Texas Wage Theft Laws: Minimum Wage, Overtime, and Final Paycheck Rules

Texas provides fewer state-level wage protections than most large states, relying primarily on federal law. But Texas workers still have real rights — and Texas employers who violate them face consequences under both state and federal law.

Minimum Wage in Texas (2025)

The Texas minimum wage is $7.25 per hour — equal to the federal minimum wage. Texas has not enacted a state minimum wage above the federal floor. Local governments in Texas are preempted by state law from setting higher local minimums, so no Texas city or county may exceed the state rate.

Tipped employees. Texas allows a tip credit of up to $5.12 per hour, meaning tipped employees can be paid as little as $2.13 per hour if tips bring them to $7.25. If tips in any workweek fall short of $7.25 per hour, the employer must make up the difference.

Overtime Pay in Texas

Texas follows federal FLSA overtime rules. Most non-exempt employees are entitled to 1.5 times their regular rate for all hours worked over 40 in a workweek. There is no daily overtime requirement in Texas (unlike California).

Exempt employees. The FLSA exemptions apply in Texas: executive, administrative, and professional employees who earn at least $684 per week on a salary basis may be exempt. As with all states, the exemption depends on actual duties — not just title or salary.

Common violations in Texas. The Texas Workforce Commission reports that the most frequent wage violations involve: failure to pay overtime in the oil and gas industry (where “day rate” and misclassified independent contractors are common), off-the-clock work in retail and food service, and tip credit violations in restaurants.

Final Paycheck Rules in Texas

Penalties. If a Texas employer fails to pay a final paycheck on time without a “bona fide dispute,” the employer may owe the unpaid wages plus damages equal to the greater of the unpaid wages or $1,000, plus court costs and attorney fees. The Texas Payday Law governs these claims and is enforced by the Texas Workforce Commission.

Texas Payday Law

The Texas Payday Law (Texas Labor Code Chapter 61) covers most Texas private-sector employees and provides:

• The right to receive wages on a regular payday schedule
• Protection against illegal deductions from wages (employers generally cannot deduct for uniforms, tools, or cash register shortages unless you have given written authorization)
• The right to file a wage claim if you are not paid what you are owed

Filing a Texas Payday Law claim. File with the Texas Workforce Commission at twc.texas.gov/jobseekers/texas-payday-law. The claim must be filed within 180 days of the date the wages were due. This deadline is strict — missing it permanently bars your TWC claim (though you may still have federal options).

Real Situations: Common Texas Wage Disputes

Oil field misclassification. Workers in the Permian Basin and Eagle Ford Shale are frequently classified as independent contractors and paid a “day rate” with no overtime. Courts have repeatedly found that oilfield workers — drillers, pump operators, floor hands — are employees under the FLSA economic reality test and are entitled to overtime. Recoveries in these cases often run to tens of thousands of dollars per worker.

Off-the-clock in food service. Restaurant employees in Texas are frequently required to attend pre-shift meetings or perform side work before clocking in. Even 15 minutes per shift unpaid adds up: $9.50/hour × 0.25 hours × 5 days × 50 weeks = $594 per year per worker. Multiply by a restaurant crew of 20, and the employer owes $11,880 per year in unpaid wages for that one practice alone.

The salary trap. A Texas employer promotes an hourly worker to “shift supervisor,” puts them on salary, and stops paying overtime. If the employee still performs primarily non-managerial tasks — cleaning, cooking, running a register — the exemption fails and three years of overtime is recoverable.

Common Mistakes Texas Workers Make

Waiting more than 180 days to file a TWC claim. The Texas Workforce Commission’s 180-day deadline is the most common reason valid wage claims are denied. If you believe you are owed wages, file with the TWC immediately — you can always amend your claim if the amount increases.

Accepting the employer’s characterization of contractor status. Many Texas workers accept being called independent contractors without challenging it. If your work schedule is set by the company, you use their equipment, and you perform work central to their core business, you may be an employee under federal law regardless of how your contract reads.

Not knowing about the FLSA parallel option. Even if your TWC claim fails (or the deadline has passed), you may still have a federal FLSA claim with a two-to-three year statute of limitations. The two systems are independent. Filing with the TWC does not waive federal rights.

How to File a Wage Claim in Texas

Option 1 — Texas Workforce Commission (Payday Law). File online at twc.texas.gov. Must be filed within 180 days of the date wages were due. The TWC investigates and can order unpaid wages plus damages.

Option 2 — Department of Labor (FLSA). File with the federal Wage and Hour Division at dol.gov/agencies/whd/contact. No deadline as strict as the TWC; federal FLSA claims have a 2–3 year statute of limitations. The WHD investigates for free and retaliation is prohibited.

Option 3 — Civil lawsuit. You can sue directly in Texas state or federal court. For FLSA claims, you may recover unpaid wages, an equal amount in liquidated damages, and attorney fees.

Statute of Limitations

Related Guides

• Employment Rights Guide — federal wage and overtime rules that apply to Texas workers
• Texas Small Claims Court — sue for unpaid wages up to $20,000 without a lawyer
• Texas Eviction Notice Requirements — tenant protections if wage loss affects your housing
• Texas Security Deposit Laws — your rights as a Texas renter
• Texas Tenant Rights Guide — complete tenant rights guide for Texas renters

This article is for informational purposes only and does not constitute legal advice. Always verify current rules at twc.texas.gov or consult a licensed Texas employment attorney. Last reviewed: March 2026.