FLSA Exemption Tests: Are You Really Exempt from Overtime?

Many Houston workers hear they are “salary,” assume they are “exempt,” and never look deeper. Employers often reinforce this belief with job titles like “manager,” “coordinator,” or “lead.” But under the Fair Labor Standards Act (FLSA), job titles do not decide anything. Your actual duties and your pay structure decide your status.

This is a point I see in my own practice every year. Many employees come to me after months or years of unpaid overtime. They worked fifty or sixty hours each week, trusted their employer, and later learned they never should have been classified as exempt. The damage can be serious. Overtime lawsuits can run into years of unpaid wages.

This guide explains how the overtime exemption tests work in Texas, how exemptions apply to Houston industries, and how you can tell if your classification is wrong. It also covers the salary basis test, the duties tests, and the common areas where employers get it wrong.

Why Exemption Status Matters in Texas

Texas follows federal FLSA rules. That means the core question is the same for every Houston employee: Do you meet all three exemption tests?

• Salary basis test
• Salary level test
• Duties test

If you fail any one of them, you are non-exempt and owed overtime pay for hours over 40 in a workweek. The U.S. Department of Labor outlines these requirements in its detailed FLSA Overtime Fact Sheet #17A.

Under the FLSA, non-exempt employees must be paid time-and-a-half for overtime. Employers cannot average hours across weeks, and they cannot waive overtime rules. The FLSA rules are clear in the Code of Federal Regulations, 29 CFR Part 541.

Houston workers in oil and gas, healthcare, logistics, retail, and tech see these problems often. Many employers try to apply exemptions where they do not fit.

Understanding the Three FLSA Exemption Tests

1. Salary Basis Test

To be exempt, the employee must be paid a fixed salary every week.
The pay cannot go down based on:

• Hours worked
• Work quality
• Number of shifts
• Customer volume
• Business cycles

The DOL explains how the salary basis test works in Fact Sheet #17G.

If deductions occur often based on hours or performance issues, the employee is likely non-exempt.

2. Salary Level Test

Under current rules, exempt employees must be paid at least $684 per week ($35,568 annually), according to DOL’s salary level regulations.

If an employer pays less than $684 per week, the employee is non-exempt—even if they perform advanced duties.

The highly compensated employee (HCE) threshold is $107,432, explained in Fact Sheet #17H.

3. Duties Test

Duties—not titles—decide exemption. The duties tests are fully outlined in 29 CFR §541 Subpart B–G.

There are four main exemption categories:

Executive Exemption

To meet the executive exemption, the employee must:

• Manage a department
• Direct two or more full-time employees
• Have hiring or firing authority

Full criteria explained at 29 CFR §541.100.

Many “assistant managers” fail this test because they perform mostly manual or routine tasks.

Administrative Exemption

This applies when the employee:

• Performs office or non-manual work
• Handles work tied to business operations
• Exercises independent judgment

See 29 CFR §541.200.

Routine clerical or support work does not qualify.

Professional Exemption

This exemption applies to roles requiring advanced education and specialized knowledge. Standards defined at 29 CFR §541.300.

Computer Employee Exemption

Applies only to specific computer-related roles, listed in Fact Sheet #17E.

Outside Sales Exemption

Defined at 29 CFR §541.500. Inside sales employees rarely qualify.

Common Misclassification Problems in Houston

Houston has industries that see frequent exemption mistakes, including:

• Oil and gas
• Healthcare
• Tech
• Logistics
• Retail / food service

Each has its own pattern of violations, often due to poor HR training or outdated job descriptions.

Signs You May Be Misclassified as Exempt

You may be misclassified if you:

• work more than 40 hours weekly with no overtime pay
• perform routine or manual tasks
• follow strict procedures
• do not supervise staff
• cannot influence hiring or firing
• make less than $684 per week

The DOL’s misclassification page offers guidance: https://www.dol.gov/agencies/whd/misclassification

How Unpaid Overtime Claims Work in Texas

Texas follows federal overtime rules. Employees may recover:

• Unpaid overtime (up to three years)
• Liquidated damages
• Attorney’s fees

The process is regulated by the U.S. Department of Labor’s Wage and Hour Division.

Recent Legal Updates Affecting Exemption Rules

A Texas federal court blocked proposed 2024 salary-level increases. The ruling is available through federal court records, and DOL has issued updates here: https://www.dol.gov/agencies/whd/overtime

This area is evolving. Anyone unsure about their classification should seek legal guidance.

What to Do If You Think You Are Misclassified

1. Review your duties

Compare your daily tasks to the exemption criteria in 29 CFR Part 541.

2. Gather pay records

This includes timesheets, schedules, and job descriptions.

3. Speak with an employment attorney

An attorney can analyze your role under the exemption framework.

Frequently Asked Questions

How do I know if I am exempt?

Check all three tests: salary basis, salary level, and duties. The DOL explains them in Fact Sheet #17A.

Does my job title matter?

No. Titles do not decide exemption.

Can salaried employees receive overtime?

Yes. Salary alone does not make an employee exempt.

Can daily-rate workers be exempt?

Only if they also receive a guaranteed weekly salary, per Helix Energy Solutions decision summary.

Speak With a Houston Employment Attorney

If you feel unsure about your classification, you are not alone. Houston employees face misclassification problems in many industries. I have represented many workers and employers in overtime and exemption cases, and I understand how these disputes move through Texas courts.

If you suspect your exemption status is wrong, reach out for a consultation. A review of your duties and pay structure can reveal whether you have a valid claim for unpaid overtime.