Labor law for salary employees

Labor law for salary employees can be confusing. Many employers know this and exploit their salaried employees to work unpaid overtime.

Full-time workers in America typically work 40 hours per week. Many workers are paid overtime if they work more than 40 hours per week, but there are exceptions. Depending on the size of the company you work for, where you live, and whether or not you are salaried, you might be eligible for overtime.

Is your full time job beginning to eat up all of your free time? Perhaps you begin to work after hours and on weekends. You might be curious how much money you actually make per hour. How much would you be making if you were actually paid for all of your overtime? It is important to know your hourly rate to ensure your employer is treating you fairly. Just because your employer says you are exempt, does not mean you necessarily are. 

Exempt vs. Nonexempt employees

According to the Fair Labor Standards Act (FLSA), there are two types of employees: exempt and nonexempt. Nonexempt employees need to record their hours each week. They receive overtime pay in an amount of 1.5 times their regular rate of pay if they work over 40 hours per week.  Note: most nonexempt employees are paid by the hour. However, some are paid a salary, or by other methods such as piece rates, commissions, or a combination of methods. Just because you receive a salary does not mean you are an exempt employee. 

Employees must make $35,568 or more per year to be classified as exempt by the FLSA. If you make less than that annually, you are eligible for overtime pay.  Exempt employees are not paid overtime wages if they work more than 40 hours per week.  

If you’ve calculated your rate of pay, and something doesn’t add up, you might want to speak to a Texas overtime attorney. They can help you determine if you have been misclassified or if your employer is illegally depriving you of overtime pay. 

Can salaried employees accept tips?

The FLSA does not address exempt employees receiving tips. Generally, salaried employees do not receive tips. 

A tipped employee is someone who “customarily and regularly” receives tips every month in excess of $30. Usually this only applies to those in the hospitality industry. The question comes in when managers or other “back of house” staff want to share the tip pool. Usually these types of workers are paid salaries or at least full minimum wage.

Back-of-house employees may only receive part of a tip pool if the waitstaff is paid full minimum wage without taking tip credits. 

As a general rule, public employees may never accept tips. This includes postal workers, law enforcement personnel, and teachers.

Labor law for salary employees in Texas

For salaried employees in Texas, one of the most important things to keep in mind is employers cannot make deductions from pay when work is not available if “the employee is ready, willing, and able to work.” Salaried employees must make at least the federal minimum wage.

Pay docking for salaried workers

There are only certain circumstances in which an employer can dock your pay if you are exempt. It is against the law for your employer to dock your pay because of the “quality or quantity” of the work. 

The FLSA allows employers to dock exempt employees’ pay under specific conditions, such as:

  • When the employee is absent for one or more full days due to personal reasons
  • Offsetting the amount the employee receives in compensation from jury service, witness fees, or for military pay
  • Penalizing the employee for significant safety rule violations
  • Unpaid leave under the Family and Medical Leave Act (FMLA)
  • During the first or last week of employment in the event a worker does not work for a full week
  • Unpaid disciplinary suspension for one or more full days imposed in good faith due to violations of workplace conduct regulations
  • When the employee is absent for one or more days for sickness or disability. This is only if the employer has a plan that compensates employees for lost salary.

Note: in most cases, if you are available, willing, and ready to work, your employer may not dock your pay if you are exempt. The only exception to this is if there is no work available for an entire workweek.

COVID-19 and labor law for salary employees

Paid sick leave for COVID-19

In 2020, congress passed the Families First Coronavirus Response Act (FFCRA). This bill required certain employers to provide paid sick leave or expanded family and medical leave for COVID-19 related issues.  It expired on December 31, 2020. However, there are still modest regulations for paid sick leave that will continue through March 31, 2021 under the “Consolidated Appropriations Act, 2021,” also known as the Relief Bill.

The Relief Bill allows payroll tax credits to employers who provide employees with paid sick leave. One objective of this is to allow employers to recover the costs of providing FFCRA leave in 2020. It allows the same for employees who need to take sick leave in Q1 of 2021. 

Still, these laws only cover a fraction of employees in Texas. It applies to companies with between 51 and 499 employees. Additionally, you must have been employed for at least 30 days in order to qualify for this benefit. 

Pay docking due to COVID-19

The FMLA protects exempt employees who need to stay home to take care of themselves or close family members. Staying home to avoid COVID-19 is not protected by FMLA. Staying home to care for children engaged in virtual learning is not protected by FMLA.

During a pandemic, employers must pay exempt employees for the entire workweek if the employee works part of the week. If an employee is “ready, willing, and able to work,” the employer cannot dock pay if the office is closed. However, if the exempt employee is temporarily relieved of their work because of the pandemic, employers are not obligated to pay them for that workweek. 

Employers can legally require the employee to use accrued and unused leave benefits. If the employee does not have any accrued and unused paid time off (PTO), the employer must pay the employee a full week’s salary. 

Unpaid Overtime Attorney Texas

David Langenfeld of Leichter Law Firm is a certified specialist in Employment law. He represents workers all over Texas facing unfair treatment from their employers. Contact the Leichter Law Firm today for a free case evaluation.

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