Texas Minimum Wage 2026: Why It Matches Federal ($7.25/Hour Explained)

The Texas minimum wage is $7.25 per hour in 2026, exactly matching the federal minimum wage. Texas has no state minimum wage higher than federal law, and state law prohibits cities and counties from setting their own local minimum wages.

Unlike California, New York, and many other states that have raised their minimums to $15 or higher, Texas follows the federal floor set by the Fair Labor Standards Act (FLSA). This makes Texas one of 20 states with the lowest possible minimum wage.

Understanding why Texas minimum wage equals federal law—and what this means for workers—is important for knowing your rights.

Texas Minimum Wage: The Current Rate

2026 Rates

Regular employees: $7.25 per hour

Tipped employees: $2.13 per hour (base wage)

• Employer must ensure tips bring total to $7.25/hour
• If tips don't reach $7.25/hour, employer must make up the difference

Youth minimum wage: $4.25 per hour

• Only for employees under 20 years old
• Only for first 90 consecutive days of employment
• After 90 days, must receive full $7.25/hour

These rates have not changed since 2009, when the federal minimum wage last increased.

Why Texas Minimum Wage Equals Federal

Texas Has No Separate State Minimum

Texas law does set a state minimum wage, but it's written to automatically match the federal rate.

Texas Labor Code § 62.051 states:

"An employer shall pay to each employee the federal minimum wage under Section 6, Fair Labor Standards Act of 1938."

This means:

• Texas doesn't set an independent minimum wage rate
• Whatever the federal minimum is, that's what Texas employers must pay
• If federal minimum increases, Texas increases automatically
• If federal minimum stays the same, so does Texas

Why Texas Hasn't Raised Its Minimum

Texas is a conservative, employer-friendly state. The state legislature has consistently rejected efforts to raise the minimum wage above federal levels.

Arguments against raising Texas minimum:

• Would hurt small businesses
• Could lead to job losses
• Market should set wages, not government
• Federal minimum is sufficient

Arguments for raising Texas minimum:

• $7.25/hour has not increased since 2009
• Adjusted for inflation, minimum wage has lost significant purchasing power
• Full-time work at $7.25/hour ($15,080/year) is below poverty line for a family
• 29 states plus D.C. have higher minimums than federal

Regardless of political views, the fact remains: Texas follows federal law only, providing no additional wage floor protections.

Federal vs. Texas: How States Differ

Three Categories of State Minimum Wages

1. States with minimums HIGHER than federal

• 29 states + Washington D.C.
• Examples: California ($16/hour), New York ($15-16/hour), Washington ($16.28/hour)
• Workers receive the higher state rate

2. States matching federal minimum

• 20 states including Texas
• Workers receive $7.25/hour
• No additional state protections

3. States with NO state minimum or lower minimums

• 5 states (Wyoming, Georgia, etc.)
• Federal law preempts and workers still get $7.25/hour under FLSA
• Only workers not covered by FLSA might receive less (extremely rare)

Texas falls in category 2: Matches federal but provides no additional increase.

What This Means for Texas Workers

If you work in Texas, your minimum wage is determined by federal FLSA, not stronger state law.

Comparison:

Texas workers earn less than half what workers in high-minimum-wage states earn for the same hours.

Local Minimum Wages: Texas Prohibits Them

State Preemption Law

Unlike states like California where cities can set higher minimums (e.g., San Francisco at $18.07/hour), Texas law prohibits local minimum wage ordinances.

Texas Local Government Code § 109.001 prevents cities and counties from:

• Setting minimum wage rates higher than state/federal
• Requiring employers to provide paid sick leave
• Mandating scheduling requirements
• Imposing most employment regulations beyond state law

This means:

• Austin cannot set a $15/hour minimum
• Dallas cannot require higher wages
• Houston cannot mandate local wage increases
• No Texas city or county can exceed state/federal minimums

Why This Matters

Even if a city council wants to raise wages locally, state law blocks it.

Example: In 2014, Austin voters approved paid sick leave requirements. The Texas Supreme Court struck it down in 2018, ruling cities cannot regulate wages and benefits beyond state law.

This makes Texas workers dependent entirely on state and federal action for wage increases—and both have been stagnant since 2009.

Tipped Minimum Wage in Texas

The Tip Credit System

Texas allows employers to pay tipped employees as little as $2.13 per hour using the federal "tip credit" system.

