Overtime and Minimum Wage laws

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Don’t Let Your Employer Take Advantage of You – Know Your Rights

Far too many workers are over worked and under paid. Many people work hundreds of hours of overtime a year without being paid fairly for that hard work. If you believe you are not being paid all wages you are owed, find out your rights. This page explains some of your basic rights under the federal wage protection law known as the Fair Labor Standards Act (FLSA). 

What is the FLSA?

The FLSA is a federal law that requires most employers to pay their employees overtime wages and minimum wages. 

The FLSA requires non-exempt employees to be paid time and one-half their regular rate of pay for each hour worked over 40 hours in a seven-day workweek.  Even employees who are salaried, commissioned, paid a day rate, or paid on a piece-rate basis (such as pay per item completed or pay per square foot) can be entitled to overtime pay.  So, it is not just hourly employees who can get overtime pay.

The FLSA also requires non-exempt employees to be paid an hourly minimum wage of $7.25.

I Am Supposedly an Independent Contractor - Am I Still Covered by the FLSA Overtime and Minimum Wage Laws?

The FLSA provides that only employees are entitled to overtime pay and minimum wage protections. However, employee status cannot be waived. So, even if there is a contract the worker signs stating that he/she is an independent contractor, that cannot necessarily defeat FLSA employee status and the right to overtime and minimum wages. If the facts show that you are really an employee as opposed to an independent contractor, then you may be protected by the FLSA's overtime and minimum wage laws.

Courts have created the economic realities test to determine if a worker is really an employee entitled to FLSA protections as opposed to an alleged independent contractor who is not. Generally, courts look at the following factors to determine if a worker is an employee instead of an independent contractor. 

• (1) the degree of control exercised by the alleged employer, 
• (2) the extent of the relative investments of the worker and the alleged employer, 
• (3) the degree to which the worker's opportunity for profit or loss is determined by the alleged employer, 
• (4) the skill and initiative required in performing the job, and 
• (5) the permanency of the relationship. 

However, all of those elements do not have to be in your favor for a Court to find that you are really an employee under the FLSA. Please contact the Vaught Firm for more information.

What About Travel Pay?

Whether travel time must treated as paid time under the FLSA overtime and minimum wage laws depends on the specific situation for non-exempt employees.  If your employer is not accurately treating certain travel time as paid time, that may result in you being underpaid the FLSA overtime or minimum wages owed.

• Generally, travel from home to work and work back to home is not considered paid time under the FLSA.  This is also typically the case even if you are driving from home to a customer's location to begin your work (except for travel that requires an overnight stay away from home that is discussed below).

• However, if you perform work that is integral and indispensable to your primary job duties before leaving home or while traveling from home to the first worksite, your paid workday might begin at that time and continue until the completion of your workday (other than meal breaks of at least 30 minutes in length in which you are relieved from all work). Under the FLSA’s Continuous Workday Rule, periods of time between the commencement of the employee's first principal activity and the completion of his/her last principal activity on any workday must be included in the computation of hours worked. 

• Travel during the workday from one jobsite to another jobsite is generally considered paid time under the FLSA. For example, after you arrive to your office, shop, or first work location, all time spent traveling between that location and other locations during the workday, other than your travel back home at the end of the workday, is generally considered paid time under the FLSA. 

• If your travel  for work requires an overnight stay away from your home, that travel time from home and back may be considered paid time under the FLSA if the travel: (1) cuts into the employee's normal workday, or (2) occurs on what would otherwise be a day off but happens during hours that would be normal working hours if it were a workday. This may sound complicated, so here are some examples.

•  Assume your normal work schedule is Monday to Friday from 9 a.m. to 6 p.m. If you leave your home at 7 a.m. on a Monday to travel to a work location which requires you to stay overnight at a hotel, and do not arrive there until 11 a.m., then the travel time between 7 a.m. and 11 a.m. is generally considered paid time under the FLSA in addition to any other work performed that day after you arrive at the location.

• Assume your normal work schedule is Monday to Friday from 9 a.m. to 6 p.m. and you leave your home at 9 a.m. on a Sunday to travel away from home to a work location which requires you to stay overnight. You to drive from 9 a.m. to 4 p.m. that Sunday to get to the location. That Sunday travel time is generally considered paid time under the FLSA.

Exemptions from FLSA Overtime and Minimum Wage Laws

Non-exempt employees are entitled to overtime and minimum wages under the FLSA whereas exempt employees are not. There are too many factors for FLSA exemptions to cover them here. Please contact the Vaught Firm for a no cost initial consultation to learn more about your FLSA exemption status. 

