🇺🇸 Texas Overtime Laws — 2026 UPDATE

Overtime Laws in Texas 2026: Pay Rates, Exemptions & Tax Deduction (2026)

⚠️Informational only — not legal or tax advice.

This guide explains Texas overtime laws 2026

Last verified: February 25, 2026

Next scheduled review: May 25, 2026

overtime in Texas 2026

Table of Contents

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Texas Overtime Laws at a Glance (2026)

Details
Overtime threshold 40 hours per workweek
Overtime pay rate 1.5× regular rate of pay
Double time No — not required under Texas or federal law
7th consecutive day rule No
State minimum wage (2026) $7.25/hour (same as federal)
Exempt salary threshold (2026) Federal: $684/week ($35,568/year)
Daily overtime No — weekly calculation only
State enforcement agency Texas Workforce Commission (TWC) — Wage and Hour Department
Federal enforcement U.S. DOL Wage and Hour Division
Overtime tax deduction (federal) Up to $12,500/year (2025–2028) — FLSA-covered workers
Statute of limitations 180 days (TWC/Texas Payday Law) / 2 years FLSA (3 if willful)

Governing law: Fair Labor Standards Act, 29 U.S.C. § 207; Texas Labor Code, Chapter 61 (Texas Payday Law); Tex. Gov’t Code § 659.015 (state employees)
Last verified: February 25, 2026

Does Texas Have Its Own Overtime Law?

Texas does not have a separate state overtime statute for private-sector employees. Overtime in Texas is governed by the federal Fair Labor Standards Act (FLSA), 29 U.S.C. § 207.

Under the FLSA, nonexempt employees must receive overtime pay at 1.5 times their regular rate of pay for all hours worked over 40 in a workweek. Texas does not impose additional or higher overtime protections on private employers beyond the federal standard.

What Texas law does cover:

The Texas Payday Law (Texas Labor Code, Chapter 61) addresses how and when wages must be paid — including the timing of overtime wages — but it does not create its own overtime entitlement or expand FLSA coverage. Key Payday Law provisions that interact with overtime:

  • Private-sector employees covered by the FLSA must be paid at least twice per month (Tex. Labor Code § 61.011).
  • Employers may not withhold earned wages, including overtime, except as permitted by law.
  • Employees can file a wage claim with the TWC for unpaid overtime, but only within 180 days of when the wages were due. For overtime claims beyond that window, the FLSA provides a longer 2-year (or 3-year willful) statute of limitations and should be pursued through the U.S. DOL or federal court.

State employees — Tex. Gov’t Code § 659.015:

Texas state government employees who are subject to FLSA overtime provisions are covered by a specific state statute (Tex. Gov’t Code § 659.015). Under this provision, a state employee who works more than 40 hours in a workweek is entitled to compensation for the excess hours either by:

  • Compensatory time off at 1.5 hours for each overtime hour worked, or
  • Overtime pay at 1.5 times the regular rate of pay, depending on agency policy.

Where Tex. Gov’t Code § 659.015 and the FLSA prescribe different rules, federal law controls.

Federal statute: Fair Labor Standards Act, 29 U.S.C. § 207 — dol.gov/agencies/whd/overtime
Texas Payday Law: Tex. Labor Code, Chapter 61 — statutes.capitol.texas.gov
State employee overtime: Tex. Gov’t Code § 659.015 — statutes.capitol.texas.gov

How Overtime Pay Is Calculated in Texas

What Is a “Workweek”?

Under the FLSA, a workweek is a fixed, regularly recurring period of 168 consecutive hours (seven consecutive 24-hour periods). A workweek does not have to start on Monday or align with a calendar week — the employer may designate any day and time as the start of the workweek.

Each workweek stands alone. An employer cannot average hours across two or more workweeks to avoid overtime. If an employee works 50 hours one week and 30 the next, overtime is owed for the first week regardless of the hours worked in the second.

Source: 29 C.F.R. § 778.104–778.105

Pay Rates

Under the FLSA, nonexempt employees in Texas earn overtime at the following rate:

Time-and-a-half (1.5× regular rate): All hours worked over 40 in a workweek.

Texas has no daily overtime requirement. Working more than 8 or 12 hours in a single day does not trigger overtime unless total weekly hours exceed 40.

