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What is the Minimum Wage in Texas in 2021?

 

The minimum wage in Texas in 2021 is $7.25 per hour, the same as the federal minimum wage in the US [1]. Just like many other states, Texas adopts the differentiation between the lowest wage required to be paid to tipped and non-tipped employees. This means that all tipped employees in Texas have another lowest rate requirement – $2.13 per hour, and Texan employers are allowed to take a tip credit. 

The Minimum Wage in Texas in 2021

To clarify further, for tipped employees who don’t earn enough in tips to reach the federal hourly requirement, employers have to make up for the difference in amounts. Although all tips belong to employees, extra compensation happens a lot in cases where employees are part of a valid tip pool. 

Texas is one of the 20 other states which have the same minimum wage requirement as the federal minimum in 2021. This means the statewide minimum in Texas is the lowest possible rate allowed to be paid to hourly employees in the US. Find out which 19 states have the same lowest hourly rate requirement as Texas by viewing the 2021 minimum wage by state map.

When Will the Minimum Wage Increase in Texas?

 

As of June 2021, there are no active laws that guarantee any upcoming minimum wage increases in Texas. At the same time, there have been a lot of pushes for the change to happen. Some proposals are pushing for the minimum wage in Texas to become $15.00 per hour, the trend that many other states applied to their increase plans. Another frequently brought up discussion is to set local wages for cities like Austin, Houston, and Dallas to make up for the higher cost of living.

The possibility of wage increases in Texas and their schedule will soon be determined if a new Fischer’s bill filed in the House passes the legislative session. This bill proposed at the beginning of 2021 is set to raise the minimum wage in Texas until it hits the goal of $15. Below is the table showcasing the potential schedule for rate increases under this bill.

Minimum Wage Rate Increases in Texas Under the Fischer’s Bill [3]

Potential Effective Date

Potential Minimum Wage Rate

2022
$10.00/hr
2023
$12.50/hr
2024
$14.00/hr
2025
$15.00/hr

Minimum Wage Exemptions in Texas.

 

Non-tipped employees are not the only group of employees exempt from the statewide minimum wage. There are special lowest wage rates applicable to certain types of hourly workers. Below are the categories of employees and the respective legislation that differs from the statewide and federal wage requirements.

Minimum Wage Exemption for Specific Employee Groups [2]

Employee Group

Applicable Minimum Wage Exemption

Employees Under 20
A training wage of $4.25/hr can be paid to employees under 20 years old for the first 90 days of employment.
Students
High school or college students who work part-time may be paid $6.16/hr (as little as 85% of the Texas minimum wage) for up to 20 hrs per week.

What is the History of the Minimum Wage in Texas?

 

Texas hasn’t changed the minimum wage requirement since 2008. At that time, the rate of $6.55/hr got raised to $7.25/hr. On the other hand, the history of the minimum wage in Texas goes back to as early as 1972. Below is the graph that depicts the development of minimum wage laws in Texas compared to the federal minimum from 1972 till today.

The History of the Minimum Wage in Texas (graph)

Interesting Facts about the Minimum Wage in Texas.

DID YOU KNOW?

Texas is one of the states most affected by the minimum wage legislation.

According to the US Bureau of Labor Statistics, less than 3% of workers are paid at or below the minimum wage in Texas, among the highest percentage in the nation. So, any minimum wage legislation affects a large group of Texans.

1

Expected Increases

According to 2019 data from the Economic Policy Institute, around 4.5 million Texas could benefit from the lowest rate increase to $15 per hour.
2

Minimum Wage Awareness

According to the Fair Labor Standards Act (FLSA) and Texas labor law, all employers in Texas are required to showcase an approved Texas minimum wage poster [2]. Thus, all employees are aware of their rights and work expectations.
3

Overtime Compensation

The Fair Labor Standards Act (FLSA) guarantees appropriate overtime compensation for employees who work overtime hours. All employees who are not paid overtime can file a claim with the Texas Department of Labor.
4

Minimum Wage Earnings

As a full-time worker who received minimum wage in Texas, you will be able to earn $58 per day, $290 per week, and $15,080 per year.
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