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Federal Minimum Wage

There also exists a subminimum wage called the “opportunity” wage in Texas.  It is set at $4.25 per hour for employees under the age of 20 and applies to the first 90 consecutive calendar days of employment.  An employer may not abuse this provision by displacing an employee in favor of an underaged employee; nor may an employer displace an older employee by reducing his or her hours, wages or benefits.  

“Trainees” are another category that legally may be paid less than the minimum wage. However, an employer must meet certain guidelines in order to categorize an individual as a “trainee:” the training is similar to that provided by a vocational school;  the training is to benefit the individual, not the employer; a trainee is closely supervised and may not displace a regular employee; the employer receives no immediate advantage from maintaining a trainee; a trainee is not “entitled” to a job at the completion of the training; it is understood that trainees are not entitled to wages for the training.

There are also certain provisions in regard to employees who receive “tips.”  For those employees who customarily receive more than $30 a month in tips, their tips may be credited against the minimum wage.  This holds true if the employer pays no less than $2.13.   If an employee’s tips plus the $2.13 per hour do not meet the minimum wage, then the employer is to pay the difference.  It is necessary that the employer communicate these guidelines to the employee before any crediting against the minimum wage may occur.

In addition, there are provisions for non-cash benefits such as meals or lodging as credited to the minimum wage.  The Department of Labor maintains these provisions: employers may provide non-cash items only if the employee voluntarily accepts such items; employers are to maintain a “reasonable cost” and may not charge the employee more than the actual cost of the items.