Texas also has no double-time requirement. Working on weekends, holidays, or the seventh consecutive day in a workweek does not automatically trigger a higher rate — only total hours above 40 per workweek matter.

What Counts as the “Regular Rate of Pay”

The regular rate is not always the same as the base hourly wage. Under 29 C.F.R. § 778.108, the regular rate includes:

  • Base hourly rate or salary equivalent
  • Non-discretionary bonuses and incentive pay
  • Shift differentials
  • Commissions
  • Piece-rate earnings

The regular rate does not include:

  • Discretionary bonuses (e.g., holiday gifts)
  • Employer contributions to benefit plans
  • Vacation, holiday, or sick pay when no work is performed

Calculation Example

Example — Weekly overtime in Texas:

An employee earns $7.25/hour (Texas minimum wage) and works 48 hours in one workweek:

  • Regular pay: 40 hours × $7.25 = $290.00
  • Overtime pay: 8 hours × ($7.25 × 1.5) = 8 × $10.88 = $87.04
  • Total weekly gross pay: $377.04

Example — Salaried nonexempt employee in Texas:

A nonexempt employee earns a salary of $600/week and works 50 hours in a workweek:

  • Regular rate: $600 ÷ 40 hours = $15.00/hour
  • Half-time premium for overtime: 10 hours × ($15.00 × 0.5) = 10 × $7.50 = $75.00
  • Total weekly gross pay: $675.00

(Under the “fluctuating workweek” or “half-time” method permitted by 29 C.F.R. § 778.114, if certain conditions are met, only the half-time premium is owed on top of the salary. Confirm with counsel whether this method applies to your situation.)

For the current Texas minimum wage used in these calculations, see the Texas Minimum Wage page on RemoteLaws.com.

Source: 29 U.S.C. § 207; 29 C.F.R. § 778.108–778.122; U.S. DOL Wage and Hour Division — Overtime

Who Is Exempt from Overtime in Texas?

Not all employees in Texas are entitled to overtime pay. Certain employees are classified as “exempt” under the FLSA. Texas does not set its own exemption thresholds — the federal FLSA standards apply statewide.

Federal FLSA Exemption Requirements

To be exempt from overtime under the FLSA, an employee must meet all three of the following criteria:

1. Salary basis test: Paid a predetermined, fixed salary each pay period (not hourly).

2. Salary level test: Earn at least $684 per week ($35,568 per year).

3. Duties test: Perform specific job duties in one of these categories:

Exemption Key duty requirement
Executive Manages the enterprise or a department; directs 2+ employees; has authority to hire or fire
Administrative Office/non-manual work related to management or business operations; exercises independent judgment on significant matters
Professional Work requiring advanced knowledge in a field of science or learning, acquired through prolonged specialized study
Computer employee Systems analysis, programming, or software engineering — $684/week salary or $27.63/hour
Outside sales Primary duty is making sales away from the employer's place of business
Highly compensated Total annual compensation of at least $107,432; performs at least one executive, administrative, or professional duty

Source: 29 C.F.R. Part 541 — ecfr.gov

What Happened to the 2024 DOL Salary Threshold Increase?

In April 2024, the U.S. Department of Labor issued a final rule that would have raised the exempt salary threshold to $1,128 per week ($58,656/year) effective January 1, 2025.

On November 15, 2024, the U.S. District Court for the Eastern District of Texas vacated that rule nationwide in Texas v. U.S. Department of Labor (No. 4:24-cv-00499). The ruling was issued by Judge Sean Jordan in the Sherman Division.

The salary threshold remains $684/week ($35,568/year) as of 2026. This is the current operative standard for Texas employees.

Texas does not set a state exempt salary threshold. There is no higher state-level threshold — the $684/week federal figure is the only applicable standard for Texas employers.

Common Misclassification Issues in Texas

Texas has several industries — oil and gas, technology, healthcare, and construction — where misclassification is frequent. Being paid a salary, being called a “manager,” or being classified as an independent contractor does not automatically exempt a worker from overtime. The FLSA duties test and salary level test must both be satisfied.

Specific misclassification patterns common in Texas:

  • Oil and gas field workers paid on a “day rate” without overtime. Workers paid a flat daily rate are not automatically exempt. If the day rate is not a guaranteed salary that covers any 40-hour week, the exemption may not apply. Courts have frequently ordered back wages in these cases.
  • IT professionals in Austin and Dallas classified as exempt “computer employees” who do not actually meet the duties test for that exemption.
  • Salaried managers at retail or food service establishments who spend the majority of their time on non-managerial tasks.

