Texas minimum wage…
Why does it garner so much interest when the rate hasn’t changed since 2009?
The Lone Star State, like about 20 other states in the U.S., still follows the federal minimum wage. As of March 2023, the Texas minimum wage rates are:
- $2.13 (tipped employees)
Still, it is worth exploring the potential reasons why so many people are curious about minimum wage in Texas.
Minimum Wage Management. Simplified.
Texas Minimum Wage
There are likely several reasons Texas minimum wage generates so much attention. Let’s examine a few possibilities.
First, the state is home to the most minimum wage employees in the country. Hundreds of thousands of Texans earn minimum wage, which certainly contributes to the number of people who wonder about the rate.
It is also worth noting that Texas is the second-largest economy in the U.S. behind California, and it is among the leaders of states with the most Fortune 500 companies.
However, Texas lawmakers have introduced new minimum wage legislation in the past. A bill in 2021 gained some momentum in the legislature but never went anywhere. And it appears there is no clear path toward a new minimum wage bill in Texas anytime soon.
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Minimum Wage in Austin, Dallas, Houston, San Antonio…
But for employers, perhaps the reason for the robust interest in Texas minimum wage could be the relatively recent happenings with paid sick leave laws in three major cities.
Austin, Dallas and San Antonio a few years ago passed paid sick leave laws. They were all similar in nature. And all three were ultimately struck down by the courts.
Officials decided the ordinances ran afoul of the Texas minimum wage law, deciding these regulations required employers to pay a higher rate than the state minimum wage and conflicted with the Texas Constitution.
This, of course, had sweeping ramifications for employers and set the course for Texas over the past few years. While paid leave laws continue to grow in jurisdictions across the U.S., local legislators in Texas appear to be hamstrung by the courts in terms of new laws.
Paid Leave Management. Simplified.
Meanwhile, other provisions of the Texas minimum wage law include:
- The Texas Minimum Wage Act does not prohibit employees from bargaining collectively with their employers for a higher wage
- With specified restrictions, employers may count tips and the value of meals and lodging toward minimum wage
- An employer does not need to pay an employee who lives on the business premises for on-call time in addition to assigned working hours
- Under certain conditions, an employer may pay a subminimum wage to an employee who is a patient or client of the Texas Department of Mental Health and Mental Retardation, or to other individuals due to age or to productivity impairments
Also, simply for clarity, there are no cities in Texas with their own minimum wage laws.
2023 State Minimum Wage Rates
Minimum Wage in the U.S.
Despite the inactivity regarding Texas minimum wage, the tide of new laws across the U.S. continues unabated.
With the federal minimum wage unchanged in more than a decade, more jurisdictions have passed these types of laws over the past several years.
But the latest development is a shift from scheduled rates, which employers can more easily plan for, to indexed rates, as will be the case for minimum wage in Oregon in July 2023. And jurisdictions sometimes announce updated rates only weeks before their effective date, creating additional challenges for employers that operate across the U.S.
Also, there has also been a rise of industry-specific rates, especially in places like California (notably for hotel and healthcare employees), which adds another layer to the employment law compliance puzzle.
Minimum Wage Compliance Resources
Finally, as mentioned above, there are several states that still go by the federal minimum wage. They are:
- North Carolina
- North Dakota
- New Hampshire
- South Carolina
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While Texas minimum wage follows the federal rate, like many of the other states in the area, it is interesting to see the interest it garners from people who continually monitor its rate.