Oklahoma — Wage & Hour

Oklahoma sets its minimum wage equal to the current federal minimum wage for all hours worked. Under 40 O.S. § 197.2, no employer in Oklahoma may pay any employee a wage of less than the current federal minimum wage. The federal minimum wage is $7.25 per hour under the Fair Labor Standards Act, unchanged since 2009. Oklahoma's statute automatically adjusts if Congress changes the federal rate.

Source: 40 O.S. § 197.2

Oklahoma's minimum wage law operates as a two-tier system. Larger employers must pay the federal minimum wage under 40 O.S. § 197.2, while very small employers fall under a separate $2.00-per-hour floor under 40 O.S. § 197.5. Which rule applies depends on coverage thresholds defined in the statute and the interplay with federal FLSA coverage.

Coverage under the Oklahoma Minimum Wage Act (§ 197.4). Under 40 O.S. § 197.4(d), "Employer" means any individual, partnership, association, corporation, business trust, or any person or group of persons hiring more than ten full-time employees or equivalent at any one location or place of business. The statute also covers an employer who has fewer than ten full-time employees at one location but does a gross business of more than One Hundred Thousand Dollars ($100,000.00) annually. An employer meets the definition—and is covered by the Oklahoma Minimum Wage Act—if it satisfies either the employee-count test (more than 10 FTE at one location) or the gross-sales test (over $100,000 annually, regardless of employee count). The statute uses the phrase "full-time employees or equivalent" but does not define the method for calculating equivalents; no implementing regulation provides further guidance.

Exclusion for FLSA-covered employers. The Oklahoma Minimum Wage Act expressly does not apply to "employers subject to the Fair Labor Standards Act of 1938, as amended, and who are paying the minimum wage under the provisions of said act" (40 O.S. § 197.4). In practice, this means that an employer covered by the federal FLSA—either because its employees are engaged in interstate commerce or because the employer is an enterprise with at least $500,000 in annual gross volume under 29 U.S.C. § 203(s)(1)(A)(ii)—must pay the federal minimum wage ($7.25 per hour as of 2026) and is not governed by the state act. Oklahoma's statute serves as a gap-filler for employers who fall below federal thresholds.

The $2.00 state minimum for very small employers (§ 197.5). For employers not covered by the Oklahoma Minimum Wage Act under § 197.4 and not subject to the FLSA, 40 O.S. § 197.5 requires that "[e]very employer shall pay to each of his employees who have reached eighteen (18) years of age wages at a rate of not less than Two Dollars ($2.00) per hour." This $2.00 floor, enacted in 1983 and unchanged since, applies to the narrow category of employers with:

• Ten or fewer full-time employees (or equivalent) at any one location, and
• Gross annual business of $100,000 or less, and
• No FLSA coverage (i.e., employees not engaged in interstate commerce and the employer not meeting the $500,000 FLSA enterprise threshold).

Practical effect: most Oklahoma employers pay $7.25. The vast majority of Oklahoma employers are FLSA-covered and must pay the federal $7.25 minimum wage, not the $2.00 state rate. FLSA coverage attaches broadly: an employer meets the enterprise test if it has $500,000 or more in annual gross volume, and individual employees are covered if they are engaged in interstate commerce (making phone calls or emails across state lines, handling goods that moved in interstate commerce, etc.). Only employers below both the state thresholds (10 or fewer employees at one location and $100,000 or less in gross business) and the federal thresholds can lawfully pay $2.00 per hour under Oklahoma law. For any employer or employee covered by the FLSA, federal law preempts and the $7.25 rate applies.

State employees and lessees. Regardless of the general thresholds, 40 O.S. § 197.5 expressly provides that "every employee of the State of Oklahoma or any lessee or concessionaire thereof is hereby specifically covered by the Oklahoma Minimum Wage Act." State government employees and employees of state lessees or concessionaires are covered by the state act, and because § 197.2 sets the Oklahoma minimum wage equal to the current federal minimum wage, they are entitled to $7.25 per hour.

Source: 40 O.S. § 197.4 | 40 O.S. § 197.5 | 40 O.S. § 197.2

Oklahoma has no state statute mandating overtime pay for private-sector employees. Employers in Oklahoma must comply with the federal Fair Labor Standards Act (29 U.S.C. § 207), which requires overtime pay at one and one-half times the regular rate for non-exempt employees who work more than 40 hours in a workweek. Oklahoma law does not impose additional requirements such as daily overtime thresholds or double-time pay.

State government employees and the FLSA. For state government employees, 74 O.S. § 840-2.15(A) contains a descriptive statement acknowledging that "[t]he federal Fair Labor Standards Act, 29 U.S.C., Section 201, et seq., provides for minimum standards for overtime entitlement, and spells out administrative procedures by which covered work time must be compensated." This language describes what the FLSA provides; it does not expressly prohibit state agencies from providing more generous overtime rules than the federal floor. The statute adopts the FLSA as the basic policy framework for state employees but is silent on whether agencies may exceed federal minimums. In practice, most Oklahoma state agencies follow the FLSA's 40-hour weekly threshold and time-and-a-half rate for non-exempt employees, using either cash payment or compensatory time off under 29 U.S.C. § 207(o) (which permits state and local government employers to provide comp time at the rate of 1.5 hours for each overtime hour worked, subject to accrual caps).

