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Like all states, the state of Texas requires employers and employees to abide by certain labor laws, which govern issues such as minimum wage, overtime payments, meals and breaks, harassment, child labor and discrimination. In addition, employers in the state of Texas are also subject to all federal labor laws. In order to ensure ongoing compliance with these laws, Texas employers need to be aware of all current state and federal regulations, as well as any changes going into effect in the future. Below is some information about Texas labor laws in 2020. 

About Texas Labor Laws

  • Minimum wage: During 2020, the minimum wage in Texas is set at $7.25 per hour. 
  • Texas payday law: Texas requires employers to designate paydays that comply with state law. Employees who qualify as professional, administrative or executive under federal law must be paid at least once per month. All other employees must be paid at least twice per month. 
  • Earnings statements: Texas requires employers to issue earnings statements to employees, which include the employee’s name, hours worked, rate of pay, all deductions and net pay.

Texas does not have any state laws that apply to overtime pay, meals and breaks or severance pay. Texas does not have any state-specific discrimination laws, either. However, all federal laws apply in Texas. 

Federal Labor Laws

In addition to state laws, employers in Texas must also comply with:

  • Federal minimum wage: Under federal law, employers must pay hourly employees at a rate of at least $7.25 per hour. 
  • Child labor: The maximum work hours for children under the age of 16 are restricted by federal law. 
  • Overtime pay: Employees who work in excess of 40 hours in a work week must receive overtime pay at a rate of at least 1.5 times their regular wage for all overtime hours worked. 
  • Overtime exemptions: Certain employees who earn a salary are exempt from mandatory overtime pay. Employees may qualify as exempt for this purpose if they earn at least a minimum salary and satisfy other specific requirements. Most employees who are exempt can be categorized as professionals, executives or administrators. 

Important Changes

The state of Texas has not announced any significant changes to labor laws for the upcoming year. However, one significant change to federal labor laws has already been announced: the change relates to exemptions from overtime pay for salaried employees. Before this change, the “standard salary level” required to classify someone as a salaried employee was $455 per week. This threshold has been raised to $684 per week for 2020. The total annual compensation requirement applying to “highly compensated employees” has also increased from $100,000 to $107,432. Finally, the Department of Labor will now allow employers to use incentive payments and non-discretionary bonuses to satisfy a maximum of 10 percent of standard salary levels. 

Keeping your company compliant with all applicable labor laws can be daunting. Fortunately, by working with a Professional Employer Organization, you can make this task much easier. Please contact us today to learn more about the benefits of working with a PEO. 


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