TITLE: Relating to the payment of gratuities to tipped employees; creating a criminal offense.

SUMMARY: Relating to the payment of gratuities to tipped employees; creating a criminal offense.

FULL TEXT:
AN ACT relating to the payment of gratuities to tipped employees; creating a criminal offense. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Subchapter B, Chapter 61, Labor Code, is amended by adding Section 61.021 to read as follows: Sec. 61.021. GRATUITIES PAID TO TIPPED EMPLOYEE; CRIMINAL PENALTY. (a) In this section, "tipped employee" has the meaning assigned by Section 62.052. (b) An employer may not collect or receive any portion of a gratuity paid to or left for a tipped employee for any purpose, including for the purpose of compensating a credit or debit card issuer for any financial services rendered on account of the gratuity, regardless of whether the employer takes a tip credit against the payment of the minimum wage to the employee. The gratuity is the sole property of the tipped employee. (c) An employer must pay to a tipped employee the amount of any gratuity left for the employee by a customer who pays with a credit or debit card not later than the employee's first payday after the date on which the gratuity was authorized. (d) An employer commits an offense if the employer violates this section. An offense under this subsection is a felony of the third degree. (e) Each violation of this section is a separate offense. SECTION 2. Section 61.021, Labor Code, as added by this Act, applies only to conduct that occurs on or after the effective date of this Act. SECTION 3. This Act takes effect September 1, 2025.