Texas follows federal labor law for most things, which means fewer state-specific headaches — but that doesn’t mean you can coast. Tip credits, overtime, and OSHA compliance still catch operators off guard. Here’s what to know.
Compliance Checklist
Verify federal and local minimum wage compliance for all employees.
Ensure accurate calculation and payment of overtime for non-exempt employees.
Maintain meticulous records of hours worked, wages paid, and tips received.
Review and update employee classifications (exempt vs. non-exempt, employee vs. independent contractor).
Clearly communicate tip credit policies and tip pooling arrangements to tipped employees.
Provide required reasonable break times for nursing mothers and adhere to any voluntary break policies.
Post required federal and state labor law posters in a conspicuous place.
Ensure all employees have legally completed and signed necessary hiring documents (I-9, W-4).
Develop and implement clear anti-discrimination and anti-harassment policies.
Review workplace safety procedures and provide necessary training to prevent injuries.
Understand worker’s compensation (or non-subscriber liability) obligations.
Frequently Asked Questions
What is the minimum wage for restaurant employees in Texas in 2026?
Texas follows the federal minimum wage of $7.25 per hour. Some cities, like Austin, may have local ordinances mandating a higher minimum wage. Employers must pay the highest applicable rate.
Do I have to pay overtime to my restaurant staff?
Yes, non-exempt employees must be paid at least 1.5 times their regular rate of pay for all hours worked over 40 in a workweek, according to federal law. Some employees may be exempt based on their job duties and salary.
Can I use a tip credit for my servers in Texas?
Yes, Texas employers can use the federal tip credit. This allows them to pay a minimum cash wage of $2.13 per hour, provided the employee’s tips combined with the cash wage meet or exceed the federal minimum wage of $7.25 per hour. Written notice is required.
Are there state laws requiring meal or rest breaks for restaurant employees in Texas?
No, Texas does not have state-specific laws mandating meal or rest breaks for adult employees. However, federal law requires employers to provide reasonable break time for nursing mothers to express milk.
What are the penalties for wage and hour violations in Texas?
Penalties can be severe, including back wages owed, liquidated damages (double the amount of back wages), civil money penalties, and potential legal fees. For willful violations, penalties can be significantly higher.
How do I properly classify my employees in a restaurant setting?
It’s crucial to correctly classify employees as either exempt or non-exempt from overtime, and as employees versus independent contractors. Misclassification can lead to significant liabilities. Consult DOL guidelines and legal counsel if unsure.
What happens if I don’t have proper worker’s compensation insurance in Texas?
Texas is a non-subscriber state. If you opt out of worker’s compensation, you lose significant legal protections and can be sued by injured employees. You would be liable for medical expenses, lost wages, and potentially other damages.
What are the record-keeping requirements for restaurants in Texas?
Employers must keep accurate records of employee names, addresses, Social Security numbers, dates of birth, hours worked each day and week, wages paid, and deductions made. These records are essential for demonstrating compliance.
Do I need to display labor law posters?
Yes, federal and state laws require employers to display certain labor law posters in a conspicuous place where employees can see them. This includes posters on minimum wage, OSHA, and EEO.
What is ‘suffered or permitted’ to work regarding hours?
This means any time an employee is ‘suffered or permitted’ to work, even if not explicitly requested by the employer, is considered ‘hours worked’ and must be compensated, including for overtime calculation.