For any questions about classification, the U.S. DOL Wage and Hour Division provides guidance at dol.gov/agencies/whd/overtime.

Source: 29 C.F.R. Part 541; Texas v. U.S. Department of Labor, No. 4:24-cv-00499 (E.D. Tex. Nov. 15, 2024)

Overtime Tax Deduction: "No Tax on Overtime" (2025–2028)

The One Big Beautiful Bill Act (Public Law 119-21), signed on July 4, 2025, created a new federal income tax deduction for qualified overtime compensation under Internal Revenue Code § 225.

This deduction is available for tax years 2025 through 2028.

Who Is Eligible

  • Nonexempt employees covered by the Fair Labor Standards Act (29 U.S.C. § 207)
  • Must have a Social Security number valid for employment
  • Cannot use the Married Filing Separately filing status

Who is NOT eligible:

  • Exempt (salaried) employees who do not receive FLSA-required overtime
  • Independent contractors (1099 workers) who are not FLSA-covered
  • Employees receiving overtime only under employer policy or collective bargaining agreements, if that overtime is not also required by the FLSA

What Is Deductible

The deduction covers the premium portion of overtime pay — specifically the amount that exceeds the regular rate of pay.

Overtime type What is deductible Example ($20/hr regular rate)
Time-and-a-half (1.5×) The "half" — 1/3 of total OT pay $10/hr per OT hour ($30 − $20)
Double time (2×) The "full extra" — 1/2 of total OT pay $20/hr per OT hour ($40 − $20)

IRS shortcut for 2025: If you know your total overtime pay and were paid time-and-a-half, divide the total overtime amount by 3 to find the deductible amount. (Source: IRS Notice 2025-69)

Deduction Limits
Filing status Maximum annual deduction Phase-out begins at MAGI
Single $12,500 $150,000
Married filing jointly $25,000 $300,000

The deduction is reduced by $100 for each $1,000 by which the taxpayer’s modified adjusted gross income (MAGI) exceeds the applicable threshold.

W-2 Reporting
Tax year Employer reporting requirement
2025 NOT required to separately report (transition year — IRS Notice 2025-62). Employers may voluntarily report in W-2 Box 14 as "QUAL OT" or provide a separate statement.
2026 and later REQUIRED to separately report qualified overtime compensation. IRS draft guidance indicates Box 12, Code TT will be used (draft form, subject to change before finalization).

If an employer did not separately report overtime for 2025, the IRS allows employees to use “any reasonable method” to calculate the deductible amount, including:

  • One-third of total overtime pay (for time-and-a-half workers)
  • Payroll records or pay stubs showing overtime hours and rates
  • Employer statements or online portal information

What This Deduction Does NOT Do

  • Does not exempt overtime from Social Security (6.2%) or Medicare (1.45%) taxes
  • Does not apply to state income taxes
  • Does not change how much overtime pay an employee receives — it reduces taxable income when filing
  • Does not apply to overtime paid solely under employer policy that exceeds FLSA requirements

Source: IRS FAQs on Qualified Overtime Compensation Deduction; IRS Notice 2025-69; IRS Notice 2025-62; IRC § 225; P.L. 119-21, § 70202; Schedule 1-A (Form 1040)
Official IRS page: irs.gov — Questions and Answers About the New Deduction for Qualified Overtime Compensation

Texas and the Overtime Tax Deduction — A Particularly Favorable Combination

Texas does not impose a state income tax. This means Texas workers benefit from both the new federal overtime deduction and the absence of any state-level income tax on wages — including overtime pay.

For most nonexempt Texas workers, overtime compensation is subject only to:

  • Federal income tax (reduced by the new deduction, up to $12,500/$25,000)
  • Social Security tax (6.2%, on wages up to $176,100 for 2025)
  • Medicare tax (1.45%, no earnings cap)

There is no Texas state income tax deduction to claim because Texas does not tax individual income at the state level.

Cross-reference: For Texas income tax information, see the Texas Income Tax page on RemoteLaws.com.

