Waiter Minimum Wage in Texas: Tip Credit, Pooling, and Overtime

In Texas, the minimum wage for a waiter is $2.13 per hour in direct cash wages, provided tips bring total earnings to at least the federal minimum of $7.25 per hour for every hour worked in the week. Texas has no separate state minimum wage, so federal Fair Labor Standards Act rules on tip credits, tip pooling, overtime, and deductions control how every restaurant in the state pays its servers.¹²

How the $2.13 Cash Wage and Tip Credit Work

Federal law lets the employer count part of your tips against its $7.25 obligation. Under 29 U.S.C. § 203(m)(2)(A), the employer pays a direct cash wage of at least $2.13 per hour and applies a tip credit of up to $5.12 per hour to close the gap.³ If your tips in a given workweek don’t get you to $7.25 for every hour worked, the employer has to make up the difference in cash.⁴

That check is done per workweek, not per shift. A dead Tuesday lunch can be offset by a busy Friday dinner inside the same pay period, and the arithmetic is applied across all hours in the week.

Who Counts as a Tipped Employee

The tip credit only applies to workers who customarily and regularly receive more than $30 a month in tips.⁴ The threshold is low enough that any regular server clears it, but an employee who fills in as a waiter once in a while alongside a non-tipped role may not. Anyone under $30 a month in tips must be paid the full $7.25 for every hour.

What the Employer Must Tell You First

The tip credit isn’t automatic. Before an employer can pay you $2.13 instead of $7.25, it has to tell you four things: the cash wage you’ll be paid, the amount it will claim as a tip credit, that you keep all your tips except in a valid pool, and that if tips fall short the employer covers the gap.³ The notice can be verbal or written, but it must come before the first paycheck that uses the credit.

If you never got that notice, the employer legally cannot take the tip credit. You would be owed the full $7.25 for every hour worked, minus whatever cash wage you actually received. Over months of shifts, that back-pay figure gets large.

Employers also have to be able to show, week by week, that direct wages plus tips actually hit $7.25 per hour.⁴ If those records don’t exist, the employer is on weak ground in any dispute.

Side Work and the Dual Jobs Rule in Texas

Servers spend real time on tasks that don’t directly earn tips: rolling silverware, brewing coffee, wiping down tables, refilling condiments. When does that time have to be paid at the full $7.25?

If you’ve read about an “80/20 rule” or “80/20/30 rule,” it doesn’t apply in Texas. The Department of Labor’s 2021 regulation that required the full minimum wage once a tipped employee spent more than 20 percent of the workweek, or more than 30 consecutive minutes, on non-tip-producing support work was vacated by the Fifth Circuit in August 2024, and the DOL formally withdrew it in December 2024, restoring the original 1967 dual-jobs regulation.⁵

The current line is drawn between separate occupations, not between individual tasks inside one occupation. If you wait tables on weekends and do maintenance work on weekdays for the same employer, no tip credit applies to the maintenance hours.⁶ But cleaning and setting tables, toasting bread, making coffee, and occasionally washing dishes are treated as part of being a server, and the tip credit continues to apply regardless of how long those tasks take. Because Texas sits in the Fifth Circuit, an employer here can pay $2.13 while you spend a full shift on prep, as long as the prep is part of your server role rather than a separate job.

Tip Pooling Rules

Federal law permits tip pooling, with hard limits on who can share.

Managers, supervisors, and business owners cannot keep any share of employee tips, whether or not the employer uses a tip credit.⁷ A supervisor in this context is someone with authority to hire, fire, or discipline, or whose recommendations carry significant weight in personnel decisions.

Which non-supervisory employees can be in the pool depends on whether the employer takes the tip credit:

If the employer takes the tip credit and pays $2.13, the pool is limited to employees who customarily and regularly receive tips: servers, bartenders, bussers, hosts. Back-of-house workers like cooks and dishwashers cannot participate.³
If the employer pays the full $7.25 with no tip credit, the pool can include back-of-house staff like line cooks and dishwashers, as long as managers and supervisors are still excluded.

