Wage law violations are among the most common triggers for audits and lawsuits. Your employees deserve fair compensation, and when errors occur, they can erode trust and employee morale.
Texas wage and hour laws are unique and can differ from those of surrounding states. For example, the state does not have a separate minimum wage law—it instead follows federal regulations. This means Texas businesses must stay up to date with both federal wage requirements and any evolving Texas-specific rules.
To help businesses avoid mistakes in payroll, let’s walk through the most important things to know about Texas wage laws and what they mean in practice.
Currently, the minimum wage in Texas is $7.25 per hour, which aligns with federal law. If the federal minimum wage increases, the Texas minimum would rise accordingly.
There are exceptions. Businesses can offer different pay rates to tipped employees, minors, and trainees. For more detail on how wage structures differ by role, see our Texas Minimum Wage Business Guide.
Many organizations voluntarily pay above the legal minimum to promote retention and show employees they’re valued. Offering only the minimum wage can lead to high turnover, especially among high-performing employees—potentially disrupting operations and damaging morale.
Texas follows the Fair Labor Standards Act (FLSA) when it comes to overtime: nonexempt employees must receive time-and-a-half pay for hours worked over 40 in a week.
However, errors often arise when employers assume that salaried workers are automatically exempt. In reality, exemption depends on both job duties and salary thresholds. You can explore how these misclassifications affect Texas employers in Texas-Specific HR Policies.
To maintain compliance, Texas employers should keep complete records, including:
Best practice is to retain these records for at least four years after employment ends.
Texas law requires that employees be paid at least twice per month. Businesses may use direct deposit, paper checks, or pay cards.
Final paycheck timing depends on how the employment ends:
For more compliance timelines and HR strategies, read HR Solutions for Texas Industries.
Some deductions, such as Social Security and wage garnishments, are legally required. Others—like costs for uniforms, tools, or damaged property—require written authorization under the Texas Payday Law.
Even with permission, deductions must not reduce pay below minimum wage or overtime requirements. Employers should be cautious and consult legal or payroll professionals before making business-related deductions.
The Texas Payday Law, enforced by the Texas Workforce Commission (TWC), governs how and when employees must be paid. Employees can file complaints with TWC if wages are unpaid—but only within 180 days of the missed payment date.
If an employer files for bankruptcy, employees must pursue claims through bankruptcy court instead.
To reduce risk, many Texas employers choose to work with a trusted payroll provider. At Affiliated Payroll, our team stays current with federal and state law so you don’t have to.
Avoid costly mistakes and employee complaints. Partner with Affiliated Payroll for compliant, efficient payroll and HR support built for Texas businesses.