Source: Texas Constitution, Article VIII, § 1 (no state income tax); Texas Comptroller of Public Accounts — No State Income Tax

Can an Employer Require Overtime in Texas?

Under the FLSA, there is no federal limit on the number of hours an employer can require an adult employee (age 16 and older) to work in a workweek, as long as the employee is properly compensated for all overtime hours.

Texas does not have additional mandatory overtime restrictions beyond the FLSA for private-sector employees. Employers in Texas may require overtime as a condition of employment, and at-will employees who refuse may face disciplinary action, up to and including termination.

Texas is an at-will employment state. Unless an employment contract, collective bargaining agreement, or a specific law provides otherwise, either the employer or the employee can end the employment relationship at any time, for any reason — including refusal to work overtime.

Protections That Always Apply

Regardless of mandatory overtime policies, the following protections apply in Texas:

  • All overtime hours must be compensated at the applicable overtime rate (1.5× regular rate for hours over 40/week)
  • Employers cannot retaliate against employees for filing a wage complaint (29 U.S.C. § 215(a)(3))
  • Disability accommodation requests under the ADA may limit overtime requirements for employees with qualifying conditions
  • Texas and federal child labor laws restrict hours for employees under 18

Source: 29 U.S.C. § 207; 29 U.S.C. § 215(a)(3); Texas Labor Code, Chapter 51 (child labor)

Industry-Specific Overtime Rules in Texas

Texas’s economy spans several industries — energy, healthcare, technology, retail, and agriculture — each of which may have distinct overtime rules under federal law. The following covers industries where different rules actually apply.

Oil and Gas / Energy Sector

Texas has no special overtime exemption for oil and gas workers. However, certain positions in the energy industry may qualify for FLSA exemptions if the employee meets the salary basis, salary level, and duties tests (e.g., engineers classified as “learned professionals,” or field supervisors classified as “executives”).

One commonly litigated issue in Texas is the “day rate” worker — employees paid a flat amount per day regardless of hours worked. Federal courts, including those in Texas, have repeatedly held that day-rate workers may not be treated as salaried exempt employees unless the arrangement satisfies the FLSA’s salary basis test. Employers who misclassify oil field workers as independent contractors or exempt employees face significant back-wage liability.

Source: 29 C.F.R. § 541.602; U.S. DOL Wage and Hour Division — dol.gov/agencies/whd

Healthcare (8-and-80 System)

Under 29 U.S.C. § 207(j), hospitals and residential care facilities may enter into an agreement with employees to use a 14-day work period instead of the standard 7-day workweek for overtime calculation. Under this system:

  • Overtime is owed after 8 hours in a workday, or after 80 hours in the 14-day period, whichever produces more overtime pay.

This system must be established by prior agreement with the employee before the work is performed. Employers cannot apply it retroactively.

Source: 29 U.S.C. § 207(j); 29 C.F.R. § 778.601

Retail and Commission Employees

Under 29 U.S.C. § 207(i), employees of retail or service establishments may be exempt from overtime if:

  • Their regular rate of pay exceeds 1.5× the applicable minimum wage ($10.88/hour based on Texas’s $7.25/hour minimum), and
  • More than half of their total earnings in a representative period come from commissions on goods or services.

Both conditions must be met. This exemption is commonly applied in auto dealerships, furniture stores, and other retail settings in Texas.

Source: 29 U.S.C. § 207(i)

Motor Carrier / Transportation

Employees whose duties affect the safe operation of motor vehicles in interstate commerce may be exempt from FLSA overtime under the Motor Carrier Act exemption. This covers drivers, driver’s helpers, loaders, and mechanics employed by motor carriers subject to the jurisdiction of the U.S. Department of Transportation.

Note: The small vehicle exception applies to employees of motor carriers who drive vehicles with a gross vehicle weight rating (GVWR) of 10,000 pounds or less — these workers are not exempt from FLSA overtime.

Source: 29 U.S.C. § 213(b)(1); 49 U.S.C. § 31502; dol.gov/agencies/whd/flsa/motorcarrier

Public Sector / Texas Government Employees

Under 29 U.S.C. § 207(o), Texas state and local government employers may offer compensatory time off at 1.5 hours per overtime hour worked instead of overtime pay, provided:

  • A prior agreement exists between the employer and employee (or their representative)
  • The cap on accrued comp time is 240 hours (or 480 hours for public safety, emergency response, and seasonal employees)
  • Employees must be permitted to use accrued comp time within a reasonable period

Texas state agencies follow Tex. Gov’t Code § 659.015, which mirrors the FLSA comp time provisions. Where the state statute and federal law conflict, federal law controls.

