Texas MINIMUM WAGES

Texas State Minimum Wage for 2025

The state of Texas has been following the federal minimum wage rate since 2009. Hence, the minimum wage rate stands at $7.25 per hour for all nonexempt employees. 

However, according to the Texas Minimum Wage Act, employees are allowed to bargain with their employers to get a higher per-hour rate. All cities in Texas follow the same minimum wage rate and have no independent laws regarding it.  

The overtime pay remains at 1.5 times the regular per hour rate for all hours worked beyond 40 hours in a week.  

Minimum Wages in Texas Cities

In Texas, the tipped minimum wage of $2.13 per hour and non-tipped minimum wage of $7.25 per hour applies across all the cities. Here is a breakdown of the top 30 cities: 

Threshold For Employees Exempt

The Fair Labor Standards Act (FLSA) categorizes workers into two main classifications that determine their wage and overtime requirements: 

• Non-exempt employees must be paid at least the minimum wage ($7.25 for Texas). They qualify for overtime pay at 1.5 times their regular hourly rate when working more than 40 hours per week. These typically include hourly workers and lower-salaried positions. 

• Exempt employees are not affected by minimum wage as long as they receive a minimum annual salary of $43,888 ($844/week). They are not entitled to overtime pay regardless of hours worked. 

Exempt employees usually include professional, executive, and administrative positions. The exempt salary requirements may adjust upward when state minimum wages increase to maintain proper classification distinctions. 

For example, the minimum annual salary for exempt is expected to go up to $1,128 per week, equivalent to $58,656 annually, effective January 1st, 2025. Additionally, the salary threshold for Highly Compensated Employees (HCE) will rise to $151,164 per year.  

Such changes mean that employers must either raise salaries to meet these new minimums or reclassify employees as non-exempt, making them eligible for overtime pay. 

Historical Data of Texas Minimum Wages

In the past, the minimum wage rate in Texas has always aligned with the federal minimum wage rates. Unlike other states like Montana or Missouri, it does not take into account the state-wise Consumer Price Index (CPI) or inflation rates.   

However, recent legislative discussions indicate potential changes, with plans to raise the minimum wage incrementally to $15.00 per hour by 2025.  

The changes in the Texas minimum wages from 1968 to 2023 is illustrated in the table below: 

* – Under the FLSA, the two rates shown in 1968, 1970, and 1976 reflect the former multiple-track minimum wage system in effect from 1961 to 1978.

Source: https://www.dol.gov/agencies/whd/state/minimum-wage/history

Exemptions in Minimum Wages of Texas

Texas follows federal (FLSA) guidelines for minimum wage exemptions. As of 2024, the following employees are exempt from minimum wage requirements: 

1. White collars (must meet salary and duties tests):

• Executives, administrators, and professionals: Must earn at least $844/week ($43,888 annually) 
• Highly compensated employees: Must earn at least $132,964 annually 
• Computer professionals: Must earn either $844/week or $27.63/hour 
• Outside sales representatives 
  • The above salary thresholds will increase on January 1, 2025, and exemption rate will be fixed at $1,128/week ($58,656 annually) for standard employees and $151,164 annually for Highly Compensated Employees. 

2. Agricultural workers

3. Seasonal amusement/recreational employees

4. Small newspaper employees

5. Certain student workers and apprentices

6. Babysitters and companions for the elderly

7. Family members working in family businesses