HB 5368 would substantially raise Texas’s state minimum wage and create an automatic inflation adjustment. The bill amends the Labor Code to set the general minimum wage at $19 per hour, with a later provision requiring annual CPI-U indexing beginning in 2026 so the wage rises with inflation and cannot be reduced from one year to the next. It also preserves the rule that the state wage floor cannot fall below the federal minimum wage if federal law is higher.
The bill also revises Texas law governing tipped employees. It would require employers to pay tipped workers the full federal minimum wage directly and prohibit the use of a tip credit, while also clarifying that employers may not keep any portion of tips. In addition, the bill changes compensation rules for certain prison work programs by requiring the Texas Board of Criminal Justice to set pay scales at least at the federal minimum wage for work program participants and inmates in agricultural, industrial, or other work programs, subject to existing deductions for restitution and dependent care in the inmate trust fund system. It repeals Section 62.151 of the Labor Code and directs the board to adopt implementing rules by December 1, 2025, with an effective date of September 1, 2025.
Impact
HB 5368 would amend multiple sections of the Labor Code and Government Code to raise wage floors across private employment, tipped employment, and certain inmate/work-program compensation structures. It would replace the current minimum wage framework with a much higher state rate, add annual inflation indexing, eliminate tip-credit treatment for tipped workers, and require rulemaking by the Texas Board of Criminal Justice to align prison work program pay with the federal minimum wage. The bill would affect employers, tipped employees, incarcerated workers, prison industries, and the state agencies responsible for wage and corrections policy.
Sentiment
The available context shows no committee transcript, recorded votes, or formal debate excerpts, so there is no documented public sentiment from the legislative record provided. Based on the bill’s content, it is a major wage-increase proposal that would likely be viewed favorably by labor advocates and workers seeking higher pay, while likely drawing opposition from employer groups, business interests, and corrections stakeholders concerned about cost and operational impacts. The bill was referred to a House subcommittee on Workforce, indicating it was still in the early committee process.
Contention
The main points of contention are likely the size of the proposed minimum wage increase, the automatic inflation adjustment, and the elimination of the tip credit for tipped employees. Employers and business groups would likely object to the higher labor costs and the requirement to pay tipped workers the full minimum wage regardless of tips. Another likely area of dispute is the prison labor provisions, which would require higher compensation for inmate work programs and could affect prison industry operations and restitution/dependent-care deductions. Supporters would likely emphasize wage adequacy, predictability through indexing, and fairer treatment of tipped and incarcerated workers.
Relating to the minimum wage and a requirement for a biennial study and report on the living wage in this state, expanding access to childcare, and providing paid parental leave.