Source: 29 U.S.C. § 207(o); Tex. Gov’t Code § 659.015 — statutes.capitol.texas.gov

Compensatory Time (“Comp Time”) — Private Employers

Under the FLSA, private-sector employers in Texas cannot offer comp time in lieu of overtime pay. A private employee who works more than 40 hours in a workweek must be compensated at 1.5× their regular rate in wages for the overtime hours worked. Offering future time off instead of pay is not permitted without the employee’s consent and a separate written agreement — and even then, only public employers have this right under federal law.

Source: 29 U.S.C. § 207(o)

Agriculture

Under the FLSA, most agricultural workers are exempt from overtime pay requirements. Texas, unlike California or Washington, does not have a state law extending overtime protections to agricultural workers. Farm laborers in Texas are generally not entitled to overtime pay under federal or state law.

Source: 29 U.S.C. § 213(b)(12)

How to File an Overtime Wage Complaint in Texas

Employees in Texas who believe they have not received proper overtime pay have three options:

Option 1: Texas Workforce Commission (TWC) — Wage and Hour Department

The TWC administers the Texas Payday Law (Tex. Labor Code, Chapter 61), which covers the timely payment of earned wages, including overtime. Note: the Payday Law has a strict 180-day filing deadline.

Details
Agency Texas Workforce Commission, Wage and Hour Department
Online filing apps.twc.texas.gov/WAGECLAIM/logon
Instructions twc.texas.gov — How to Submit a Wage Claim
Phone 800-832-9243 (toll-free) or 512-475-2670
TDD (hearing impaired) 800-735-2989
Mailing address TWC Wage and Hour Department,
101 E. 15th St., Rm. 514,
Austin, TX 78778-0001
Deadline 180 days from the date wages were originally due (Tex. Labor Code § 61.051(c))

Important: The TWC Payday Law covers wages that are due under an employment agreement. For overtime specifically, the FLSA provides a broader remedy with a longer deadline. If your overtime claim is outside the 180-day window, file directly with the U.S. DOL or in federal court.

Option 2: U.S. Department of Labor — Wage and Hour Division (WHD)

The WHD enforces the FLSA and covers minimum wage and overtime violations. Complaints to the WHD are confidential — the employer is not told who filed the complaint — and the WHD may investigate the employer’s entire payroll, not just the individual’s claim.

Details
Online dol.gov/agencies/whd/contact/complaints
Phone 1-866-487-9243 (toll-free)
Deadline 2 years from the date of violation (3 years if willful)

The WHD has offices in Austin, Dallas, Houston, and San Antonio that handle Texas wage and hour complaints.

Option 3: Private Lawsuit

Employees may file a lawsuit against their employer in state or federal court under 29 U.S.C. § 216(b). Under a collective action, other similarly situated employees can join the same lawsuit. Remedies available include:

  • Back wages owed (all unpaid overtime)
  • Liquidated damages equal to the unpaid wages (effectively doubles the recovery)
  • Reasonable attorney’s fees and court costs

Many Texas employment attorneys handle FLSA overtime cases on a contingency basis, meaning no upfront fees are required.

Deadline: 2 years from the date of the violation; 3 years if the violation is willful.

Retaliation Protection

Under the FLSA (29 U.S.C. § 215(a)(3)), employers cannot retaliate against employees for:

  • Filing an overtime or minimum wage complaint
  • Participating in a DOL or TWC investigation
  • Testifying in proceedings related to wage violations

Retaliation includes termination, demotion, reduction in pay, or any other adverse employment action taken because an employee exercised their rights under the FLSA or Payday Law.

Source: twc.texas.gov — Texas Payday Law; 29 U.S.C. § 216(b); 29 U.S.C. § 215(a)(3)

Penalties for Overtime Violations in Texas

Federal FLSA Penalties
Penalty type Amount
Back wages Full amount of unpaid overtime owed
Liquidated damages Equal to unpaid wages (effectively doubles the recovery for employees)
Civil monetary penalty Up to $2,451 per violation for willful or repeated violations (adjusted annually by the DOL)
Criminal prosecution Willful violations: fines up to $10,000; second offense may result in up to 6 months imprisonment

An employer can avoid liquidated damages only if it can demonstrate that it acted in good faith and had reasonable grounds to believe its conduct complied with the FLSA.

