Wage-and-hour ground rules for hotel and hospitality employers in Texas — minimum wage, tipped-employee rules, overtime, breaks, premium pay, and the hotel-specific obligations that apply on top. Figures below were last reviewed on June 12, 2026; most rates adjust annually.

Verified as of June 12, 2026 — every figure on this page was checked against the official sources listed at the bottom on that date. How we verify →

Minimum wage
$7.25
effective July 24, 2009
Tipped cash minimum
$2.13
max tip credit $5.12
Daily overtime
None
None (40-hr week)
Meal / rest breaks
No
meal: Not required · rest: Not required

Minimum wage#

The Texas minimum wage is $7.25 per hour, effective July 24, 2009. Texas Minimum Wage Act adopts the federal FLSA rate by reference (Tex. Lab. Code §62.051), so the state rate is $7.25 and changes only if Congress acts. Local minimum wages for private employers are preempted.

Preemption Texas preempts local minimum wage ordinances — cities and counties cannot set their own general wage floors.

Tipped employees & tip pooling#

Texas allows a tip credit: employers may pay tipped employees a cash wage of $2.13 and claim up to $5.12 per hour in tips toward the minimum wage. Tipped employee = customarily and regularly receives more than $20/month in tips under state law (FLSA uses $30); employer must inform employees of the tip credit and tips plus cash wage must equal $7.25. Tex. Lab. Code §62.052 mirrors the federal tip-credit structure; in practice FLSA rules (notice, 80/20 duties limits under federal guidance, no employer retention of tips) govern Texas hotels.

Tip pooling#

No state tip-pooling statute; FLSA governs — mandatory pools among customarily tipped employees are valid, managers/supervisors excluded, and back-of-house may be included only if no tip credit is taken. (29 U.S.C. §203(m)(2)(B))

See the federal baseline rules in our tip credit and tip pooling briefs — the stricter of federal or Texas law controls.

Overtime#

Overtime is due after 40 hours in a workweek. No state overtime statute for private employers; FLSA 1.5× over 40 applies.

Run the math — including the tipped-overtime trap — with the tipped overtime calculator.

Meal & rest breaks#

Meal breaks: Not required by Texas law for adult employees. Federal law requires only that breaks under 20 minutes, if offered, be paid.

Rest breaks: Not required by Texas law.

Scheduling & premium pay#

  • Reporting-time pay: None required by state law.
  • Split-shift premium: None.
  • Spread of hours: None.

Service charges & gratuities#

Texas has no service-charge-specific statute — the federal tip/service-charge line (and IRS treatment) controls. Background: service charges, auto-gratuities & resort fees.

Pay administration#

  • Pay frequency: Texas Payday Law: employees not exempt under FLSA must be paid at least SEMIMONTHLY; FLSA-exempt employees may be paid monthly (Tex. Lab. Code §61.011). Paydays must be designated and posted; wage claims go to TWC.
  • Wage statements: Written earnings statement required each payday showing pay rate, hours/units, gross and net pay, and deductions. (Tex. Lab. Code §62.003)
  • Exempt salary floor: $684.00/week (federal) — Federal $684/week applies (the 2024 DOL increase was vacated by the E.D. Tex. in Nov. 2024).
  • Lodging credit: Reasonable cost of meals/lodging furnished may count toward the minimum wage per FLSA §3(m) standards (voluntary acceptance, primarily for employee's benefit, accurate cost records).

Double-layer preemption: Tex. Lab. Code §62.0515 has long preempted local minimum wages for private employers, and 2023 HB 2127 (the Texas Regulatory Consistency Act, the so-called 'Death Star' law) broadly preempts local ordinances in fields occupied by the Labor Code (e.g., local scheduling, benefits, or rest-break mandates such as Austin/Dallas construction breaks). Litigation status: a Travis County district court declared HB 2127 unconstitutional in Aug. 2023, but a Texas appeals court reversed and upheld the law in July 2025; enforcement suits (e.g., against Dallas, filed Oct.-Nov. 2025) and a likely Texas Supreme Court appeal continue — the law is currently in effect. Hotels remain governed by FLSA on tips, overtime, and minimum wage.

