Texas Minimum Wage: The $7.25 Rate and Employer Rules

The first hourly role I posted in Texas sat open for a week while I hunted for the state rate. I kept looking for a Texas number the way you look one up in California or Washington. There isn't one. Texas pays whatever Congress set, and Congress last set it in 2009.

That single fact decides most of what follows. Budgeting a first hire, checking whether a server is paid legally, deciding if a city ordinance applies to your shop: the arithmetic starts at $7.25 and moves only when federal law moves.

This page covers the Texas rate and its effective date, the tip credit, the carve-outs that genuinely exist here, and the poster and pay statement duties attached to them. The broader state picture, including final pay and workers' comp, lives in the Texas HR compliance guide.

The Current Texas Minimum Wage

The Texas minimum wage is $7.25 per hour, and it took effect on July 24, 2009. Texas Labor Code Section 62.051 never names a dollar figure. It requires an employer to pay each employee the federal minimum wage under Section 6 of the Fair Labor Standards Act, so the state floor is defined as a pointer rather than a number.

The Texas Workforce Commission puts it in one line on its Texas Minimum Wage Law page: Texas adopts the federal minimum wage rate, $7.25 per hour, effective July 24, 2009. There is no separate state schedule to track and no cost of living adjustment anywhere in Chapter 62.

Is a Texas Increase Scheduled?

No increase is scheduled. There is no step schedule waiting in statute, no ballot measure result pending, and no inflation index in the Texas Minimum Wage Act. Nothing raises the Texas rate automatically on January 1 the way it happens in indexed states.

The rate can move in exactly two ways. Congress can amend Section 6 of the FLSA, in which case Texas inherits the new figure on the federal effective date without any state action, because Section 62.051 points at federal law. Or the Legislature can amend Section 62.051 itself, which it last did in 2003, and it meets in regular session only in odd-numbered years.

The table below is the federal schedule Texas inherited. It is also the last time any Texas employer had to change an hourly rate because the floor moved.

Those steps come from 29 U.S.C. 206(a)(1), which set three increases running from the 60th day after May 25, 2007. The third one landed on July 24, 2009, and the federal floor has not moved since.

Tipped Employees and the Tip Credit

A tipped employee in Texas can be paid a cash wage of $2.13 per hour, with tips covering the rest of the $7.25. The maximum tip credit is $5.12 per hour, which is simply the difference between the two figures. Texas allows the credit; it does not restrict it beyond the federal rules.

Texas Labor Code Section 62.052 defines a tipped employee as someone who customarily and regularly receives more than $20 a month in tips, and ties the wage calculation to Section 3(m) of the FLSA. The federal regulation at 29 CFR 531.59 holds the mechanics: the cash wage cannot drop below $2.13 and the credit cannot exceed the minimum wage minus that cash wage.

Two conditions ride along with the credit. You have to tell the employee in advance that you are taking it, including the cash wage and the credit amount, and the employee keeps every tip except through a valid pool limited to staff who customarily and regularly receive tips. Miss either condition and the credit disappears, which means you owe the full $7.25 in cash for those hours. The mechanics of a compliant arrangement are covered in our guide to tip pooling.

Section 62.053 adds a Texas wrinkle worth knowing. You may count the reasonable cost of meals or lodging you customarily furnish toward the wage, but only if the cost is stated and identified separately on the employee earnings statement. For a deeper walk through the credit itself, see minimum wage for tipped employees.

City and County Minimum Wage Rates in Texas

No Texas city or county sets a minimum wage for private employers. Texas Labor Code Section 62.0515 provides that the state minimum wage supersedes a wage established in an ordinance, order or charter provision governing wages in private employment, other than wages under a public contract.

Section 62.151 closes the same door from the other side. Neither Chapter 62 nor a municipal ordinance governing private wages applies to a person covered by the FLSA. A local ordinance could not reach your hourly staff even if a council passed one.

The exceptions are contractual rather than territorial. If you sign a contract or an agreement with a city or county, including a non-annexation agreement, and it carries a wage floor, that floor binds you and the contractors and subcontractors you bring in to perform the work. That is the one place a local number can reach a private payroll in Texas.

Industry Carve-Outs and Exemptions

Texas has no fast food wage, no healthcare wage and no regional wage. The carve-outs in Chapter 62 are exemptions from the state act, not alternative rates, which is a distinction that trips up employers moving here from a state with industry tiers.

One exemption swallows most of the rest. Section 62.151 exempts anyone covered by the FLSA from the Texas Minimum Wage Act, and federal enterprise coverage reaches businesses with annual sales of at least $500,000 under 29 U.S.C. 203(s), plus individual employees engaged in commerce. For a typical small employer the operative rule is federal, and the state act matters mostly for workers federal law does not reach.

The full list of state exemptions is in Chapter 62 of the Texas Labor Code. The categories most likely to come up at a small business are below. If a worker is exempt from the state act but covered federally, review the federal classification rules in our guide to exempt versus non-exempt employees.