Source: 29 U.S.C. § 216

Texas Payday Law Penalties

Under the Texas Payday Law, if the TWC issues a wage claim order against an employer who fails to pay:

  • The employer may be assessed a penalty of up to $1,000 for each violation
  • An employer who files a fraudulent response to a wage claim may face additional civil and criminal penalties under Tex. Labor Code, Chapter 61

Important note: The Texas Payday Law does not provide for liquidated damages or attorney’s fees in the same way the FLSA does. Employees with significant overtime claims are typically better served pursuing remedies under the FLSA through the U.S. DOL or a private lawsuit.

Source: Tex. Labor Code § 61.101–61.108 — statutes.capitol.texas.gov

Texas Overtime Law Updates (2025–2026)

Federal Changes Affecting Texas

  • July 4, 2025: One Big Beautiful Bill Act (Public Law 119-21) signed — created a new federal income tax deduction for qualified overtime compensation (IRC § 225) for tax years 2025 through 2028. Eligible workers may deduct up to $12,500/year ($25,000 joint) of the premium portion of overtime pay from federal taxable income.
  • November 2025: IRS released Notice 2025-69 providing individual calculation guidance for the overtime deduction, including the one-third method for time-and-a-half workers.
  • November 2025: IRS released Notice 2025-62 providing employer reporting transition relief for tax year 2025, confirming that separate W-2 reporting of qualified overtime is not required for 2025.
  • November 15, 2024: U.S. District Court for the Eastern District of Texas vacated the DOL’s 2024 final rule (Texas v. U.S. Department of Labor, No. 4:24-cv-00499). The exempt salary threshold remains $684/week ($35,568/year).
  • January 1, 2026: No change to Texas minimum wage — remains $7.25/hour, matching the federal minimum wage. The minimum overtime rate in Texas remains $10.88/hour.

Texas-Specific Changes

Texas did not enact any new state overtime legislation in 2025 or 2026. The state minimum wage remains tied to the federal rate. Unlike some states, Texas has not introduced pending legislation to create a state-level overtime tax exemption.

No state income tax advantage for Texas workers: Texas workers already benefit from the absence of a state income tax, meaning overtime pay in Texas has always been exempt from state-level income taxation. The new federal deduction (2025–2028) adds a federal income tax benefit on top of this existing advantage.

Last reviewed: February 25, 2026
Next scheduled review: May 25, 2026

Frequently Asked Questions About Overtime in Texas

Does Texas have its own overtime law?

No. Texas does not have a separate state overtime statute for private-sector employees. Overtime in Texas is governed by the federal Fair Labor Standards Act (FLSA), 29 U.S.C. § 207. Under the FLSA, nonexempt employees must receive overtime pay at 1.5 times their regular rate of pay for all hours worked over 40 in a workweek.

What is the overtime rate in Texas in 2026?

The overtime rate in Texas is 1.5 times the employee’s regular rate of pay for hours worked over 40 in a workweek. Based on the Texas minimum wage of $7.25/hour, the minimum overtime rate is $10.88/hour. There is no double-time requirement under Texas or federal law.

Does Texas require daily overtime?

No. Overtime in Texas is calculated on a weekly basis only. Working more than 8 or 12 hours in a single day does not trigger overtime unless total weekly hours exceed 40. Texas has no daily overtime threshold.

Is mandatory overtime legal in Texas?

Yes. Under federal law and Texas at-will employment rules, employers can generally require adult employees (age 16+) to work overtime. Texas does not have additional state-level restrictions on mandatory overtime for private-sector workers. Employees who work mandatory overtime must be compensated at the applicable overtime rate. Employees who refuse overtime may be subject to discipline or termination unless a contract or collective bargaining agreement provides otherwise.

Am I exempt from overtime in Texas?

Exemption depends on both salary level and job duties. Under the FLSA, an employee must earn at least $684/week on a salary basis and perform executive, administrative, professional, computer, or outside sales duties to qualify as exempt. Texas does not impose a higher state threshold. Being paid a salary or having the title “manager” does not automatically exempt an employee.

