Are you planning to settle in Texas? If so, you can’t miss out on some of its attractive places, such as the San Antonio River Walk, The Alamo, Dallas Arboretum & Botanical Gardens, The Sixth Floor Museum at Dealey Plaza, and many more. But instead of exploring these places, your concern will be more about your cost of living in Texas.
You must want to know about the minimum wage in Texas in 2024. Well, you’re not alone! Whether it is a businessman navigating their payroll or a worker trying to make ends meet, understanding minimum wage can help them to make informed decisions.
Unlike many US states, Texas has adopted the federal wage rate of $7.25 per hour. Keep reading the article to explore everything you need to know about minimum wage. So, let’s get started!
What is the Minimum Wage in Texas Per Hour For 2024?
For many years, Texas alligned its minimum wage with the federal level. On 24 July 2009, the federal minimum wage was $7.25 per hour. Currently in 2024, the minimum wage is still the same. There has been no law passed in the past few years to increase the minimum wage rate.
However, many advocates argued it’s time to change the minimum wage rate, as Texas is a state where housing and living costs keep booming. Several local initiatives and proposals were made to increase the wage rate in specific cities. For example, Houston is planning to raise its minimum wage for municipal workers and Austin has set a higher wage rate for city employees.
History of Minimum Wage Rate in Texas
| Year | Texas’ Minimum Wage |
| 1997 | $5.15 |
| 2007 | $5.85 |
| 2008 | $6.55 |
| 2009 | $7.25 |
| 2023 | $7.25 |
| 2024 | $7.25 |
Key Factors Influencing Minimum Wage in Texas
Here are some key factors that influence Texas’ minimum wage;
1. Economic Conditions
The overall economic condition of a state has a major influence on the minimum wage rate. States with strong economies and low unemployment rates often stimulate higher wages. When the economy is in decline, employers tend to have a stronger resistance to increases in wages, which translates into state and federal laws on minimum wages.
2. Cost of Living
Cost of living is another key factor influencing minimum wage in Texas. It is a amount of money required to maintain a certain standard of living. However, the cost of living varies across Texas, with urban areas typically having higher living expenses than rural regions.
This disparity has an impact on wage rates because employers have to take into account the local price of house, transportation, and other basic commodities. Regions with a higher cost of living often appeal for higher minimum wages so workers can afford basic needs.
3. Political Climate
The political climate in Texas plays a crucial role in the minimum wage policies. Legislative changes are decided by party ideologies and public opinion. When the state officials support raising wages, the conditions improve for workers, but opposition makes it difficult to achieve the changes.
4. Labor Market Dynamics
Another factor influencing the minimum wage is the labor market demand and supply. When there is a high labor demand but fewer workers, the wage rate is going to increase. When there are more workers, the likelihood of employers raising wages is likely to lower and thus affecting the minimum wage landscape.
5. Inflation Rates
Inflation reduces purchasing power, which results in the adjustment of the minimum wage. Rising prices for goods and services lead to demands for higher wages to maintain living standards. In the case of the issue of inflation, policymakers debate on wage increments to allow the wages of workers to inflate with the inflation rates.
6. Industry Variations
Some sectors can handle an increase in wages much better than others. There are industries that are so technology and finance-based that the price of wages is higher because the companies themselves are profitable; other sectors would be retail and hospitality, which usually maintain lower margins.
So the comparison creates discussions about the level of minimum wage adjustment needed; it is the benchmark where industries negotiate their respective capacities for wages.
Current Minimum Wage Rates in Texas For Different Types of Employees
Texas minimum wage rates for different types of employees are indicated as follows;
- Non-Tipped Employees:- The minimum wage rate for non-tipped employees in Texas is the same as the federal minimum wage, $7.25 per hour. These are the employees, who do not receive tips as part of their wage.
- Tipped Employees:- For tipped employees such as waiters and bartenders, the minimum wage rate differs due to the nature of their earnings. As they receive both base wages and tips from customers, these employees are required to pay a minimum wage of $2.13 an hour. Their total income must be equal to federal minimum wage of $7.25 per hour.
- Young Employees (Below 20):- According to the Fair Labor Standards Act (FLSA), employees under the age of 20 may receive a wage rate of around $4.25 per hour for a limited period of 90 days after they are employed.
