Wage and hour laws protect employees and set clear guidelines for businesses. Failing to follow these laws can lead to fines, lawsuits, and reputational damage. Employers in Texas must understand state and federal regulations to stay compliant and avoid legal trouble.
Understand federal and state wage laws
The Fair Labor Standards Act (FLSA) sets federal minimum wage, overtime, and recordkeeping rules. Texas follows the federal minimum wage of $7.25 per hour, but local ordinances may require higher pay. Employees classified as non-exempt must receive overtime pay at 1.5 times their regular rate for hours worked over 40 in a workweek.
Certain salaried employees qualify as exempt from overtime, but misclassification can lead to penalties
Accurately track employee work hours
Employers must keep precise records of employee hours, wages, and job classifications. Time-tracking systems help maintain compliance by ensuring employees receive proper pay.
Rounding errors, automatic deductions for breaks, or off-the-clock work can result in wage disputes. Businesses should establish clear policies for clocking in and out and ensure managers follow them consistently.
Avoid misclassifying employees
Some businesses classify workers as independent contractors to avoid paying benefits and overtime. However, misclassifying employees can lead to back wages and penalties. Texas courts consider factors such as control over work and independence when determining worker status.
Employers should review job roles carefully and consult state and federal guidelines to ensure proper classification.
Stay updated on changing labor laws
Wage laws evolve, and employers must stay informed about new regulations. Texas businesses should monitor updates from the Texas Workforce Commission and the U.S. Department of Labor. Regular training for HR teams and supervisors can help ensure ongoing compliance with wage and hour laws.
Employers who proactively address wage compliance reduce legal risks and foster a fair workplace.