Pooled tips have to be fully distributed to employees no later than the regular payday for the workweek in which they were earned.⁴ A manager who takes from the pool can force the restaurant to reimburse staff for the full amount taken.

Automatic Gratuities and Service Charges Are Not Tips

Many Texas restaurants add automatic gratuities for large parties or apply service charges for bottle service and room service. Under federal tax rules, a payment is a tip only when the customer freely chooses the amount, decides whether to pay it, and picks who gets it.⁸ Mandatory service charges fail all three tests, even when the receipt calls them “gratuity.”

Once collected, service charges belong to the employer. If the employer passes them to staff, the IRS treats those payments as regular wages subject to standard withholding, not as tips.⁸ Service charge income cannot count toward a tip credit and cannot be included in a tip pool. An automatic 18 percent for a party of eight is wages, and the employer decides whether and how to distribute it.

Overtime Pay for Tipped Workers

Texas follows the federal standard: time-and-a-half for any hours over 40 in a workweek. For tipped employees, overtime is calculated from the full $7.25 minimum wage, not from the $2.13 cash wage.⁴

$7.25 times 1.5 is $10.88 (rounded). The employer can apply the same $5.12 tip credit it uses on regular hours, which means the minimum cash wage for each overtime hour is $5.76.⁹ The overtime tip credit can never exceed the regular tip credit. If you’re on overtime hours and still getting $2.13 in cash, you’re being shorted $3.63 for every one of those hours.

Deductions That Cannot Push Your Pay Below the Minimum

Employers sometimes try to shift business costs to servers: uniforms, cash register shortages, broken glassware, walked tabs. Under the FLSA, no deduction can drop a tipped employee’s wages below the $2.13 cash minimum, and no deduction can cut into the tips needed to satisfy the tip credit. A required uniform deducted from your paycheck becomes illegal the moment it pushes your effective hourly earnings below the minimum wage for a workweek.

Cash shortages and dine-and-dashes follow the same principle. Docking a server’s pay for a walkout is only permissible if it doesn’t drop earnings below $7.25 per hour for the week, a condition that’s nearly impossible to meet when the cash wage is already only $2.13.

Filing a Wage Claim if You Are Underpaid

If your employer is breaking any of these rules, you have two ways to recover the money: a state claim through the Texas Workforce Commission, or a federal claim under the FLSA.

Texas Workforce Commission

You can file a wage claim with the TWC online, in person at any TWC office or Workforce Solutions center, by mail, or by fax.¹⁰ The deadline is 180 days from the date the wages became due. The process is faster than federal court and doesn’t require an attorney, but the recovery is limited to the unpaid wages themselves.

Federal FLSA Lawsuit

A federal FLSA claim usually pays more. Under 29 U.S.C. § 216(b), a successful claim gets you the unpaid wages plus an equal amount in liquidated damages, effectively doubling your recovery, and the court must award reasonable attorney’s fees.¹¹ You have two years to file from the date of the violation, or three years if the violation was willful.¹² Because the statute guarantees fee recovery, many employment attorneys take these cases on contingency, which makes an FLSA suit realistic even when the individual dollar amount seems small.

1
State of Texas. Texas Labor Code 62.051 – Minimum Wage
2
U.S. Department of Labor. State Minimum Wage Laws
3
Office of the Law Revision Counsel. 29 USC 203 – Definitions
4
U.S. Department of Labor. Fact Sheet 15 – Tipped Employees Under the Fair Labor Standards Act
5
Federal Register. Tip Regulations Under the Fair Labor Standards Act – Restoration of Regulatory Language
6
eCFR. 29 CFR 531.56 – More Than $30 a Month in Tips
7
U.S. Department of Labor. Tip Regulations Under the Fair Labor Standards Act
8
Internal Revenue Service. Topic No. 761, Tips – Withholding and Reporting
9
U.S. Department of Labor. FLSA Overtime Calculator Advisor
10
Texas Workforce Commission. Wage Claim and Appeal Process in Texas
11
Office of the Law Revision Counsel. 29 USC 216 – Penalties
12
Office of the Law Revision Counsel. 29 USC 255 – Statute of Limitations