2020 Texas Tipped Minimum Wage
The 2020 Texas Tipped Minimum Wage is $2.13.
Effective 2020-01-01Source: Texas Guidebook for Employers: Especially for Texas Employers (Texas Workforce Commission)Verified 2026-09-01
Compared with 2019
Every figure on this page is unchanged from 2019.
| Item | 2019 | 2020 | Change |
|---|---|---|---|
| Minimum cash wage | $2.13 | $2.13 | +$0 (+0.0%) |
Who it applies to
Texas employers who take a tip credit against the wages of tipped employees
What changed this year, and why
Texas's minimum cash wage for tipped employees was $2.13 per hour in 2020.
Common questions
- What was the minimum cash wage for tipped employees in Texas in 2020?
- In 2020 a Texas employer that took a tip credit had to pay a tipped employee a direct cash wage of at least $2.13 per hour. Texas adopts the federal minimum wage, so the tip credit an employer may claim is the difference between that cash wage and the federal minimum wage.
- What happens if tips do not bring a tipped employee in Texas up to the minimum wage?
- The employer must make up the difference. A cash wage of $2.13 per hour plus the tips the employee actually receives has to equal at least the applicable minimum wage for every hour worked, and where it does not the employer owes the balance.
Who counts as a tipped employee
In Texas, a worker counts as a tipped employee if their occupation is one in which they customarily and regularly receive more than $30 a month in tips. This federal threshold is set by the Fair Labor Standards Act (FLSA), which Texas employers must follow. Only the tips the worker actually receives count toward this determination—not potential or estimated tips. If a Texas employee works in a role where tips typically fall below $30 a month, the employer cannot treat that worker as a tipped employee, meaning the employer must pay the full minimum wage and cannot claim any tip credit against that obligation. This $30-a-month rule applies regardless of whether the employer pays the full minimum wage directly or intends to use a tip credit to meet part of its wage obligations.
Under the FLSA, a tipped employee is an employee engaged in an occupation in which they customarily and regularly receive more than $30 a month in tips.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
What a tip credit is, and the cash wage underneath it
Under federal law as it applies in Texas, the tip credit allows employers to pay tipped workers a lower direct cash wage and count their tips toward meeting the minimum wage. Employers must pay tipped workers at least $2.13 per hour in direct wages. The tip credit equals the difference between this direct wage and the federal minimum wage of $7.25 per hour. The maximum tip credit an employer can claim is $5.12 per hour. However, the employer must ensure that your total compensation—direct wages plus tips—reaches at least the minimum wage in every workweek. Only tips you actually receive count when applying this credit. If your combined direct wages and tips fall short of the minimum wage in any workweek, your employer must make up the difference.
An employer must pay a tipped worker at least $2.13 per hour under the FLSA. An employer can take an FLSA tip credit equal to the difference between the direct wage, or the cash wage it pays directly to the tipped employee, and the federal minimum wage, which is currently $7.25 per hour. The maximum tip credit that an employer can currently claim is $5.12 per hour: ($7.25 - $2.13 direct (or cash) wage = $5.12).
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
When the tips do not get you to the minimum wage
Texas employers claiming a tip credit must verify each workweek that tipped employees receive at least the full federal minimum wage when combining direct cash wages and the tip credit amount. If your tips plus your employer's direct wages do not add up to $7.25 per hour in any given workweek, the employer must make up the difference. This protection ensures that slow periods or low-tip situations do not leave you earning below minimum wage. The employer bears the responsibility to track your total compensation weekly and pay you the shortfall if necessary. This rule applies regardless of how many tips you actually receive or whether business conditions affect your tip income.
If an employee’s tips combined with the employer’s direct (or cash) wages do not equal the minimum hourly wage of $7.25 per hour in each workweek, the employer must make up the difference.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
The notice an employer owes you before it takes the credit
Before taking a tip credit, Texas employers must give tipped employees specific information about how their wages will be calculated. The notice must include the amount of the direct cash wage the employer is paying, which must be at least $2.13 per hour, and the additional amount the employer is claiming as a tip credit, which cannot exceed $5.12. The notice must also explain that the tip credit cannot exceed the actual tips received, that you retain all your tips except for valid tip pooling, and that the tip credit will not apply unless you have been properly informed. Employers can provide this information orally or in writing, but if they fail to give proper notice, they cannot take the tip credit at all and must pay the full minimum wage directly.
