Texas Minimum Wage Guide for 2024

Texas Minimum Wage - Historical Rates Table

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Texas Tipped Employees

“Tipped employees” are classified as someone who regularly makes over $30 a month in tips. Like other employees, “tipped employees” have the right to make a minimum wage of $7.25 per hour. However, an employer only has to pay their employees $2.13 per hour in their paycheck, as long as the employee makes a minimum of $5.12 per hour in tips, making the total pay per hour $7.25.

Employers may take a tip credit against an employee's wages for the amount they have earned in tips. To make up the difference in pay, if an employee makes less than $5.12 per hour in tips in a given work week, the employer must the employee’s earnings equal to $7.25 per hour for the work week.

Rights of Tipped Employees

• Overtime - Employees who work more than 40 hours in a workweek are entitled to one and a half times their regular hourly rate of pay.
• Pay Periods - Similar to other employees, tipped employees have the right to be paid twice a month, on a regular pay schedule.
• Earnings Statement - Employers must provide their employees with a written pay statement.
• Deductions - As ordered by a court, an employer may deduct payroll taxes. Deductions may not be taken out for incidents such as:
  
  • Customer walkouts
  • Breakage
  • Cash register shortages
  • If a uniform is required, the employer must provide the uniform without taking deductions from the employee.

Youth Minimum Wage in Texas

Authorized by Section 6(g) of the FLSA, employees under the age of 20 may receive any wage rate above $4.25 per hour for a limited period of 90 days after they are employed.

In Texas, children under the age of 18 are eligible to receive minimum wage and overtime pay. However, the sub-minimum wage of $4.25 per hour is permissible for the first 90 days of their employment. Further, children who are tipped employees can be paid the same as other tipped employees.

Texas Minimum Wage Exemptions

There are various exemptions from the Texas Minimum Wage Act, however, the primary exemption is any person who exempt under FLSA classification.

Further exemptions include:

• Employment in, of, or by religious, educational, charitable, or nonprofit organizations
• Professionals, salespersons, or public officials
• Domestics
• Certain youths and students
• Inmates
• Family members
• Amusement and recreational establishments
• Non-agricultural employers not liable for state unemployment contributions
• Dairying and production of livestock
• Sheltered workshops

Penalties for Non-Compliance

If an employee feels that they have been paid a wage rate lower than the state minimum wage requires, they may choose to take legal action. Employees may file a wage claim with the Texas Workforce Commission, or in civil court.

Any claims filed with the TWC must be filed within 180 days after the wages were due. Employees have two years from the date the wages were due to file a lawsuit.

Final Thoughts on Texas Minimum Wage

Businesses struggling to maintain minimum wage compliance or manage payroll may want to consider outsourcing payroll to a Texas Payroll Provider. Areas for additional knowledge and learning include the basics of payroll and what to know about modern payroll software.  

To learn more about how Employer Pass is helping countless businesses maintain minimum wage compliance, contact us today or use the find a provider tool.