Texas has relatively few state labor laws and regulations, so businesses in Texas often need to defer to federal employer laws to understand what’s required of them.
If you’re a business owner in Texas, here are a few important requirements for minimum wage, overtime, and sick leave.
Texas Minimum Wage
The minimum wage for Texas is currently set at $7.25. The Texas State minimum wage is adopted from the federal minimum wage rate.
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Texas Overtime Laws
Texas relies on federal overtime law, as determined by the Fair Labor Standards Act (FLSA).
By federal law, a covered, nonexempt employee is entitled to compensation for overtime. The federal overtime provisions contained in the FLSA require an employee receive overtime pay for hours worked over 40 hours in a workweek.
Employees can be covered by the FLSA in two ways:
By working for a business or organization, who employs at least two employees, and whose annual dollar volume of sales or business done are at least $500,000; or hospitals, businesses providing medical or nursing care for residents, schools and preschools, and government agencies.
If the employee’s work regularly involves commerce between states (“engaged in commerce or in the production of goods for commerce”).
Texas Sick Leave
Currently there is no Texas state legislation that makes giving employees paid sick leave a mandatory requirement for employers.
However, as stated in the federal Emergency Paid Sick Leave Act, covered employers may provide employees up to two weeks (80 hours, or a part-time employee’s two-week equivalent) of emergency paid sick leave, which can only be used for specified reasons related to COVID-19.
The rate of pay for this leave varies depending on the reason for its use.
The leave pay should be the employee’s regular rate of pay, as determined under section 7(e) of the Fair Labor Standards Act of 1938, if the employee is unable to work due to any of the following:- Being quarantined by order of the federal, state or local authority, or at the advice of a health care provider.- Experiencing symptoms of COVID-19 and seeking a medical diagnosis.- Being tested or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19 due either to exposure or employer request (valid only after April 1, 2021).- Obtaining immunization for COVID-19 or recovering from any injury, disability, illness or condition related to such immunization (valid only after April 1, 2021).
The leave pay should not be less than two-thirds the employee’s regular rate of pay, as determined under section 7(e) of the Fair Labor Standards Act of 1938, if the employee is unable to work for any of the following reasons:- A legitimate need to care for an individual subject to quarantine ordered by the federal, state or local authority, or at the advice of a health care provider.- Caring for a child under 18 whose school or child-care provider is closed or unavailable for reasons related to COVID-19.- Experiencing a substantially similar condition as specified by the secretary of Health and Human Services, in consultation with the secretaries of the Treasury and Labor.
Since December 31, 2020, employers are no longer required to provide employees with FFCRA leave, but employers who choose to provide such leave between January 1, 2021 and September 30, 2021 may be eligible for employer tax credits. Effective April 1, 2021, covered employers may claim tax credits for up to ten days (80 hours) of Emergency Paid Sick Leave.
Start or Grow a Business in Texas
If you’re starting a business in Texas, or trying to scale your operations, make sure you have a strategy for attracting new hires, managing back-office administrative tasks, and keeping compliant with state labor laws and regulations. It pays to offer competitive employee benefits packages, run payroll with flexible payroll software, and take care of business due diligence with necessary compliance support for your employer-related needs.
Learn how Justworks helps small businesses run with confidence.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.