However, it is important to know that the employer has to prove that the employee is exempt (not entitled to overtime wages or minimum wages) under an exemption as opposed to the employee having to prove he or she is non-exempt (entitled to overtime wages and minimum wages).

In evaluating your exemption status, please know that job titles are not controlling.  The exemption status of any particular employee must generally be determined on the basis of whether the employee's salary and duties meet the elements of a particular FLSA exemption. 

How is FLSA Overtime Pay Calculated?

A non-exempt employee must be paid time and one half their "regular rate" of pay for each hour worked over 40 per seven day workweek.  But the regular rate of pay is not necessarily the same thing as “hourly pay.” Employees who are paid a salary, day rate, commission, or on a piece rate basis may still be entitled to overtime pay like employees who are paid on an hourly basis. So, the FLSA provides for those types of pay to be converted into an "hourly" number to determine time and one-half overtime pay. 

An employee’s “regular rate" of pay generally includes all money an employee receives for that workweek. In other words, there are other forms of compensation that also have to be added to the base pay calculation in order to get the hourly time and one-half number. Here are a few examples.

• Bonuses – If you receive a bonus tied to achieving a certain result or working certain hours, that bonus should generally be included in your regular rate overtime pay calculation.
• Commissions - commission pay should  generally also be included in calculating the regular rate of pay in determining the overtime wages owed.
• Shift Differentials – There are some jobs that provide extra compensation to workers who perform certain activities, such as additional pay for working different shifts or weekends.  That compensation must generally be included when calculating the regular rate overtime pay calculation.
• Longevity pay – You may work at a job that offers additional pay to employees who reach a certain longevity milestone, such as five, 10, 20 or 30 years. Longevity pay generally is also included in regular rate overtime pay calculations.

So, if your employer is not including certain additional pay (such as bonus pay) along with your base pay in calculating your overtime hourly rate, that employer may be underpaying you the overtime wages you are owed. 

Can the Employer Deduct Money from My Wages or Not Reimburse My Work Expenses?

The FLSA generally requires wage payments to employees to be “free and clear.” Whether in cash or in facilities, wages cannot be considered to have been paid by the employer and received by the employee unless they are paid finally and unconditionally or free and clear. 

• For example, if it is a requirement of the employer that the employee must provide tools of the trade which will be used in or are specifically required for the performance of the employer's particular work, there would be a violation of the FLSA in any workweek when the cost of such tools purchased by the employee cuts into the minimum or overtime wages required to be paid him under the FLSA.

Furthermore, under Texas law,  an employer may not withhold or divert any part of an employee's wages unless the employer: (1) is ordered to do so by a court of competent jurisdiction; (2) is authorized to do so by state or federal law; or (3) has written authorization from the employee to deduct part of the wages for a lawful purpose. 

However, certain deductions (or withholdings)  from wages are lawful. For example, withholdings for FICA taxes (a/k/a payroll taxes) and income taxes generally do not violate the FLSA or Texas state law. 

Can My Employer Keep Some or All of My Tips?

With the exception of valid tip pooling arrangements, the general answer is that an employer may not keep an employee's tips. The FLSA was specifically amended in 2018 to protect employee tips. 

• An employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips, regardless of whether or not the employer takes a tip credit.

•  Any employer who violates the FLSA tip protection law shall be liable to the affected employee in the amount of the sum of any tip credit taken by the employer and all such tips unlawfully kept by the employer, and in an additional equal amount as liquidated damages. In other words, if your employer illegally keeps some or all of your tips, you may be owed double the amount of tips improperly kept by the employer. Also, if  your employer uses tip credit for the FLSA minimum wage law (e.g. pays you $2.13 per hour and relies on tips to make up the difference to meet the $7.25 per hour FLSA minimum wage law), they would generally have to also pay you double the amount of the tip credit taken.  

What Money Can I Recover if My Employer Violated the FLSA?

When an employer violates the FLSA, the employee or former employee may recover their unpaid overtime or minimum wages for up to the three year period before the date they file a legal claim for that money. Furthermore, employees are generally entitled to an additional amount of money that equals the amount of back overtime or minimum wages, which is known as liquidated damages. For example, an employee who is owed $5,000 in back overtime wages is generally owed and additional $5,000 for liquidated damages, or $10,000 total. 

This webpage should not be considered legal advice. Contact the Vaught Firm for a no cost initial consultation to learn more about the applicable law relative to your specific situation. The content of this page is based on federal law within the U.S. Court of Appeals for the Fifth Circuit and Texas state law.