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Texas employers: Know your overtime responsibilities

Here at Mills Shirley LLP, we advise employers that run businesses of all sizes and types about their legal responsibilities to comply with federal and state overtime laws. An employer must make a careful decision about whether a worker is exempt, nonexempt or an independent contractor. Second, if the worker is nonexempt, careful recordkeeping of hours worked must be made to ensure that he or she is correctly paid overtime as required by law. 

Exempt or nonexempt? 

Broadly, a nonexempt employee is one who must be paid time-and-a-half for hours worked over 40 in a workweek. Nonexempt workers are usually paid by the hour. Exempt employees are exempt from overtime requirements. They are salaried and perform high-level duties, usually falling into executive, professional or administrative categories. 

An independent contractor is someone who contracts to provide services, rather than being directly hired. If an employer engages an independent contractor, it does not have to comply with payroll deduction, FLSA overtime and other wage-and-hour requirements. 

Seek legal guidance 

Getting sound legal advice about overtime law compliance will get a new business off the ground smoothly by meeting these legal obligations correctly from the beginning. This will help avoid future lawsuits or government investigations into worker allegations of overtime violations. 

Of course, we also represent employers who find themselves faced with overtime investigation or litigation. Such matters may be resolved through negotiation or mediation, but we also vigorously defend employers in government inquiries and in court when necessary. 

Overtime litigation in Texas 

Recent examples of Texas overtime suits include: 

  • Last month, a man sued a drilling company in federal court in Houston, alleging that the company violated the federal Fair Labor Standards Act or FLSA by improperly classifying him as an independent contractor, instead of paying him for overtime for hours worked over 40 in a week.
  • A store manager from Richardson filed a FLSA suit against his employer alleging he should have been paid overtime for hours worked over 40 in applicable workweeks over a six-year period. He also alleges that the employer kept inaccurate records. 

It is not yet clear how these suits will be resolved. In the meantime, any Texas employer with questions about overtime matters or who is faced with investigation or litigation over such issues should seek advice from an experienced attorney. 

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Established in the 1840s when Galveston was the largest city in the state, Mills Shirley LLP has always been an integral part of Texas history and the Gulf Coast community.
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Mills Shirley LLP

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Phone: 409-761-1498
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