Who are Exempted From Minimum Wage Laws in Texas?
Certain groups of workers in Texas are specifically exempted from minimum wage laws. Here is a clear explanation of each of them;
1. Federal Employees
Federal employees are usually covered by federal wage laws rather than state wage laws. Under federal codes, the minimum wages or the exemptions may depend on the jobs and the areas of the employees. In this case, federal law supersedes various state-specific wage requirements.
2. Small Business Employees
Employees of small businesses are exempt from Texas’ minimum wage laws under specific conditions. It depends on the size of business and its classification, such as companies with fewer than 25 employees are considered small businesses. However, high-volume retailers, with gross annual sales exceeding $2 million do not qualify for this exemption and must comply with minimum wage laws.
3. Agricultural Workers
Another category of employees who are exempt from Texas minimum wage laws are agricultural workers. These types of workers may be involved in farming and other related activities, like processing and marketing of agricultural products.
4. Domestic Service Workers
Domestic Service workers who work as housekeepers, nannies, and caregivers also fall outside the application of minimum wage laws. These types of employees perform their jobs in private houses and hence are not easily regulatable according to traditional minimum wage laws.
5. Student Learners
In some cases, students who are in vocational or job training programs within high school or college can be paid less than the minimum. In this case, it is an exception so that these students would not be barred from experience work and thus completing school with fewer responsibilities.
6. Trainee Workers
Workers fulfilling specific qualifications, such as working under close supervision, may also be exempt. The workers may legally be paid a reduced wage during the training period since the primary benefit of the period is considered to be educational rather than productive for the employer.
Minimum Wage Compliance and Employers’ Responsibilities
(TWC) the Texas Workforce Commission is responsible for enforcing the state’s minimum wage laws. They ensure that employers comply with these laws, investigates complaints of wage violation and take appropriate action against non-compliant employers.
Employers should comply with Texas’ minimum wage laws to avoid any legal repercussions and foster a fair workplace environment.
Employer Responsibilities for Minimum Wage Compliance
Here are some key responsibilities of employers to ensure compliance with minimum wage laws;
- Understanding Minimum Wage Rates:- Employers should understand the federal minimum wage, set by FLSA, and various state and local rates. State and local rates will be greater than the federal rate; employers should use the higher rate when they are covered by multiple laws.
- Paying the Correct Minimum Wage:- Employers should make sure they are paying at least the federal minimum wage of $7.25 per hour to their workers.
- Recording of work hours:- The employers should record actual work hours. The reliability and accuracy of the time clock or hand recording must protect employees against wage theft and disparities.
- Timely Payments:- As an employer, you should pay your employees on time. Exempt employees should be paid atleast once a month. On the other hand, non-exempt employees should be paid at least twice a month.
- Payment of overtime: While employers have the minimum wage mandate, they must also obey overtime. Essentially, they have to pay 1.5 times the hourly rate of employees for work more than 40 hours in a week.
- Provide pay slips:- Proper pay slips with hours work, rate, deductions and net pay help employees get the check whether they are properly paid or not and being paid at minimum wage according to law.
What Happens if Employers Violate Texas’ Minimum Wage Laws?
As an employer, if you fail to complay with Texas’ minimum wage laws, you have to face some serious legal repercussions to ensure fair treatment for employees and to deter violations.
1. Back Pay
Employers may be required to pay back wages if it underpays its eomployees. This refers to the difference between the paid amount and the minimum wage during the relevant period. However, employers can also be liable for extra damages, which in many states would amount to an equal amount of double back pay owed.
2. Penalties and Fines
The Texas Workforce Commission also mandates that there will be penalties and fines on employers for non-compliance with Texas’ minimum wage laws. Such penalties can be based on each offense and can be substantial, particularly for repeat offenders.
3. Legal Action
According to the Texas Workforce Commission, employees may also sue the employer on grounds of wage violations. A successful case for such a lawsuit might come with large sums of back wages, attorneys’ fees, and other compensations.
4. Reputation Damage
If you are a businessman successfully running a brand, non-compliance can lead to negative publicity of your business and damage to your reputation. This may jeopardize the relationship between you and your employers and clients, which may impact your abilities to attract and retain workers.