Agriculture is the one area where Texas sets numbers of its own. TWC explains that the Commissioner of Agriculture establishes piece rates for picking and harvesting, built around what an average worker can do in a given time, so an average worker reaches at least minimum wage while faster pickers earn more.

Youth and Training Wages

Texas has no state youth wage and no training wage. The only subminimum rate generally available to a Texas employer is the federal youth wage: $4.25 per hour for an employee under 20 years old, during the first 90 consecutive calendar days after you initially employ them, under 29 U.S.C. 206(g).

Two limits matter in practice. The clock runs on calendar days rather than days worked, so it expires 90 days after the hire date no matter how thin the schedule was, and it ends the moment the employee turns 20. You also may not displace an existing employee, including by cutting hours, wages or benefits, in order to hire someone at the youth rate.

Section 62.155 of the Texas act exempts some workers under 18 and student workers under 20 from the state minimum wage entirely. That exemption does nothing for an employer covered by federal law. Hours and job restrictions for minors are a separate body of rules, covered in our guide to child labor laws.

Posters and the Texas Earnings Statement

Texas does not require a state minimum wage poster. The Texas Minimum Wage Act imposes a pay statement duty instead: Section 62.003 requires a written earnings statement at the end of every pay period, signed by the employer or an agent, and it may sit on a check voucher rather than a separate document.

The federal poster is still mandatory. 29 CFR 516.4 requires every employer with employees subject to the minimum wage provisions to post the Wage and Hour Division notice explaining the Act, in a conspicuous place in each establishment. TWC separately requires the Texas Payday Law poster from employers subject to that law, and the combined unemployment and payday notice from employers liable under the Texas Unemployment Compensation Act.

Keep the earnings statements. They are the evidence that answers a wage claim, and they pair with the federal payroll retention rules described in our guide to payroll records.

How Texas Relates to the Federal $7.25

Texas does not run a rate against the federal one; it is the same figure by statute. The federal minimum wage has been $7.25 since July 24, 2009, which is exactly why the Texas number has not moved either. Other states have set higher floors of their own, and Texas is in the group that stays on the federal number.

If Congress raises the federal minimum, Texas employers inherit the new rate on the federal effective date, with no wait for the Legislature and no state rulemaking. That is worth knowing before you sign a long fixed-price contract with thin labor margins. The national picture, including the full state by state table, is in our federal minimum wage guide.

If you hire outside Texas, the scheduled changes in other states are the ones that will bite, and we track them in federal and state minimum wage increases. The Department of Labor also publishes a state minimum wage table that is the fastest way to confirm a single state.

What to Do When the Rate Rises

Because Texas tracks federal law, a rate change here arrives as a federal effective date rather than a state announcement. The work is the same either way, and it is worth having the sequence written down before you need it.

The one Texas-specific step is the earnings statement. Section 62.003 asks for the rate of pay on every statement, so a rate change that never reaches the pay stub template creates a second problem on top of the underpayment.

Frequently Asked Questions

What is the minimum wage in Texas?

It is $7.25 per hour, effective July 24, 2009. Texas Labor Code Section 62.051 requires employers to pay the federal minimum wage set by Section 6 of the Fair Labor Standards Act, so the state figure tracks the federal one exactly. There is no regional rate and no annual adjustment.

Is the Texas minimum wage going up?

No increase is scheduled. The rate rises only if Congress amends the FLSA, which would flow through automatically, or if the Legislature amends Section 62.051, which it last did in 2003 and can only do in an odd-year regular session.

Can a Texas city or county set a higher minimum wage?

No. Section 62.0515 makes the state wage supersede any ordinance, order or charter provision governing private employment wages, other than wages under a public contract, and Section 62.151 keeps municipal wage ordinances away from anyone covered by federal law. Contracts with a governmental entity are the narrow exception.

How much do I pay tipped employees in Texas?

A cash wage of $2.13 per hour, with a tip credit up to $5.12, as long as cash plus tips reaches $7.25 for every hour worked. Section 62.052 defines a tipped employee as someone receiving more than $20 a month in tips. If the tips come up short in a workweek, you pay the difference.

Can I pay a training wage to a new hire in Texas?

Only the federal youth wage of $4.25 per hour, and only for employees under 20 during their first 90 consecutive calendar days. You cannot displace an existing employee to use it, and Texas offers no training wage of its own.

Does Texas require a minimum wage poster?

Not a state one. Federal rules require the Wage and Hour Division notice in every establishment, and Texas requires a written earnings statement each pay period under Section 62.003. TWC also requires the Texas Payday Law poster from employers subject to that law.

What happens if I underpay a Texas employee?

The employee can sue for the unpaid wages plus an equal amount as liquidated damages, with attorney fees and costs on top, within two years of the date the wages were due. TWC also accepts wage claims filed within 180 days, and federally covered employees can go to the Wage and Hour Division instead.