How it works:

1. Employer pays tipped employee $2.13/hour (base wage)
2. Employee receives tips from customers
3. Tips + base wage must equal at least $7.25/hour
4. If tips don't reach $7.25/hour, employer must pay the difference

Example:

• You work 40 hours at $2.13/hour base = $85.20
• You earn $150 in tips
• Total: $85.20 + $150 = $235.20
• Minimum required: 40 hours × $7.25 = $290
• Employer owes you additional $54.80 to reach minimum wage

Who Qualifies as a Tipped Employee

You're considered a "tipped employee" if:

• You customarily and regularly receive more than $30/month in tips
• Your job involves direct customer service where tipping is standard

Common tipped positions:

• Servers and waitstaff
• Bartenders
• Bussers (in some cases)
• Delivery drivers
• Valets
• Hairstylists and barbers

Employer Requirements for Tip Credit

Employers can only use the tip credit if they:

1. Inform employees of the tip credit system before using it
2. Pay the difference if tips don't bring employee to $7.25/hour
3. Don't require tip pooling with non-tipped employees (managers, cooks, dishwashers)
4. Let employees keep all tips (except lawful tip pools among tipped workers)

Common Violations

Illegal practices:

• Keeping any portion of employee tips
• Requiring tipped employees to share tips with managers or owners
• Not making up the difference when tips fall short of minimum wage
• Including non-tipped workers (cooks, dishwashers) in tip pools
• Taking "tip credits" without informing employees

Example: You work 30 hours and earn $2.13/hour ($63.90) plus $100 in tips (total $163.90). Minimum wage for 30 hours is $217.50. Your employer must pay you an additional $53.60. If they don't, they're violating minimum wage law.

Who Must Receive Minimum Wage

Covered Employees

The federal FLSA minimum wage applies to:

1. Employees of businesses with $500,000+ in annual revenue
2. Employees engaged in interstate commerce (most workers)
   • Using phones/internet to contact out-of-state customers
   • Handling goods that moved across state lines
   • Working for companies that do business across state lines

In practice, almost all Texas workers are covered by federal minimum wage because interstate commerce is broadly defined.

Common Exemptions

These workers may not be entitled to minimum wage:

• Independent contractors (if properly classified)

  • Must be truly independent, not misclassified employees

• Outside salespeople

  • Primary duty is making sales away from employer's place of business

• Certain agricultural workers (small farm exemption)

• Newspaper delivery workers

• Casual babysitters and companions for elderly/disabled

Important: Many workers told they're "exempt" or "independent contractors" are actually employees entitled to minimum wage. Misclassification is common and illegal.

What to Do If You're Paid Below Minimum Wage

Step 1: Calculate Your Effective Rate

For hourly workers:

• Total pay ÷ total hours = effective hourly rate
• Must be at least $7.25/hour

For tipped workers:

• (Base wage + tips) ÷ total hours = effective hourly rate
• Must be at least $7.25/hour

For salaried workers:

• Weekly salary ÷ hours worked that week = effective hourly rate
• Must be at least $7.25/hour (for non-exempt employees)

Example: You're paid $250/week salary and work 40 hours.

• Effective rate: $250 ÷ 40 = $6.25/hour
• This is below minimum wage (unless you're properly classified as exempt from minimum wage, which is rare)

Step 2: Document Everything

Gather evidence:

• Paystubs showing pay rate and hours
• Timesheets or time clock records
• Your own log of hours worked
• Communications about pay (emails, texts)
• Employment contract or offer letter

Keep records of:

• All hours worked (including off-the-clock work)
• All pay received
• Tips earned (for tipped employees)
• Any illegal deductions that bring pay below minimum

Step 3: Report the Violation

U.S. Department of Labor (Wage and Hour Division):

• Website: dol.gov/agencies/whd
• Phone: 1-866-4-USWAGE (1-866-487-9243)
• File online complaint
• DOL investigates and can order back pay

Texas Workforce Commission:

• Can help with payment timing issues
• Cannot handle minimum wage violations (federal only)
• File with DOL instead

Private lawsuit:

• Hire an employment attorney
• Sue for back pay, liquidated damages, and attorney fees
• FLSA allows recovery of double damages plus legal fees

Step 4: Understand Your Rights

You can recover:

• Back pay (difference between what you were paid and minimum wage)
• Liquidated damages (equal to back pay—doubles recovery)
• Attorney fees (employer pays if you win)

Example: You were paid $6/hour for 6 months (instead of $7.25).

• Hours worked: 26 weeks × 40 hours = 1,040 hours
• Shortage: $1.25/hour × 1,040 hours = $1,300
• Liquidated damages: $1,300
• Total recovery: $2,600 plus attorney fees

Step 5: Protect Against Retaliation

It's illegal for employers to retaliate for:

• Complaining about wages below minimum
• Filing a minimum wage complaint
• Cooperating with DOL investigation

Retaliation includes firing, demoting, cutting hours, or hostile treatment. Document and report immediately.