5. Business License Revocation
Non-compliance may also lead to revocation of the operating business license, a severe prohibition against continuing to operate legally in Texas.
Those complying with Texas minimum wage laws avoid such consequences and thus offer a more conducive, legally based workplace.
Steps Employees Can Take If They Suspect a Wage Violation
If the employees suspect a wage violation, there are several proactive steps they can take to ensure their rights are protected while dealing with the problem. Here is a guide;
- Understand Wage Laws:- Understand federal, state, and local wage laws, including minimum wage, overtime, and other conditions.
- Review Pay Records:- Scrutinize your pay stubs, time sheets, and employment agreements for errors. Ensure that all the hours worked have been logged and that you are compensated accordingly for any overtime or other form of eligible compensation.
- Speak to HR or Management:- If comfortable with doing so, discuss the issue with your supervisor or HR department. They are not aware of this discrepancy, and it could be resolved internally.
- File a Complaint with the TWC:- If the issue persists, you can now refer your case to the Texas Workforce Commission (TWC). Make sure to file the complaint within 180 days of the wage violation.
- Legal Advice:- Seek the employment attorney for complicated matters. An employment attorney can walk you through the process, rights, and even claim unpaid wages.
What Future Texas’ Minimum Wage Holds?
The future of the minimum wage in Texas is not certain since it has not risen above the federal minimum of $7.25 per hour since 2009. Historically, Texas lawmakers have opposed increasing it, arguing that the decrease in the minimum wage will negatively impact businesses, most small ones included.
However, there is momentum nationwide for higher wages, which has driven some local governments in Texas to consider independent measures. The state’s policy is more focused on curtailing cities from setting their own minimum wage.
If the proposal passes through Congress, it is enforced throughout the nation, including Texas. Wage proponents in Texas over the years have promoted raises incrementally, such as to $10 and even $15 an hour, but state legislative bills haven’t moved much toward adding onto the minimum wage in Texas.
Other workforce trends are also fueling calls for higher wages in Texas. Increasing inflation boosts the cost of living and decreases the pressure on employer demand for workers, making many Texas employers already pay starting wages above $7.25 to attract and retain staff. Presumably, if it continues, the market rate for entry-level positions may force an effective “minimum wage” increase in the state, even without legislative action.
However, as economic conditions continue to change, further pressure might build, not only from labor groups and the voters of Texas but from the public at large. While there is opposition in the form of a minimum wage increase that would apply state-wide, changing public opinion and shifting economic factors may yet come into play to influence future legislature deliberations.
Frequently Asked Questions
1. What is the Minimum Wage in Texas For 2024?
As of 2024, Texas minimum wage remains at $7.25 per hour since 2009.
2. What is the Texas Minimum Wage For 2023?
Texas’ minimum wage for 2023 is the same as for 2024, $7.25 per hour.
3. Will Texas’ Minimum Wage Increase in 2024?
There is no probable incrementation of the Texas minimum wage in 2024. There is no announced increase unless state legislation is passed.
4. How Does the Texas Minimum Wage Compare to the Federal Minimum Wage?
The minimum wage in Texas is the same as the federal minimum wage, which stands at $7.25 an hour in 2024.
5. Who is Exempted From Minimum Wage Law in Texas?
The minimum wage law does not cover all of its employees. Federal employees, small business employees, agricultural workers, domestic service workers, student learners, and trainee workers are types of employees exempted from minimum wage laws.
6. What are the Consequences of Failure to Pay Minimum Wage in Texas?
Those employers who are not paying the minimum wage will be litigated upon, penalized and ordered to pay back wages to the employees concerned.
7. How Do Texas Employees Report Minimum Wage Violations?
Employees can file a complaint through the Texas Workforce Commission (TWC) or file a complaint through the US Department of Labor.
8. Are There Any Other Cities in Texas Paying the Higher Minimum Wage?
Some cities in Texas already have a municipal minimum wage ordinance, while most of the cities follow the state minimum wage with $7.25.
9. To What Extent Does the Minimum Wage Influence the Cost of Living Within Texas?
The purchasing power of the minimum wage highly influences the cost of living in urban areas, where the living costs are much higher.