No daily overtime or double-time rules. Neither the FLSA nor Oklahoma law requires overtime pay for work beyond a certain number of hours in a single day (as California and some other states do), nor does Oklahoma impose double-time requirements. Overtime liability under the FLSA turns solely on hours worked in excess of 40 in a workweek.

Compensatory time for state employees. Subsection C of 74 O.S. § 840-2.15 addresses compensatory time: any state employee receiving compensatory time consistent with the federal FLSA must exhaust that comp time before taking annual leave, except when the employee would otherwise forfeit accrued annual leave due to accumulation limits under 74 O.S. § 840-2.20. This provision ensures that comp-time balances do not accumulate indefinitely while annual leave expires unused.

Source: 29 U.S.C. § 207 | 74 O.S. § 840-2.15

Oklahoma requires employers to pay non-exempt employees at least twice per calendar month on regular paydays designated in advance by the employer. Under 40 O.S. § 165.2, every employer in the state must pay all wages due to employees, other than exempt employees, at least semimonthly. Exempt employees—defined under 40 O.S. § 165.1 as management-level employees exempt from the minimum wage and overtime provisions of the Fair Labor Standards Act under 29 U.S.C. § 213—may be paid monthly. State, county, and municipal employees, school district employees, technology center school district employees, and employees of certain qualified non-private foundations also may be paid a minimum of once per calendar month under the same statute.

Payday timing and grace periods. An employer may allow no more than eleven (11) days to elapse between the end of the pay period worked and the regular payday designated by the employer. The employer is allowed three (3) additional days after the scheduled payday to comply with the payment requirement. This means an employer has up to fourteen days total from the end of the pay period to deliver wages (eleven days to payday plus three days' grace).

Itemized wage statements. With each payment of wages, Oklahoma law requires the employer to issue a brief itemized statement of any and all deductions from wages. Payment must be made in lawful money of the United States, including payment by electronic means. The statute prohibits employers from issuing checks, drafts, store orders, scrip, or other acknowledgments of indebtedness unless payable or redeemable on demand without discount and for face value in lawful money.

Exempt-employee definition. For purposes of the payday-frequency rule, "exempt employee" means those management-level employees exempt under Section 213 of the Fair Labor Standards Act (29 U.S.C. § 213) from the provisions of Sections 206 and 207 of the FLSA (minimum wage and overtime). This tracks the federal white-collar exemptions (executive, administrative, professional, computer, and outside sales). Employers relying on the monthly-pay option for exempt employees should confirm that the employee meets both the FLSA duties test and the salary-basis test.

No waiver permitted. The statute expressly states that an employee shall not be deemed to have waived any right mentioned in Section 165.2 because of any contract to the contrary. Written agreements purporting to allow less-frequent pay or longer pay cycles are void.

Source: 40 O.S. § 165.2 | 40 O.S. § 165.1

Oklahoma requires employers to pay all final wages to a separated employee by the next regular designated payday, regardless of whether the employee was terminated or resigned. Under 40 O.S. § 165.3(A), whenever an employee's employment terminates, the employer must pay the employee's wages in full—less offsets and less any amount over which a bona fide disagreement exists—at the next regular designated payday established for the pay period in which the work was performed. Payment may be made either through the regular pay channels or by certified mail postmarked within the statutory deadlines if requested by the employee. A collective bargaining agreement may provide otherwise.

What constitutes "wages" owed. Under 40 O.S. § 165.1(7), "wages" means compensation owed by an employer to an employee for labor or services rendered, including salaries, commissions, holiday and vacation pay, overtime pay, severance or dismissal pay, bonuses, and other similar advantages agreed upon between the employer and the employee, which are earned and due, or provided by the employer to employees in an established policy. Because vacation pay is specifically listed in the statutory definition of wages, earned but unused vacation time must be paid out at separation if the employer has established a vacation policy. The Oklahoma Court of Civil Appeals confirmed in Biggs v. Surrey Broadcasting Co., 811 P.2d 111 (Okla. Ct. App. 1991), that § 165.3 contains no "involuntary termination" exception permitting an employer to condition payout of accrued vacation on advance notice or other employment-policy requirements.

Bona fide disagreement exception. An employer may withhold only amounts over which a "bona fide disagreement" exists. Under 40 O.S. § 165.1(9), a bona fide disagreement means an honest and sincere belief or assertion based on a dispute of a determinative fact or application of law under Title 40 which is supported by relevant evidence. This is a narrow exception—employers may not withhold wages based on speculation or unilateral policy preferences. The disagreement must concern a determinative fact (whether the hours were actually worked) or a genuine legal question (whether a particular payment qualifies as a wage), and the employer's position must be supported by relevant evidence.

