As of July 24, 2009, the federal minimum wage increased to $7.25 an hour. Since Texas follows the federal rate, we now pay a minimum wage of $7.25 an hour also. The Texas Minimum Wage Act requires that you, the employer, provide all your employees with a written earnings statement containing information about their pay. The information on the statement allows employees to determine whether they have been paid correctly for that pay period.
Follow this link to find the basics of the Texas Payday Law. The bulk of Texas workers are not exempt from the Minimum Wage Act, however, there are exemptions to who has to be paid minimum wage. Learn more here.
So now, a little over a month into the rate change, your non-exempt minimum wage employees should be receiving $7.25 an hour. I hope you haven’t pleaded ignorance and not upped the salaries of your current workers. Saying “I didn’t know!” won’t save you from losing a Payday Law claim.
I‘ve had several calls from employers with interesting interpretations of the Minimum Wage Act. One employer said he waited until August 1 to pay $7.25 to current employees. It was just a week, it was easier on him figuring the payroll, and there was more symmetry by starting the first of the month. Not smart! Another lady told me she just thought she would take August to get organized and would start paying the new wage by Labor Day. Uh-oh! Two problems here: She will lose a Payday Law Claim and end up paying back wages and penalties.
Texas Payday Law requires non-exempt employees to be paid at least twice per month on regularly scheduled paydays. Other problems for both employers are the ill will caused by shorting paychecks and the possibility of turnover. Finding new employees may be easier in this market, but the cost of training replacements eats into profits, which are down for many businesses right now.
Maybe the employees who aren’t being paid minimum wage won’t figure it out, right? I wouldn’t count on it! The Payday Law Unit is busy processing thousands of claims. Give your employees a written earnings statement and my advice is to make sure they understand it. Too often I hear, “they (management) cheated me,” and “they don’t treat me right” from workers who don’t understand their deductions and scheduling.
Explain your pay structure, how wages are computed, and what deductions are made. A written receipt is your proof in any claims proceeding and a tool to help you communicate what’s happening with the money and the hours. Informing your employees about pay issues and other employment issues fosters better working relationships. Whether you pay an employee $7.25 or $72.50 an hour, you need the work they contribute to the business. Why else would you go through the trouble of hiring them?
Cally Graves is an Industry Liaison between business, workforce, and education working with Workforce Solutions . She has 35 years of experience in workforce development, primarily working with employers in Houston, Texas and the Gulf Coast region.
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