Special Situations

Deductions That Bring Pay Below Minimum Wage

Employers cannot make deductions that bring your pay below $7.25/hour, even if you agree to them.

Illegal deductions:

• Uniforms or tools required for the job
• Cash register shortages
• Broken equipment
• Customer walkouts

Example: You earn $7.25/hour and work 40 hours ($290). Your employer deducts $50 for a required uniform. Your effective rate drops to $6.00/hour ($240 ÷ 40). This is illegal.

Training Wages

There is no "training wage" below minimum wage for adults in Texas (except the 90-day youth minimum for workers under 20).

If your employer pays you less during training, they're violating the law.

Unpaid Trial Shifts or "Working Interviews"

Employers must pay minimum wage for all work performed, including trial shifts, working interviews, or "auditions."

Example: A restaurant has you work a full shift to "see if you're a good fit" but doesn't pay you. This is illegal. All time worked must be paid at least minimum wage.

Comp Time Instead of Wages

Private employers cannot give comp time instead of wages for hours worked.

You must be paid in actual money for all hours worked. Comp time (time off instead of pay) is only allowed for some government employees.

Minimum Wage vs. Living Wage

The Gap

Minimum wage: $7.25/hour = $15,080/year full-time

Federal poverty line (2026):

• Individual: $15,060
• Family of 2: $20,440
• Family of 3: $25,820
• Family of 4: $31,200

Full-time minimum wage work barely exceeds the poverty line for one person and falls well below poverty for families.

Living Wage Estimates for Texas

MIT's Living Wage Calculator estimates living wages needed in Texas:

Single adult: $14-16/hour (depending on county) Adult with 1 child: $28-32/hour Two working adults with 2 children: $18-20/hour each

Minimum wage ($7.25) is less than half the living wage needed for basic expenses in most Texas cities.

Will Texas Minimum Wage Increase?

Current Status

As of 2026, there are no active proposals to raise Texas minimum wage at the state level.

Federal proposals:

• Various bills in Congress to raise federal minimum to $15/hour
• None have passed
• If federal minimum increases, Texas would automatically follow

Local efforts:

• Cities cannot raise their own minimums due to state preemption
• Some advocacy groups push for state legislation, but it has not gained traction

What Would Trigger an Increase

Texas minimum wage would increase if:

1. Federal minimum wage increases (Texas automatically follows)
2. Texas Legislature passes state increase (unlikely in current political climate)

Given legislative priorities, most observers don't expect a Texas increase in the near future unless federal law changes.

Frequently Asked Questions

What is the minimum wage in Texas in 2026?

$7.25 per hour for regular employees. This matches the federal minimum wage. Texas has no higher state minimum wage and hasn't increased since 2009.

Can Austin or Dallas set a higher minimum wage?

No. Texas law prohibits cities and counties from setting local minimum wages higher than state or federal law. All Texas cities must follow the $7.25/hour federal minimum.

What is the minimum wage for tipped employees in Texas?

$2.13 per hour base wage, but tips plus base wage must equal at least $7.25/hour. If your tips don't bring you to $7.25/hour, your employer must pay the difference.

Can my employer pay me less than minimum wage during training?

No, unless you're under 20 years old and in your first 90 days (youth minimum is $4.25/hour). All other employees must receive at least $7.25/hour from day one, including during training.

What if I'm paid salary—does minimum wage apply?

Yes. Divide your weekly salary by hours worked. If the result is below $7.25/hour, your employer is violating minimum wage law (unless you're truly exempt, which is rare and requires meeting specific tests).

How do I report minimum wage violations in Texas?

File a complaint with the U.S. Department of Labor at dol.gov/agencies/whd or call 1-866-4-USWAGE. Minimum wage is a federal issue, so file with DOL, not Texas Workforce Commission.

Related Topics

• Texas Wages and Hours Overview
• Can Employer Not Pay Overtime Texas
• Texas Payday Law Explained
• Statute of Limitations Unpaid Wages Texas
• Unpaid Overtime Calculator Texas

Take Action

If you're being paid below $7.25/hour (or below $7.25/hour effective rate including tips), your employer is breaking federal law.

File a complaint:

• U.S. Department of Labor: dol.gov/agencies/whd or call 1-866-4-USWAGE
• Employment Attorney: Especially if you're owed significant back pay

Document your hours and pay, calculate what you're owed, and don't wait. You have 2-3 years to file federal wage claims.

Legal Disclaimer

This article provides general information about minimum wage laws in Texas and is not legal advice. Minimum wage law can involve complex situations including tip credits, exemptions, and proper classification. If you believe you're being paid below minimum wage, consult an employment attorney or contact the U.S. Department of Labor. Filing deadlines apply—don't delay seeking help.