Therefore, on July 24, 2009, when the federal minimum increases to $7.25 per hour, the Texas state minimum will also increase to $7.25 per hour. Texas is one of 12 states, including Maryland, Idaho, North Dakota and Virginia, which ties its minimum to the federal minimum wage.
Under Texas minimum wage law, any employee covered by the Fair Labor Standards Act (FLSA) is excluded from Texas minimum wage. The FLSA is the main federal minimum wage law and covers employers that engage in interstate commerce and those with annual earnings of $500,000 or more.
Like many states that tie their minimum wage to the federal minimum wage, the Texas minimum wage rose to $6.55 per hour on July 24, 2008. This increase is directly related to the increase in the federal minimum wage as set forth in the Fair Minimum Wage Act of 2007. This act introduced a series of three increases, each of 70 cents over three years. The third and last increase will occur on July 24, 2009.
The Texas state minimum wage law is tied to the federal minimum. In fact, according to the US Department of Labor, the Texas law doesn’t even mention a dollar amount. Instead, it references the federal minimum wage amount and adopts that wage as its own.
In Texas, employers covered by the primary federal minimum wage statute, the FLSA or Fair Labor Standards Act, are exempt from the Texas state minimum. Companies included under FLSA are those which earn $500,000 or more annually, or which engage in interstate commerce.
The Texas Workforce Commission provides the business publication Texas Business Today. A recent issue of this publication states that in the age of the Internet, it’s nearly impossible for a company not to conduct business across states. Any company that uses the Internet, accepts credit cards or corresponds via email is engaged in interstate commerce, thereby qualifying it as an employer under FLSA.
Texas Payday Law requires employers to pay salaried workers at least twice per month. Other employees must also be paid at least twice a month, and at regular intervals. Employers are also required to display labor law posters informing workers what day they will be paid, and how often.
No overtime law exists on the Texas law books. Employers are required to follow the federal standard of 1.5 times the usual hourly rate for all time over 40 hours worked in one week.
Under Chapter 62 of the Texas Labor Code, known as the Texas Minimum Wage Act, the state minimum wage mirrors the federal minimum wage. On May 24, 2007 President Bush signed the Fair Minimum Wage Act of 2007 into law. That federal act provided for annual 70-cent increases in the minimum wage. The current increase is the second of three under the law. The federal (and Texas) minimum wage will increase again on July 24, 2009.
The Texas minimum wage will increase from $5.85 to $6.55 per hour on July 24, 2008. This 70-cent increase mirrors the increase in the federal minimum wage under the Fair Minimum Wage Act of 1007 on the same day. Under that bill, the federal minimum wage is scheduled to increase a total of 3 times between 2007 and 2009. Each increase is 70 cents. This brings the federal minimum wage from $5.15 per hour to $7.25 per hour.
The McLane Company agreed to pay $1,559,316 in overtime wages to more than 500 employees nationwide. The employees were retail merchandising specialists. According to the U.S. Department of Labor investigators, the company improperly classified the employees as outside sales persons or executives and did not pay overtime, as required under the FLSA.
“Workers are entitled to the wages they’ve earned,” said U.S. Secretary of Labor Elaine L. Chao. “We have secured more than $1.5 million in back wages for these workers, and the employer is on notice to properly compensate its employees in the future.”
The McLane Company was founded by grocer Robert McLane in 1894. The company grew to over 50,000 customers nationwide, including movie theaters, fast food, drug stores and convenience stores.
The primary issue in this case was the classification as “outside sales person.” Under the FLSA, outside sales people can legitimately be exempt from the federal minimum wage and overtime laws. However, to qualify for the outside sales exemption, an employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts. Those orders and contracts may be for goods, services, or the use of facilities. A consumer or client must pay for the orders or contracts. In addition, the sales person must be “customarily and regularly” engaged away from the employer’s place of business.
The investigators found that while the McLane Company employees normally worked away from the office, they were not engaged primarily in soliciting orders for the company. Instead, they merely demonstrated the company’s products.
In addition to outside sales people, employees in several other occupations may be exempt under the FLSA overtime provisions, minimum wage laws, or both. Some employers erroneously believe that all salaried employees are exempt from overtime. This is not true. The determining factor is the employee’s usual job duties, not the title or salaried status.
The Fair Labor Standards Act of 1938 or FLSA requires most U.S. employers to pay 1.5 times the usual hourly rate, when an employee works more than 40 hours in a payroll week. The law, which also establishes the minimum wage, applies to employers with more than $500,000 in annual revenue. It also applies to employers who do business across state lines, or individual employees who do business across state lines.
McLane Co., a wholesale distributor of food and grocery products, erroneously classified retail merchandising specialists as outside sales employees exempt from FLSA coverage. In addition, the company did not keep accurate records of hours worked, as required by the FLSA of all employers.
The settlement was reached after an in-depth investigation by the Dallas District Office of the U.S. Wage and Hour Division, Department of Labor. The Dallas investigation was sparked by an initial investigation of the McLane Company’s location in Nicholasville, Kentucky. Department of Labor officials in the Louisville Office conducted that inquiry.
The McLane Company cooperated with the investigation and has agreed to pay 570 employees back wages in full.
The FLSA requires that covered employees be paid at least the current federal minimum wage of $5.85 an hour for all hours worked, plus time and one-half their regular rates of pay for hours worked over 40 per week, unless otherwise exempt.
The federal minimum wage will increase to $6.55 per hour effective July 24, 2008, and to $7.25 per hour effective July 24, 2009. Under the FLSA, all employers must maintain accurate time and payroll records.
In 2007, the Wage and Hour Division concluded 30,467 compliance actions and recovered $220 million in back wages for more than 341,000 employees. That was a record-breaking year for the agency. Back wage collections in 2007 increased by 67% over back wages collected in 2001. The number of workers receiving back wages increased 58% since 2001.