Texas Overtime Laws: What Every Employer Needs to Know
Texas has a well-earned reputation as a business-friendly state with minimal regulatory burden. But when it comes to overtime law, that hands-off approach cuts both ways. Texas does not have its own overtime protections that exceed federal standards, which means federal law governs entirely and federal enforcement is the mechanism. The Department of Labor investigates Texas overtime violations just as aggressively as anywhere else, and back pay claims can reach years of unpaid wages plus penalties that double what is owed.
This guide covers Texas overtime laws: the core rules, who qualifies and who does not, the Texas Payday Law and how it interacts with overtime, the industries in Texas where violations are most common, and what a time tracking system needs to do to keep you compliant without adding work to every payroll cycle.
Important: This article is for informational purposes only and does not constitute legal advice. For guidance specific to your business, consult an employment attorney licensed in Texas.
Texas Overtime Law: The Core Rule
Texas does not have a state overtime law. Texas employers follow the federal Fair Labor Standards Act (FLSA), which requires non-exempt employees to receive 1.5 times their regular rate of pay for every hour worked over 40 in a workweek.
- Overtime threshold: 40 hours per workweek
- Overtime rate: 1.5 times the regular rate of pay
- Applies to: non-exempt employees only
- Calculated: weekly, not daily
- Texas minimum wage: $7.25 per hour (matches federal)
No Daily Overtime in Texas
Texas has no daily overtime requirement. An employee who works a 14-hour shift on a Monday job site but wraps up the week at 38 total hours owes no overtime. The only threshold that triggers the 1.5x rate is 40 hours in the workweek.
This is a meaningful distinction for industries like oil and gas, construction, and trucking, where long single-day shifts are common. Workers who routinely pull 10 or 12-hour days but rotate days off do not necessarily accumulate overtime. The weekly total is what matters.
Texas Minimum Wage and Overtime
Texas follows the federal minimum wage of $7.25 per hour. Texas has no state minimum wage law that exceeds the federal rate, making it one of a minority of states that has not increased its minimum wage above the federal floor.
For overtime purposes, the minimum overtime rate for a Texas worker earning minimum wage is $10.88 per hour ($7.25 x 1.5). While this is low by national standards, the more important calculation issue for most Texas employers is ensuring that all forms of compensation are included in the regular rate before the overtime rate is applied.
The Texas Payday Law
While Texas does not have its own overtime law, it does have the Texas Payday Law, administered by the Texas Workforce Commission (TWC). The Payday Law governs when and how employees must be paid. It requires employers to establish regular paydays and pay all wages owed on those dates.
The Texas Payday Law creates an additional enforcement pathway for overtime violations. An employee who believes they are owed unpaid overtime can file a wage claim with the TWC in addition to, or instead of, filing an FLSA complaint with the Department of Labor. TWC wage claims must be filed within 180 days of the date the wages were due.
Dual exposure: A Texas employer who fails to pay overtime can face claims under both the FLSA (which allows back pay plus liquidated damages equal to the unpaid amount) and the Texas Payday Law simultaneously. This is not a situation where one claim blocks the other.
Who Is Exempt from Overtime in Texas
The same federal exemptions that apply nationally apply in Texas. The most important are the white collar exemptions for executive, administrative, and professional employees.
The Salary and Duties Tests
To qualify for any white collar exemption, employees must meet both requirements:
Salary test: The employee must earn at least $684 per week ($35,568 per year) on a salary basis. The salary must be a predetermined fixed amount that does not vary based on hours worked.
Duties tests:
- Executive: Primary duty is managing the business or a recognized department, regularly directing two or more employees, with authority to hire, fire, or meaningfully influence personnel decisions
- Administrative: Primary duty is office or non-manual work related to management or general business operations, exercising discretion and independent judgment on significant matters
- Professional: Primary duty requires advanced knowledge in a specialized field of learning, or work that is predominantly creative and intellectual in nature
Texas classification mistakes to watch for: Calling someone a "supervisor" without real supervisory authority does not create the executive exemption. Giving a clerical employee an "administrative coordinator" title without actual decision-making authority does not create the administrative exemption. The duties the person actually performs - not the title - determine the classification.
Other Common Texas Exemptions
| Exemption | Basic Requirement |
|---|---|
| Outside sales | Primary duty is making sales away from employer's place of business |
| Computer professional | Highly skilled technology work, earning at least $684/week or $27.63/hour |
| Highly compensated | Total annual compensation of at least $107,432, performs at least one white collar duty |
| Agricultural workers | Specific exemptions for farming and ranching operations |
| Oil and gas (certain) | Some highly paid field workers may qualify under specific conditions |
How to Calculate Texas Overtime
For a standard hourly employee:
Example: A Texas construction worker earns $22 per hour and works 52 hours in a week.
