If you work or run a business in Texas, it’s crucial to stay up to date. In this 2025 Guide to Understanding Texas Labor Laws, we’ll walk you through the big rules, what’s changed, and how to stay on the right side of the law. Use this as your roadmap to Texas labor compliance and worker rights.
What This 2025 Guide to Understanding Texas Labor Laws Covers
- Minimum wage and tipped wage rules
- Overtime, exemptions, and salary thresholds
- Child labor and youth work rules
- Pay practices, wage claims, and payday law
- New 2025 updates you must know
- Enforcement, compliance, and employer requirements
Minimum Wage, Tipped Wage & State vs. Federal Standards
Texas does not have a state-specific minimum wage. Instead, Texas follows the federal minimum wage of $7.25 per hour.
For tipped employees, the base wage is $2.13 per hour plus tips, as long as total compensation meets $7.25 per hour.
Local governments in Texas cannot impose higher minimum wages for private employers.
Because Texas defers to federal law on wage issues, many rules (like overtime) are governed by the Fair Labor Standards Act (FLSA).
Overtime, Exemptions & Salary Thresholds in 2025
Overtime rules in Texas are controlled by FLSA, meaning non-exempt employees must be paid 1.5× their regular rate for hours worked over 40 in a workweek (unless a valid exemption applies).
Salary-level thresholds and the “Overtime Rule”
In 2024, the Department of Labor (DOL) introduced an “Overtime Rule” raising the salary threshold for exempt (white-collar) workers.
Under that rule:
- July 1, 2024: threshold would rise to $43,888 annual salary.
- January 1, 2025: threshold would rise to $58,656 (i.e. $1,128 per week).
However, a federal judge in Texas struck down the rule (nationwide), vacating those increases. That means employers may continue using pre-rule salary thresholds for classifying exempt vs. nonexempt workers.
Also relevant: the threshold for “highly compensated employees” would have risen under the rule (e.g. $151,164 annual), but that increase is also vacated.
Because of legal uncertainty, many employers and practitioners are watching for appeals or new rulemaking.
Thus: in 2025, be careful in classifying and do not rely on the new thresholds yet; use existing (pre-rule) standards until rules are settled.
Child Labor & Youth Work in Texas
Texas has both federal and state child labor protections. The Texas Workforce Commission (TWC) handles enforcement of state child labor rules.
Key rules include:
- It is illegal for children under 14 to be employed in most work, with few exceptions.
- There are limits on hours, times of day, and types of work for minors (e.g. no hazardous jobs).
- Texas also prohibits work that interferes with a child’s education.
- In some settings, youth cannot work between midnight and 5 a.m. before a school day or during summer break.
- Maximum daily work may be limited (e.g. no more than 8 hours in a day).
If you employ minors, you need to know both the federal and state rules, and ensure you have necessary permits or approvals where required.
Pay Practices, Payday Law & Wage Claims
Texas Payday Law
Texas has a Payday Law which ensures employees receive wages on the scheduled paydays. If you believe you are owed wages, you can file a wage claim through the Texas Workforce Commission.
If the TWC rules on a claim and you disagree, you may appeal that decision (within deadlines).
Employers must comply with wage payment rules, maintain proper records, and cannot withhold wages unlawfully.
Posting Notices & Required Posters
Employers are required to display certain workplace notices and posters in a conspicuous place, so employees are aware of rights and obligations.
From January 8, 2024, Texas employers must also post a “Reporting Workplace Violence” notice (in English and Spanish).
Other required posters include the Texas Payday Law, Unemployment & Payday combined poster (where applicable), and notices about child labor and wage claims.
New 2025 Changes & Developments You Must Know
In 2025, several changes and proposals are reshaping the Texas labor landscape. Here are some of the most important ones in this 2025 Guide to Understanding Texas Labor Laws:
“Ban the Box” — Criminal History in Hiring
Effective September 1, 2025, Texas employers cannot ask about criminal history on the initial job application. You can still run background checks later, but the first application cannot include those questions.
Worker Classification & Gig Economy Focus
Texas’s TWC has issued updated guidance about properly classifying workers as independent contractors versus employees. Misclassification can lead to penalties, back pay, and liability under both state and federal law.
Enhanced OSHA & Workplace Safety Enforcement
In 2025, Texas employers should expect increased scrutiny of workplace safety and compliance with OSHA (or state equivalents).
Legislation & Bills to Watch
- In the 2025 Texas legislative session, there are about 25 labor-related bills under consideration.
- In particular, some bills address expanding E-Verify requirements for employers (though an expansion failed recently).
- The governor signed multiple bills affecting employment and business operations during the 2025 session.
Keep an eye on law changes, because even if they are passed, they often include future effective dates or implementation rules.
Enforcement, Compliance & Practical Tips
To make sure you or your business is following the 2025 Guide to Understanding Texas Labor Laws, here are practical steps:
- Review current policies — Check pay, overtime classification, timekeeping, and recordkeeping practices.
- Train HR and management — Ensure hiring, pay, and termination procedures reflect the law.
- Update job applications — Remove criminal history questions for initial applications by September 1, 2025.
- Post required notices — Ensure all posters (e.g. Payday Law, Reporting Workplace Violence) are current and visible.
- Monitor legislation — Many 2025 bills will have delayed effective dates or be challenged in court.
- When in doubt, lean toward compliance — Particularly around classification, wage claims, or overtime.
- Seek legal advice — If your business deals with complex exemptions, contractors, or cross-state operations, get help.
Final Thoughts
This 2025 Guide to Understanding Texas Labor Laws gives you a foundation to know your rights and responsibilities in Texas workplaces. The key takeaways:
- Texas defers to the federal minimum wage ($7.25/hr) and same overtime rules via FLSA.
- The DOL’s proposed higher overtime salary thresholds were vacated by court, so they do not apply as of now.
- Child labor, wage claims, and payday law are enforced at state level via TWC.
- New 2025 changes like “Ban the Box” (no criminal history questions initially) and increased scrutiny on worker classification are coming.
- Compliance requires staying updated, training staff, and reviewing your policies regularly.
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