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Priority Between Pay Agreements and Statutes

 

As a general rule in employment law, whenever two or more statutes or principles of law apply to an employee's situation, the one that results in a greater benefit to the employee must be applied. In general, wage and hour statutes supply floors below which wages may not go. Wage agreements that do not comply with specific statutes must be ignored to the extent that they conflict with statutory minimums. Wage agreements that exceed state or federal minimums will take precedence under general contract principles and under most state wage payment laws, including the Texas Payday Law. When deciding whether a state or federal wage payment law or a specific agreement takes precedence, an employer can use the following rules of thumb:

  1. The FLSA sets minimum wage levels (minimum wage of $7.25 per hour (the Texas minimum wage is the same); a minimum cash wage of $2.13 per hour for tipped employees; overtime pay at one and a half times the regular rate of pay; and a minimum salary level of $455 per week for salaried exempt employees).

  2. The Texas Payday Law enforces wage agreements; the term "wage agreement" applies to any agreement or obligation, pertaining to compensation, that is not required under a statute. Thus, the Texas Payday Law would apply to an individual agreement to pay a worker a specific salary, to a collective bargaining agreement negotiated by a union with the company on behalf of the employees in the bargaining unit, and to compensation specifications contained in a government contract.

  3. In the absence of a specific wage agreement, the minimums provided in the FLSA would apply and be enforceable under the Texas Payday Law, or if the employer is exempt from the FLSA, the minimum wage provided in the Texas Minimum Wage Act (Chapter 62 of the Texas Labor Code) would apply and be enforceable under the Texas Payday Law. In the case of most companies, the FLSA would apply. If neither law applies, then the common-law principle of quantum meruit (see preceding discussion of pay agreements) would apply and be enforceable under the Texas Payday Law.

  4. If there is a specific wage agreement that provides more than the minimums in the FLSA, the express wage agreement would take precedence.

 

As noted above, if there is a wage agreement in effect at a company, whether it is a standalone agreement, part of a larger agreement, or is obligatory under a government contract, and it would provide for premium or extra payments to employees under specific circumstances, then that agreement is what would be enforceable under the Texas Payday Law, since it goes beyond the minimums required under the FLSA.

 

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