Many full-time employees work for 40 hours a week. Any time they work beyond the normal work schedule is a sacrifice to an employee’s free time—time spent relaxing with their families, enjoying hobbies, or simply decompressing from their job.
When an employee works beyond 40 hours (or, in some cases, beyond an eight-hour workday), they may be entitled to overtime pay. Though overtime policies are subject to federal law, states can apply additional regulations and restrictions—and Texas is no different.
Let’s look at Texas overtime laws, how they work, and who is eligible—and exempt—from overtime in the Lone Star State.
What Are Texas Overtime Laws?
In Texas, employees are owed overtime of 1.5 times their regular pay for any hours they work over 40 in a workweek, if they are considered non-exempt. So who is that, exactly?
Non-exempt workers:
- Earn less than $684 per week or $35,568 per year
- Don’t have a primary job duty as a company executive, administrator, professional with advanced knowledge, skilled computer employee, or outside salesperson
This means that employees who earn more than $35,568 per year are still entitled to overtime if they don’t pass the duties test (though highly compensated salaried employees who earn more than $107,432 are almost always exempt).
Here’s a breakdown of who is owed overtime in Texas:
Federal and Texas labor and employment laws also exempt certain jobs from being eligible for overtime, including farmworkers, railroad employees, and teachers.
This is all part of the Fair Labor Standards Act (FLSA), which stipulates how and when employees qualify for overtime pay (which is also called time and a half), including who is exempt from the law and how much eligible employees should be paid.
Bonus tip: Hourly can handle overtime calculations (and others!) for you, simplifying and speeding up your payroll process—all while ensuring it’s accurate for both you and your employees.
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What’s the Bare Minimum for Overtime Pay in Texas?
Texas minimum wage is $7.25 an hour (which is the same as the federal minimum wage), which means overtime pay must be $10.88 or higher.
And even though tipped employees are paid a minimum wage of $2.13 in Texas, employers are not allowed to take a higher tip credit for overtime pay.
This means employers must take a tip credit of $5.12 per hour and pay tipped employees a minimum of $5.76 per hour for any overtime work.
Is Mandatory Overtime Allowed?
Employers in Texas are allowed to require mandatory overtime as long as employees are paid an overtime pay rate of time and a half for any hours of work beyond 40.
Employees can refuse to work mandatory time and a half, though employers are allowed to discipline them for refusing overtime—up to and including termination.
One exception? Nurses are exempt from mandatory time and a half (though they can agree to work overtime) except in disaster or emergency situations or when the nurse is actively participating in a medical procedure or surgery.
Do Employees in Texas Earn Overtime for Working on a Holiday or Weekend?
Employers in Texas aren’t required to pay overtime on holidays—unless the employee actually works more than 40 hours in a workweek.
For example, if a plumber services customers on Thanksgiving, and that ends up putting their hours over 40 for the week, then they would certainly earn overtime.
Keep in mind that if your company policy or employment contracts specify that employees earn a different rate of pay for any hours worked on a holiday or weekend, you’ll also need to include the differential in your overtime pay calculations.
Can Employees Get PTO Instead of Overtime?
In Texas, only government employees can earn PTO instead of overtime.
This is known as compensatory time and is accrued at a rate of 1.5 hours for every hour worked—up to a maximum of 240 overtime credit hours (or 480 for eligible employees engaged in public safety, emergency response, or seasonal activities).
Private and non-government employers must pay overtime and cannot give comp time in lieu of overtime pay.
How Does Texas Overtime Work?
The U.S. Department of Labor requires that a workweek is made up of seven consecutive days of 24 hours each (totaling 168 hours), with each workweek starting on the same day throughout a calendar year.
This means that any non-exempt worker who works for more than 40 hours in a workweek qualifies for overtime.
On payday, eligible employees must receive their regular rate of pay for their total hours worked, up to a maximum of 40.
They would also receive one-and-a-half times their pay for any hours worked in excess of 40—their overtime pay.
But how do you calculate overtime pay?
How to Calculate Overtime for Hourly Employees
First, you need to determine the employee’s:
- Regular rate of pay: The employee’s hourly rate of pay
- Straight time: The number of hours an employee worked in a given week, up to a maximum of 40 hours
- Overtime: The number of hours an employee worked past 40 hours in a given week
The formula for calculating an hourly employee’s overtime is:
Overtime Pay = (Regular Rate x 1.5) x Overtime Hours
For example, let’s say an apprentice plumber at your company earns $25 an hour and works a 50-hour week. To calculate their overtime pay, plug these numbers into the formula above:
- Regular pay: $25
- Overtime pay rate: 1.5x
- Overtime hours: 1
Adding that all up…
Overtime Pay = ($25 x 1.5) x 10
= $375
That means the plumber earned an extra $375 in overtime. Just add that to their weekly pay, and you'll get their total compensation. In this case, it would be $375 + ($25 x 40) = $1,375.
How to Calculate Overtime for Salaried Employees
Salaried non-exempt employees may or may not work 40 hours a week, though federal regulations require them to be paid overtime for any hours worked in excess of 40.
So, to calculate the overtime pay for a master electrician who earns a salary of $75,000 per year, works 40 hours a week, and works five hours of overtime (for a total of 45 hours worked), you would need to:
1. Calculate their weekly salary:
Weekly Salary = Annual Salary / 52 Weeks
= $75,000 / 52
= $1,442 per week
2. Calculate the employee’s hourly pay:
Hourly Rate = Weekly Salary / Hours the Salary Intends to Compensate
= $1,442 / 40
= $36 an hour
3. Calculate their overtime rate:
Overtime Rate = Hourly Rate x 1.5
= $36 x 1.5
= $54
4. Calculate their overtime earnings:
Overtime Earnings = Overtime Rate x Overtime Hours Worked (After 40)
= $54 x 5
= $270
6. Add up both results:
Total Compensation = Weekly Pay for First 40 Hours + Overtime Earnings
= $1,442 + $270
= $1,712
This means the master electrician would earn a total of $1,712 after working a 45-hour week.
Frequently Asked Questions
Does an employer have to pay overtime after 40 hours in Texas?
Federal and state laws require employers to pay overtime to eligible employees after 40 hours. There is no limit to how many hours of overtime an employee can work in a day or week.
Is over 8 hours a day overtime in Texas?
No. Working beyond eight hours a day in Texas does not qualify an employee for overtime pay unless and until they’ve worked for more than 40 hours in a given week.
What is the new overtime law for Texas?
In 2019, the Department of Labor increased the salary to qualify for overtime pay to anything less than $684 per week. The rule went into effect on January 1, 2020. Among other changes, this increased the number of U.S. workers—including those in Texas—who qualified for overtime pay.
In August 2022, Robert Mayfield, a fast-food chain operator from Austin, Texas, sued the DOL. Mayfield argued that the DOL doesn’t have the authority to change the FLSA. He also argued that employees who meet the job duties part of the FLSA get an overtime exemption, no matter how much they’re paid.
The government disagreed with Mayfield’s argument, which means—at least for the time being—that employers must continue to pay overtime for any employees with non-exempt FLSA status.
The DOL has also proposed additional changes to the FLSA to better protect low-paid salaried workers, further increasing eligibility for overtime pay.
Comply With Texas Overtime Laws to Protect Your Employees—and Your Business
Labor laws are in place to make sure companies pay their employees properly—for every hour worked.
By familiarizing yourself with overtime laws in Texas, you can ensure your hard-working team members are compensated correctly and taken care of.
So now that you know everything there is to know about overtime pay in the Lone Star State, all that’s left to do? Start using payroll software and let it crunch the numbers for you!
