Key Provisions of the FLSA Most Businesses Must Uphold

The Fair Labor Standards Act (FLSA) is a federal law governing such employee issues as the minimum wage, overtime pay, child labor restrictions and record-keeping practices. It’s the duty of the Wage and Hour Division of the Department of Labor to administer this law.

The FLSA benefits exempt and nonexempt employees somewhat differently. For example, exempt employees do not have a federally guaranteed right to overtime pay — and minimum wage provisions usually don’t apply to them. Company executives and “outside sales” employees are among those who often hold exempt positions. Human resource personnel must fully understand the different rights that apply to these distinct classifications.

Here’s some additional information on jobs not usually covered by overtime pay, the wages owed to nonexempt employees, laws designed to safeguard children and basic ways that the DOL enforces violations of the Fair Labor Standards Act.

Workers or specific professions often exempt from overtime pay

  • Railroad and air carrier employees
  • Taxi drivers and some motor carrier workers
  • Those employed on American vessels at sea
  • Local delivery workers who are compensated under specific rate plans
  • News editors, announcers and chief engineers working for non-broadcasting stations
  • Farmworkers

Basic nonexempt employee wage rights

The current minimum wage in Texas is $7.25 an hour. However, waitstaff and other employees are governed by unique standards that are supposed to bring them up near (or equal to) the minimum wage. In addition to the wage rights set forth under the FLSA, state and municipal laws often provide somewhat higher minimum wages to nonexempt employees. Your Houston employment law attorney can update you on any recent changes in Texas law on this point.

Another important wage guarantee provided by the FLSA involves overtime pay. Nonexempt employees who work over 40 hours per week must be paid one and one-half times their regular pay rate for additional hours. Therefore, if a nonexempt employee normally earns $12 an hour – and is asked to work five extra hours one week – that employee must be paid $18 an hour for each of the additional five hours (in addition to the regular rate of pay for the 40 hours).

In some states, there are laws limiting how many hours a day a worker can be on duty. All employers must make sure they honor such provisions.

Federal job protections designed to benefit children

In most workplace settings, children must be age 16 or older to hold down a job – although they must be at least 18 years old to drive a motor vehicle for an employer – or to work in mining. However, exceptions have been made so that the FLSA does not apply to child actors, kids delivering newspapers or those making simple crafts at home.

Unfortunately, few restrictions protect children who’ve been hired as farm labor. Once a waiver has been obtained from the Department of Labor (DOL), a child as young as 10 or 11 can be hired to help with hand harvest labor.

There is also a “youth minimum wage” that applies to children (age 20 and younger) that’s equal to $4.25 an hour; it can be paid for 90 consecutive days of work. This makes summer jobs for teenagers easier to come by – although the pay isn’t very high. However, employers cannot displace any older workers receiving the standard minimum wage to simply save money by hiring teenagers at that lower pay rate.

The DOL’s Wage and Hour Division is charged with enforcing the FLSA

A complaint can be filed against businesses that violate any FLSA employee rights. While willful violations can be prosecuted in a criminal court, less serious or unintentional mishandling of FLSA duties may only result in civil liability. For example, if your office hires employees below the age of 16, you might be required to pay a fine of up to $1,000 for each underage young person on your payroll. A civil court might also impose specific changes in the way you handle certain hiring and record-keeping practices to prevent similar mistakes in the future.

Should the Wage and Hour Division decide that your company has failed to fully pay all that’s owed to specific workers, it can file suit against you to recover the unpaid sums of money — or obtain an injunction that will forbid any further violations of the FLSA.

If you’re uncertain whether your office is in full compliance with all FLSA regulations and all relevant Texas employment law statutes — please feel free to contact one of our Murray Lobb attorneys. We can help you review all your current practices involving the payment of a minimum wage, proper classification of all workers, the handling of overtime assignments and any other duties covered by the FLSA. A periodic review of all these workplace standards can help your business avoid any fines or lawsuits.

How Wage Garnishment Laws Affect Many Texans

Although wealthier Texans may build up significant savings and retirement accounts by middle age, most residents must keep working far longer to meet their individual and family needs. And if unexpected family or medical crises occur creating new financial emergencies, some people may face wage garnishments. Fortunately, Texas offers strong protection against many types of creditors.

Here’s a brief review of the most common types of wage garnishments pursued in Texas, basic terms you’ll need to know regarding this field – and references to special concerns you may need to discuss with your Houston business law attorney to fully protect your rights.

Important terminology related to attaching employee wages

  • Wage garnishments. In Texas, this term is often used interchangeably with “wage attachments” and refers to court orders directing employers to withhold certain amounts of money from employee paychecks to satisfy certain debts;
  • Administrative garnishments. These usually refer to federal government back taxes or student loans now in default – and they do not require a court order to be activated. Once debtors have student loans in default, they’ll normally be contacted by the U. S. Department of Education and told which collection agencies will be collecting their debts. (Note: Students loans can almost never be discharged by a bankruptcy filing);
  • Disposable earnings. This refers to the amount of money you have left in your paycheck after all mandatory deductions have been made for federal taxes, disability insurance, union dues, unemployment insurance, nondiscretionary retirement deductions, workers compensation and health insurance.

Types of debts often leading to wage garnishment

Texans are very fortunate compared to citizens of other states since Texas only honors a very limited number of garnishable debts.

  1. Unpaid child support and alimony (in arrears)
  2. Current court-ordered child support and alimony
  3. Government debts owed to the IRS (back taxes) — and all related fines and penalties
  4. Unpaid student loans (in arrears)

Note:  In light of Article IV of the U. S. Constitution, Section I (requiring each state to honor the “public acts . . .  and judicial proceedings of every other state,” certain other limited creditor debts referenced in judgments obtained outside of Texas may also be garnishable.

Be sure to speak with your Houston business law attorney whenever you receive any notice of an order to garnish your wages.

Fixed garnishment limitations that benefit Texas debtors

  • Total amount that can be garnished (based on all court orders). This is equal to 50% of your disposable earnings;
  • Percentage allowed for tax debt. This varies, based on your current deduction rate, the number of your dependents and other factors;
  • Student loans. The Department of Education can normally only garnish up to 15% of your disposable income from each paycheck;
  • Spousal support. The most your wages can be attached for this obligation is either $5,000 or 20% of your average monthly gross income – whichever is less.

Priority of wage garnishment orders

Although unusual factors might be able to change the list below, employers must normally prioritize their payment of garnishment orders in the following manner.

  • Unpaid child-support
  • Spousal support
  • Back taxes
  • Student loans

Texas employers are not allowed to discriminate against employees with wage garnishments

This has long been a concern of many employees since handling wage garnishments can take up a considerable amount of an employer’s time. Texas doesn’t allow those with wage attachments to be treated unfairly when it comes to hiring, promoting, demoting, reprimanding and firing (among other actions).

How creditors can still reach your money – apart from using wage garnishment

Even if your wages cannot be reached, regular creditors can still gain access to your money by obtaining court orders to freeze one or more of your financial accounts – and place liens on certain types of real property you own.

Please contact our law firm with any questions you may have about the proper handling of court orders to garnish wages — or any other types of administrate tasks regarding employees.