Pay and Frequency

• Hourly non-exempt employees must be paid the federal minimum wage. As of September 2011, Texas minimum wage is the same as the federal minimum wage -- $7.25 per hour. If the state minimum wage is higher than the federal minimum wage, employers must pay the amount that favors the employee. Employers must pay hourly non-exempt workers at least twice a month, which means they can pay employees on a weekly basis, a bi-weekly basis or semi-monthly, but not on a monthly basis.
  
  

Overtime

• Hourly non-exempt employees are entitled to overtime compensation at no less than 1 1/2 times their regular hourly rate. Hourly employees paid on a semi-monthly basis who work overtime within the pay period must receive payment for all overtime with their regular paycheck. However, if the overtime overlaps two pay periods, the employer has to pay overtime in two paychecks. This is an ideal reason to automate payroll processing for large employers or excessive overtime hours.
  
  

Recordkeeping

• Texas employers should keep payroll records for hourly non-exempt employees for at least four years. The Texas Payday Law requires that employers keep payroll records for just two years; however, the federal Fair Labor Standards Act requires that employers store payroll records for three years. The reason Texas recommends four years is that unemployment compensation claims may request records that date back four years from the date of the employee's claim.
  
  

20 Percent Rule

• When Texas employers reduce employee wages, they should be mindful of the impact pay cuts have on workers, particularly employees who are hourly non-exempt workers who may supplement their income with overtime hours. Advance notice of pay cuts is absolutely necessary, which means the notice cannot affect previous wages earned and not yet paid. The 20 percent rule applies to pay cuts in an amount that justifies an employee looking for employment elsewhere. Reducing employees' wages by 20 percent or more can result in employee resignations and filings for unemployment benefits.
  
  

Breaks

• Texas hourly non-exempt employees are entitled to short breaks, of around five to 20 minutes, that are compensable time. However, if the employer provides a meal break that's 30 minutes or longer, that time may be deducted from the employee's paycheck. Under federal law, nursing mothers must be allotted time to express milk. However, the time spent outside the normal break times for nursing mothers doesn't have to be paid time.