Practitioner's notes: hotels in Texas#

Texas adds almost nothing to federal wage law — and that is the operative fact. The Texas Minimum Wage Act adopts the FLSA rate by reference (Tex. Lab. Code §62.051), so $7.25 and a $2.13 tipped cash wage are the floors, and there is no state overtime, no break mandate, and no local wage ordinance to layer on top. Every compliance dollar therefore goes to executing the federal rules perfectly.

The FLSA is the whole game#

At a $2.13 cash wage, the tip credit does $5.12 of work every single hour, which makes the federal preconditions unforgiving: tip-credit notice before the credit is taken (oral suffices federally; written is the only sane practice), a weekly true-up confirming tips actually covered the credit, full tip retention outside a valid pool, and overtime computed on the full $7.25 — the tipped overtime cash rate is $5.76, not $3.20, and computing it off $2.13 remains the most common violation in Texas hospitality audits. State law mirrors the structure (Tex. Lab. Code §62.052; the state's $20-per-month tipped-employee definition is academic — the FLSA's $30 test and federal rules govern in practice). See tip credit and the tipped overtime calculator.

The Payday Law: TWC is the enforcement channel#

Texas's real state apparatus is procedural. The Payday Law requires employees who are not FLSA-exempt to be paid at least semi-monthly (exempt staff may be paid monthly) on designated, posted paydays, with a written earnings statement each payday showing rates, hours, and deductions (§62.003). Wage claims run to the Texas Workforce Commission on a short 180-day administrative clock — a fast, cheap forum that is dangerous to ignore, because preliminary wage determinations harden into enforceable orders. But the Payday Law does not displace the FLSA: the same shortfall a hotel quietly resolves at TWC can return as a federal collective action with a two- or three-year lookback and liquidated damages. Treat every TWC claim as a free audit prompt — if one banquet server's service-charge share was miscomputed, fifty were.

Preemption: no city wage floors — and HB 2127, carefully#

Two layers of preemption keep Texas a single-rate state. Tex. Lab. Code §62.0515 has long preempted municipal minimum wages for private employers, so there are no Austin, Dallas, or Houston wage floors to track. The 2023 Texas Regulatory Consistency Act (HB 2127, the so-called "Death Star" law) goes further, broadly preempting local ordinances in fields the Labor Code occupies — the canonical casualties being the Austin and Dallas construction rest-break ordinances. Its status deserves precision: a Travis County district court declared HB 2127 unconstitutional in August 2023, but a Texas appeals court reversed and upheld the law in July 2025; enforcement suits (including against Dallas, filed in late 2025) and a likely Texas Supreme Court appeal are still working through the system. The law is currently in effect, and no live municipal wage or scheduling mandate reaches Texas hotels — but the prudent move is a thin monitoring file, not deleting the topic from the compliance calendar.

Why a Texas property still cannot run on autopilot#

Austin, Dallas, and Houston convention hotels run banquet operations as large as any in the country, and the federal rules that bite hardest bite there. FLSA §3(m)(2)(B) bars managers and supervisors from keeping any portion of employee tips, including through a pool — and DOL's FLSA2025-1 opinion letter applies that to anyone meeting the executive duties test, which captures many banquet captains and outlet leads who "help out" in the pool. The federal 80/20 side-work rule is gone — vacated nationwide in August 2024, with the pre-2021 occupation-based text restored that December — but private plaintiffs still plead legacy 80/20 theories, so keep a documented tipped-occupation analysis for borderline roles instead of assuming the issue died. And banquet service charges are wages, not tips, under IRS treatment: distributed shares run through payroll, enter the regular rate for overtime, generate no FICA tip credit, and do not qualify for the federal tips deduction — mislabeling them corrupts both the W-2 and the overtime math at once. See service charges and the regular rate.

Breaks: voluntary, but not unregulated#

Texas requires no meal or rest breaks for adults. Most hotels offer them anyway — and the FLSA regulates whatever you offer. Short breaks of roughly five to twenty minutes must be paid; a meal period may be unpaid only if it runs at least 30 minutes and the employee is completely relieved of duty. A front desk agent eating between check-ins is working; so is a housekeeper who answers a guest call mid-meal. The structural risk is the automatic 30-minute deduction colliding with a 24/7 operation: interrupted meals quietly become unpaid working time at scale. Pair any auto-deduct with a per-shift attestation and a no-fault correction channel, and keep the records — they are the defense. See meal and rest breaks and off-the-clock work.

Official sources#

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