The minimum wage in Texas is tied directly to the federal minimum wage. To comply with Texas labor laws, all businesses must pay employees at least the minimum hourly wage, with limited exceptions. Adequate compensation for your workers leads directly to the success of your business and increased employee satisfaction.
This guide covers the Texas minimum wage requirements, some special considerations, and some best practices your business can follow.
Texas Minimum Wage Laws
The Texas minimum wage is currently $7.25 an hour, which applies to every county and almost every municipality in Texas.
- Austin: The City of Austin raised its minimum wage to $20.80 per hour in October 2023.
- Houston: Houston plans to raise its minimum to $15 an hour by 2025 but is currently still in line with the state’s $7.25 an hour.
Other than these exceptions, the $7.25 an hour minimum wage is universal across the rest of Texas. The last time the minimum wage changed in Texas was in 2009, when it increased from $6.55 to $7.25 an hour.
Federal vs. State Minimum Wage
The Texas minimum wage is tied directly to the federal minimum wage, which is currently $7.25 an hour. The federal minimum wage is not tethered to inflation, so both have remained static for quite a few years. This consistency simplifies things for employers, who don’t have to navigate differences between state and federal minimum wages.
Employees who work longer than 40 hours per week are entitled to time and a half wages, or 1.5 times their usual hourly rate. For minimum wage employees, this translates to $10.88 per hour.
Compliance Requirements for Businesses
Certain exceptions to the Texas minimum wage requirements exist, which we list below in ‘Special Considerations.’ Other than in those situations, however, all employers must comply with Texas labor laws by paying minimum wage (or higher) to their non-exempt employees.
The Texas Workforce Commission enforces minimum wage laws in the Lone Star State. If a worker believes they are being paid less than minimum wage, they can file a complaint with the commission. A thorough investigation of the business is then conducted. Therefore, record-keeping for employees is crucial. Non-compliance can result in back wages and legal action.
Special Considerations
Certain categories of workers, such as certain types of volunteers, learners, and individuals with disabilities, are not subject to the minimum wage requirements in Texas:
- Youth Workers: Under 20 can be paid a training wage of $4.25 an hour for the first 90 days of employment.
- Student Workers: High school and college students working part-time (20 hours or less per week) can be paid $6.16 per hour.
- Tipped Employees: The base wage is $2.13 an hour, with the requirement that the combined hourly wage plus tips must total at least $7.25 an hour. Tips must be reported monthly and are taxable. Employers can claim a tip credit.
Best Practices for Employers
Implementing best practices can help you meet employer responsibilities for Texas minimum wage. No bills are currently pending in the Texas legislature to raise the state’s minimum wage, but changes could happen in the future. Employers should stay informed about wage and labor laws.
- Effective Payroll Systems: Ensure accurate and timely wage payments, employee classification, and compliance with state regulations.
- HR and Payroll Training: Keep staff updated on compliance requirements with training materials and detailed guides.
Wage Compliance in Texas with Affiliated HR & Payroll
With the right software and training, your HR and payroll staff can keep your business compliant with Texas labor laws. Contact Affiliated HR & Payroll Services for expert guidance on managing minimum wage compliance and other payroll requirements in Texas!
Client Service Representative at Affiliated HR & Payroll Services