TITLE: Relating to the minimum wage.

SUMMARY: Relating to the minimum wage.

FULL TEXT:
AN ACT relating to the minimum wage. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 62.051, Labor Code, is amended to read as follows: Sec. 62.051. MINIMUM WAGE. (a) Except as otherwise provided by this section [Section 62.057],an employer shall pay to each employee not less than $19 an hour. (b) Notwithstanding Subsection (a), and except as provided by Subsection (c), an employer shall pay to each employee not less than the greater of: (1) the minimum wage established under Subsection (a); or (2) the amount set as the federal minimum wage under Section 6, Fair Labor Standards Act of 1938 (29 U.S.C. Section 206). (c) Beginning on October 1, 2026, an employer shall pay to an employee not less than the minimum wage established under Subsection (d). (d) Except as provided by Subsection (e), on June 1, 2026, and every year thereafter, the commission shall adjust the minimum wage established under Subsection (b) for inflation. The adjusted minimum wage rate shall be computed to the nearest cent using the consumer price index for all urban consumers (CPI-U), as computed by the United States Department of Labor for the preceding 12 months, or an analogous index adopted by the commission by rule. The commission by rule shall: (1) describe the process used in computing inflation rates and the procedure for determining the level of inflation used in the commission's computations; and (2) based on the computations under Subdivision (1), set the state minimum wage for the subsequent calendar year. (e) The commission may not adjust the minimum wage under Subsection (d) to an amount that is less than the minimum wage for the preceding calendar year. (f) This section does not apply to compensation paid to a person under Section 62.057 or to a tipped employee under Section 62.052. SECTION 2. Section 62.052, Labor Code, is amended to read as follows: Sec. 62.052. TIPPED EMPLOYEES. (a) [In determining the wage of a tipped employee, the amount paid the employee by the employer is the amount described as paid to a tipped employee under Section 3(m), Fair Labor Standards Act of 1938 (29 U.S.C. Section 203(m)). [(b)] In this section, "tipped employee" means an employee engaged in an occupation in which the employee customarily and regularly receives more than $20 a month in tips. (b) An employer shall pay to each tipped employee the federal minimum wage under Section 6, Fair Labor Standards Act of 1938 (29 U.S.C. Section 206(a)(1)). The amount paid to an employee may not be reduced by a tip credit against the minimum wage. (c) This section may not be construed to allow an employer to keep any portion of a tipped employee's tips. SECTION 3. Section 497.004(a), Government Code, is amended to read as follows: (a) The board shall [may] develop by rule and the department shall [may] administer an incentive pay scale for work program participants consistent with rules adopted by the board under Subchapter C. The board shall set pay levels at a minimum of the federal minimum wage under Section 6, Fair Labor Standards Act of 1938 (29 U.S.C. Section 206(a)(1)). Prison industries may be financed through contributions donated for this purpose by private businesses contracting with the department. The department shall apportion pay earned by a work program participant in the same manner as is required by rules adopted by the board under Section 497.0581. SECTION 4. Section 497.099(b), Government Code, is amended to read as follows: (b) The board shall [may] develop by rule and the department shall [may] administer an incentive pay scale program for inmates required to work in agricultural, industrial, or other work programs. In developing the program, the board shall set pay levels not to unjustly reward inmates, but rather to instruct inmates on the virtues of diligent participation in the workplace,provided that the board shall set pay levels at a minimum of the federal minimum wage under Section 6, Fair Labor Standards Act of 1938 (29 U.S.C. Section 206(a)(1)).The department shall deposit an amount earned by an inmate under this subsection into the inmate's trust fund and may deduct not more than 80 percent of the amount deposited under this subsection for payment of restitution and dependent care owed by the inmate. [This subsection does not apply to the compensation of an inmate participating in a Texas Correctional Industries program under Subchapter A or an inmate participating in a private sector prison industries program under Subchapter C.] SECTION 5. Section 62.151, Labor Code, is repealed. SECTION 6. Not later than December 1, 2025, the Texas Board of Criminal Justice shall adopt the rules required by Sections 497.004(a) and 497.099(b), Government Code, as amended by this Act. SECTION 7. This Act takes effect September 1, 2025.