- Regular pay: 40 hours x $22 = $880
- Overtime rate: $22 x 1.5 = $33
- Overtime pay: 12 hours x $33 = $396
- Total: $1,276
Bonuses and the Regular Rate
Non-discretionary bonuses must be included in the regular rate before overtime is calculated. This is one of the most commonly overlooked overtime obligations in Texas. If a production bonus, attendance bonus, or shift differential is paid in the same week as overtime hours, the bonus must be factored into the regular rate calculation. Calculating overtime on the base hourly rate alone and ignoring bonuses systematically underpays overtime.
Texas Industries Where Overtime Violations Are Most Common
Oil and Gas
The oil and gas industry employs a large portion of Texas's workforce and has a history of overtime disputes. Field workers, roughnecks, and equipment operators often work extended hours on rotating schedules. The industry has faced significant Department of Labor enforcement actions for misclassifying workers as exempt, failing to include all compensation in the regular rate, and using day-rate pay structures that improperly calculate overtime.
Day-rate workers are not automatically exempt from overtime. A worker paid a flat daily rate who works more than 40 hours in a week is still owed overtime calculated on the regular rate derived from the day rate and total hours worked that week.
Construction and Contracting
Texas's construction industry spans some of the largest metro areas in the country. Crew-based work across multiple job sites, irregular hours based on project phases, and the use of both employees and contractors create significant classification and calculation complexity. Pre-shift tool preparation, post-shift cleanup, and travel between job sites during the day may all be compensable time that employers are not counting.
Restaurant and Hospitality
Texas's restaurant industry employs hundreds of thousands of tipped workers. Tipped employees must still receive overtime, and the calculation must be based on the full minimum wage rate, not just the tipped base rate. Employers who calculate overtime on the tipped cash wage rather than the full $7.25 minimum wage rate are in violation.
Healthcare
Texas has a large and growing healthcare workforce. Hospitals and healthcare facilities have access to the 8 and 80 overtime rule as an alternative to the standard weekly calculation for employees on fixed work period schedules. This allows overtime to be calculated over a 14-day period rather than weekly. However, the specific requirements for this alternative must be met and properly documented.
Common Texas Overtime Mistakes
Misclassifying Day-Rate and Piece-Rate Workers
Paying employees a flat daily rate or per-unit rate does not exempt them from overtime. These workers are still entitled to overtime for hours over 40. The regular rate is derived by dividing total earnings by total hours worked, and overtime is then calculated at 0.5 times that rate for each overtime hour.
Not Counting Travel Between Job Sites
For Texas workers who travel between multiple job sites during the workday, that travel time is compensable. Only the commute from home to the first site and from the last site to home is not compensable. A worker who drives from one construction site to another in the middle of the day is working during that travel.
Averaging Hours Across Pay Periods
Texas employers on biweekly or semimonthly payroll cycles sometimes average hours across the pay period. This is not permitted. Each workweek stands alone for overtime purposes. An employee who works 50 hours one week and 30 the next is owed overtime for the first week regardless of the 80-hour biweekly total.
How Updoot Helps Texas Employers Stay Compliant
Updoot handles the time tracking mechanics that create the most compliance risk for Texas employers.
Automatic Overtime Calculation Every Workweek
Overtime is calculated automatically as employees accumulate hours. The system flags every hour over 40 at the correct 1.5x rate with no manual arithmetic required. Each workweek is calculated independently so there is no risk of improper averaging across pay periods.
Overtime Alerts Before Hours Lock In
Managers receive alerts when employees are approaching the 40-hour threshold mid-week. For Texas employers with field workers, crews, or shift-based operations, this visibility allows proactive schedule adjustments before overtime accumulates rather than discovering it at payroll time.
GPS-Verified Punches for Multi-Site Operations
For Texas businesses with crews working across multiple job sites, GPS verification at every clock-in confirms location and exact start time. Pre-shift and post-shift work is captured at the actual punch time, not the scheduled time. This is the documentation standard that holds up in both a TWC wage claim and a Department of Labor investigation.
Project-Level Time Allocation
Employees select the job or project they are working on at clock-in. Hours are automatically allocated to the correct job for both labor cost tracking and client billing purposes. For Texas contractors and service businesses, this creates the project-level time records needed to bill clients accurately and defend those invoices.
Payroll Reports with Regular and Overtime Hours Separated
At the close of each pay period, Updoot generates a payroll report with regular and overtime hours already broken out by employee and by workweek. The data goes directly to payroll processing without manual separation. This eliminates the step where overtime calculation errors most frequently occur in Texas businesses.
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