Employers must provide the following information to tipped employees before taking a tip credit under the FLSA: the amount of the direct (or cash) wage the employer is paying a tipped employee, which must be at least $2.13 per hour; the additional amount claimed by the employer as a tip credit, which cannot exceed $5.12 (the difference between the minimum required direct (or cash) wage of $2.13 and the current minimum wage of $7.25)
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
When state law gives more than the federal rule
When Texas state law differs from federal FLSA requirements, employers must comply with the standard most protective to employees. For example, some states require employers to pay a higher cash wage than the federal minimum of $2.13 per hour, and some states prohibit the tip credit entirely. In Texas, if state law provides greater protections or higher wages than federal law, your employer must follow whichever rule benefits you more. This means you are entitled to the better of the two standards, not just the federal minimum. You can check specific Texas labor laws through your state labor department to understand which rules apply to your situation.
When state law differs from the federal FLSA, an employer must comply with the standard most protective to employees.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
Your employer, your manager and your supervisor may not keep your tips
Federal law prohibits Texas employers from keeping any portion of employees' tips for any purpose, whether directly or through a tip pool. This rule applies regardless of whether the employer takes a tip credit. Your employer may not require you to give your tips to the employer, a supervisor, or a manager, even if you receive at least the full minimum wage per hour in direct wages and the employer takes no tip credit. Managers and supervisors are specifically barred from receiving any share of your tips. This protection ensures that tips you earn from customers remain yours, not your employer's revenue. The rule covers all methods of taking tips, including direct confiscation and indirect retention through tip pooling arrangements.
Regardless of whether an employer takes a tip credit, the FLSA prohibits employers from keeping any portion of employees’ tips for any purpose, whether directly or through a tip pool.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
Which tip pools you can be made to join
Texas employers that take a tip credit can require tipped employees to contribute to a tip pool, but only if the pool is limited to employees in occupations where they customarily and regularly receive tips. This means the tip pool can include waiters, bellhops, counter personnel who serve customers, bussers, and service bartenders—workers who typically depend on tips as part of their compensation. The employer must notify you of any required tip pool contribution amount before implementing the pool. The employer can only take a tip credit for the tips you ultimately receive after the pool distribution, and the employer may not retain any of the employees' tips for any purpose. Traditional tip pools must include only forward-facing service staff who regularly receive tips from customers.
An employer that takes a tip credit can require tipped employees to contribute tips only to a tip pool which is limited to employees in occupations in which they customarily and regularly receive tips, such as waiters, bellhops, counter personnel (who serve customers), bussers, and service bartenders.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
Doing two jobs for one employer
When you work two different jobs for the same Texas employer, you are considered a tipped employee only with respect to the job where you customarily and regularly receive tips. For example, if you work as both a maintenance person and a server at a hotel, and you receive at least $30 a month in tips for your server work, you are a tipped employee only for your server hours. Your employer cannot take a tip credit for the hours you work as a maintenance person. The two occupations are treated separately, and you must receive at least the full minimum wage for your non-tipped job hours. This rule prevents employers from using your tips to offset wages in jobs where tipping is not customary or expected.
In such a situation the employee, if they customarily and regularly receive at least $30 a month in tips for their work as a server, is a tipped employee only with respect to their employment as a server.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Texas Guidebook for Employers: Especially for Texas Employers (Texas Workforce Commission)
- Minimum cash wage
The FLSA sets minimum wage levels (minimum wage of $7.25 per hour (the Texas minimum wage is the same), a minimum cash wage of $2.13 per hour for tipped employees, overtime pay at one and a half times the regular rate of pay, and a minimum salary level of $684 per week for salaried exempt employees)
Other years
Every Texas Tipped Minimum Wage year · Tipped Minimum Wage in every state