hours worked beyond the standard 40‑hour workweek.
Navigating Texas overtime laws can be complex, especially when dealing with exemptions, salaried employees, or commission‑based pay.
This guide breaks down the essentials of overtime regulations in Texas, covering eligibility, calculation methods, exemptions, and penalties, so that businesses, HR managers, and agencies can stay compliant and ensure fair compensation for their workforce.
Texas Overtime Laws Summary
| State overtime law | Overtime applies after 40 hours in a workweek under the Fair Labor Standards Act |
| Overtime pay rate | 1.5 times the employee’s regular hourly rate for all overtime hours worked |
| Minimum wage | $7.25 per hour (federal standard) |
| Minimum overtime rate | $10.88 per hour |
| Comp time instead of overtime pay | Allowed |
| Salary threshold for overtime exemption | $684 per week (federal standard) |
This Article Covers
- Texas Overtime Pay Rates
- Overtime Entitlement in Texas
- Refusing to Work Overtime in Texas
- Compensatory Time in Texas
- Overtime Pay for Tipped Employees in Texas
- Overtime Pay for Salaried Employees in Texas
- Overtime Pay for Commissioned Employees in Texas
- Overtime Exceptions and Exemptions in Texas
- Penalties for Unpaid Overtime in Texas
Texas Overtime Pay Rates
The majority of hourly employees in Texas have the right to an overtime pay rate. The Fair Labor Standards Act (FLSA) determines this as a rate mandated for employees who work over a total of 40 hours a week.
Overtime in Texas is set at 1.5 times the regular hourly rate for workers who exceed 40 hours a week.
Since the regular Texas minimum wage is $7.25 per hour, that makes Texas’ overtime minimum wage $10.88 per hour (1.5 times the minimum wage).
Overtime Entitlement in Texas
In Texas, overtime pay is required for all non-exempt employees.
The only employees who are not entitled to overtime are those classified as exempt, such as executives, administrative, and others.
Read more about Overtime Exceptions and Exemptions in Texas.
Refusing to Work Overtime in Texas
There are no protections in Texas for those who choose to refuse to work overtime. You may have to face disciplinary action for your refusal, which may lead to termination.
Compensatory Time in Texas
Texas overtime laws allow employers to provide compensatory time or “comp time” to non-exempt employees instead of cash compensation. Comp times are given on a time-and-a-half basis for each overtime hour worked.
However, most employees can only accrue up to 240 hours of comp time. After that, the employee must receive overtime pay at 1.5 times their regular rate of pay for any additional overtime hours worked.
Employees engaged in public safety, emergency response, or seasonal activities are allowed to accrue up to 480 hours of comp time (such as police officers or firefighters). After that, they must be compensated in cash for overtime.
Overtime Pay for Tipped Employees in Texas
Any employee who earns more than $20 a month in tips is classified as a tipped employee in Texas. They are entitled to overtime pay at 1.5 times the employee’s regular rate of pay.
However, their minimum cash wage is lower than the standard state minimum wage. A tip credit system allows Texas employers to pay their tipped employees a minimum lower cash wage of $2.13 per hour and use a tip credit of up to $5.12 per hour. The employee’s total earnings (cash wage + tips) must equal the state’s minimum wage of $7.25 per hour; otherwise, the employer must cover the difference.
A tipped employee’s overtime pay rate will be calculated based on the full minimum wage and not the lower cash wage that they are being paid.
Employers are also not permitted to take a higher tip credit for an employee’s overtime hours than they do for regular hours.
Overtime Pay for Salaried Employees in Texas
In Texas, all employees (salaried or not) must be given overtime pay unless they meet the salary threshold for overtime exemption. Under the FLSA, employees can be exempt from overtime pay if they earn at least $684 per week ($35,568 per annum) and fall into the exempted categories based on job duties.
Non-exempt salaried employees must receive overtime pay at 1.5 times their regular rate of pay for each overtime hour worked.
For salaried employees, their regular rate of pay is calculated by dividing the salary by the number of hours it covers. If an employee receives a $450 salary for a 40-hour week, their regular rate of pay will be: $450 / 40 = $11.25 per hour
Overtime rate: 1.5 x $11.25 = $16.87 per hour
Overtime Pay for Commissioned Employees in Texas
Texas overtime laws state that employees who receive commission are also entitled to overtime pay just as any other non-exempt employee would be. Commissions must be included when calculating an employee’s wage. However, they will only be given half of that rate for every overtime hour.
For example, let’s say an employee works 45 hours a week at a rate of $10/hour and receives $100 in commissions for that week. We need to first calculate the new regular hourly rate.
To do so:
(Total hours x Hourly Rate) + Commission
= (45 x 10) + 100
= $550
Then, divide that by the total hours worked in the week.
= 550 / 45
=$12.22
To determine the overtime rate for the commissioned employees, we need to take that new regular hourly rate and halve it.
$12.22 / 2
= $6.11
Since the employee worked an extra 5 hours in the week, that makes his overtime compensation $30.56 ($6.11 x 5 hours).
The amount will vary according to your hours worked, hourly rate, and commission earned.
Overtime Exceptions and Exemptions in Texas
Texas overtime laws exempt certain employees from overtime pay. These include white-collar salaried employees earning more than $684 per week (or $35,568 annually) under federal law. The following occupations are also not eligible for overtime pay under Texas laws:
- Piece-rate pay employees with certain criteria
- Retail or service establishment employees with commission earnings
- Local electric railway, trolley, or bus carrier employees
- Public agency employees working under comp time agreements
- Outside buyers of poultry, eggs, cream, or milk in their natural state
- Seamen on any vessel
- Agricultural employees
- Employees who process maple into non-refined sugar or syrup
- Certain employees in federally authorized motor carrier businesses
- Employees of certain rail and air carriers
- Local delivery drivers receiving wages based on delivery basis
- House workers living in the residence of their employer
- Lumbering or forestry workers (with certain conditions)
- Employees whose wages are set by the Secretary of Labor
- Employees involved in cotton processing (with certain exceptions)
- Taxicab company drivers
- Motion picture theater employees
Penalties for Unpaid Overtime in Texas
Under the federal law, which applies in Texas, employers who do not provide proper payment for an employee’s overtime hours can be liable for up to 2 times the amount of unpaid overtime compensation and also the cost of filing a lawsuit against the employer (including the fee to hire an attorney).
It is advisable to consult with an attorney regarding overtime violations, as penalties may vary based on the severity of the case.
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.