Can salaried employees get overtime in Texas?

Yes. Being paid a salary does not automatically make an employee exempt from overtime. Salaried employees who earn less than $684/week or who do not meet the FLSA duties tests are nonexempt and entitled to overtime pay. Even salaried employees earning above $684/week may be entitled to overtime if their actual job duties do not meet the executive, administrative, or professional criteria.

Is overtime taxed in Texas?

Overtime pay is subject to federal income tax and federal payroll taxes (Social Security and Medicare). Texas does not have a state income tax, so overtime is not taxed at the state level. Under the One Big Beautiful Bill Act (2025–2028), FLSA-covered nonexempt employees may deduct up to $12,500 (or $25,000 for joint filers) of the premium portion of overtime from federal taxable income.

How do I calculate the overtime tax deduction?

For time-and-a-half pay, the deductible amount is the “half” portion — one-third of total overtime pay. For example, if you earned $9,000 in total overtime compensation at time-and-a-half, the qualified overtime compensation (the premium) is $3,000 ($9,000 ÷ 3). The IRS confirms this calculation method in Notice 2025-69. Claim the deduction using Schedule 1-A (Form 1040) when filing your federal return.

How do I file an overtime complaint in Texas?

You have two main options. First, file a wage claim with the Texas Workforce Commission (TWC) online at apps.twc.texas.gov/WAGECLAIM/logon or by calling 800-832-9243. The TWC deadline is 180 days from when the wages were due. Second, file a complaint with the U.S. DOL Wage and Hour Division at dol.gov/agencies/whd/contact/complaints or by calling 1-866-487-9243 — the FLSA deadline is 2 years (3 years for willful violations), and complaints are kept confidential.

Can my employer fire me for refusing overtime in Texas?

In most cases, yes. Texas is an at-will employment state, and employers may discipline or terminate employees who refuse to work overtime, unless a law, employment contract, or collective bargaining agreement provides otherwise. However, employers cannot retaliate against employees who file overtime wage complaints under the FLSA (29 U.S.C. § 215(a)(3)).

Can my employer give me comp time instead of overtime pay in Texas?

For private-sector employers, no. The FLSA prohibits private employers from substituting compensatory time off for overtime wages. Private employees must be paid 1.5× their regular rate in cash for all hours over 40 in a workweek. For Texas state government employees, comp time at 1.5 hours per overtime hour is permitted under Tex. Gov’t Code § 659.015 and 29 U.S.C. § 207(o), subject to applicable caps (240 hours general; 480 hours for public safety employees).

Does working on weekends or holidays count as overtime in Texas?

No. Under the FLSA and Texas law, working on weekends or holidays does not automatically constitute overtime. Overtime is determined by total hours worked in a workweek, regardless of which specific days those hours occurred. Only hours worked above 40 in the workweek trigger the overtime premium.

What happens if my employer doesn’t pay overtime in Texas?

Employees may recover unpaid overtime wages, plus liquidated damages equal to the unpaid amount (effectively doubling the recovery), and reasonable attorney’s fees and court costs under 29 U.S.C. § 216(b). The FLSA statute of limitations is 2 years (3 years if the violation is willful). For wages due within the past 180 days, a wage claim with the TWC is also an option.

What is the statute of limitations for overtime claims in Texas?

Under the FLSA: 2 years from the date of each violation (3 years if the violation is willful — meaning the employer knew or showed reckless disregard for whether its conduct violated the FLSA). Under the Texas Payday Law: 180 days from the date wages were due. Employees whose overtime was unpaid more than 180 days ago should pursue claims under the FLSA, not the Payday Law.

Does Texas have an oil and gas overtime exemption?

No. There is no special Texas state overtime exemption for oil and gas workers. However, certain positions may qualify for standard FLSA white-collar exemptions (executive, administrative, professional) if all three exemption tests are met. Day-rate workers are frequently misclassified — courts have consistently found that a flat daily rate does not satisfy the FLSA salary basis test required for exemption.

Are agricultural workers entitled to overtime in Texas?

No. Most agricultural workers in Texas are exempt from FLSA overtime requirements under 29 U.S.C. § 213(b)(12). Texas has not enacted a state law extending overtime protections to agricultural workers, unlike California or Washington.

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