Liquidated damages for late payment. If an employer fails to pay an employee wages as required by subsection A, the employer is additionally liable to the employee for liquidated damages under 40 O.S. § 165.3(B). The liquidated-damages formula depends on whether the employer willfully withheld wages over which there was no bona fide disagreement:

• Willful withholding (no bona fide disagreement): Two percent (2%) of the unpaid wages for each day the failure continues after the day the wages were earned and due, or an amount equal to the unpaid wages, whichever is smaller. The statute uses "or," creating a cap: the employer owes the lesser of (i) 2% per day compounding or (ii) 100% of the unpaid wages.

• Bona fide disagreement: The statute does not specify a separate liquidated-damages rate for disputes involving a bona fide disagreement. Courts have interpreted this to mean that liquidated damages do not accrue if the employer's withholding was based on a genuine bona fide disagreement, but once the dispute is resolved against the employer, unpaid wages become due immediately.

The daily 2% penalty can accumulate quickly. For example, if an employer willfully withholds $1,000 in final wages and the employee files suit 30 days later, the 2% per day would theoretically reach $600 (30 days × $20), but the "whichever is smaller" cap limits liquidated damages to the unpaid wages themselves ($1,000). In practice, the statute creates a floor penalty of 2% per day that stops accruing once it equals 100% of the unpaid amount—effectively a doubling of the debt at 50 days.

Bankruptcy exception. The failure to pay final wages is not deemed to continue after the date of the filing of a petition in bankruptcy with respect to the employer if the employer is thereafter adjudicated bankrupt upon such petition. This stops the accrual of liquidated damages upon bankruptcy filing (if bankruptcy is ultimately granted).

No distinction between voluntary and involuntary separation. The statute applies whenever "an employee's employment terminates"—subsection A does not differentiate between discharge, resignation, layoff, or mutual separation. The same next-regular-payday deadline applies in all cases. This contrasts with states such as California and Colorado, which require immediate or next-business-day payment for involuntary terminations but allow a longer period for resignations.

Interaction with payday-frequency rules. Because final pay is due at the "next regular designated payday established for the pay period in which the work was performed," the employer's established pay schedule under 40 O.S. § 165.2 governs timing. For non-exempt employees paid semimonthly (at least twice per month), the final paycheck will be due on whichever of the two monthly paydays covers the final pay period. Employers may not delay final pay beyond this date by citing payroll-processing cycles or administrative convenience.

Source: 40 O.S. § 165.3 | 40 O.S. § 165.1

Oklahoma permits employers to pay tipped employees a reduced cash wage and claim a tip credit against their minimum wage obligations, but the rules differ depending on whether the employer follows federal or state standards. Under 40 O.S. § 197.16, as amended effective November 1, 2025, employers may credit tips, gratuities, meals, or lodging toward the minimum required wage, subject to specific cash-wage floors.

Federal tip credit rule (subsection A). For employees covered by the Oklahoma Minimum Wage Act where the state minimum wage equals the federal minimum wage ($7.25 per hour as of 2026), employers must pay a cash wage of "not less than what is required under 29 C.F.R., Section 531.50(a)(1)." That federal regulation sets the minimum cash wage at $2.13 per hour—the amount required on August 20, 1996, which Congress froze in place. The employer may then claim a tip credit of up to $5.12 per hour (the difference between $7.25 and $2.13), provided the employee actually receives that amount in tips. If tips plus the $2.13 cash wage do not equal at least $7.25 per hour, the employer must make up the difference.

Alternative state formula (subsection B). Should Oklahoma's minimum wage ever exceed the current federal minimum wage in the future, subsection B provides that employers "may" (not "shall") give credit toward the minimum required wage for tips, gratuities, meals, or lodging. This subsection does not specify a particular cash-wage floor or maximum tip-credit percentage; the statute is silent on whether subsection B would allow an employer to continue paying $2.13 cash or would impose a different floor. Because Oklahoma's minimum wage is currently set equal to the federal rate under 40 O.S. § 197.2, subsection B has no current practical effect.

Which employers may claim a tip credit. Only employers covered by the Oklahoma Minimum Wage Act under 40 O.S. § 197.4 are governed by § 197.16. As discussed in the "Minimum wage coverage thresholds" section of this guide, the state act covers employers with more than ten full-time employees at one location OR gross annual business exceeding $100,000. However, the state act expressly does not apply to employers already subject to the federal Fair Labor Standards Act who pay the federal minimum wage. In practice, most Oklahoma employers are FLSA-covered and therefore follow the federal tip-credit rules directly under 29 U.S.C. § 203(m) and 29 C.F.R. Part 531, Subpart D—not the state statute. For FLSA-covered employers, the $2.13 federal tipped minimum wage and the federal tip-credit requirements (employee notice, tip retention, tip-pooling restrictions, and the $30-per-month threshold in 29 U.S.C. § 203(t)) apply by operation of federal law.

Federal tip-credit requirements (for reference). Under 29 C.F.R. § 531.50 and related regulations, an employer taking a tip credit must:

• Pay a cash wage of at least $2.13 per hour.
• Inform tipped employees in advance of the tip credit, the cash wage amount, the tip credit amount, and the tip-retention and tip-pooling rules.
• Ensure that tips received plus the cash wage equal at least the full minimum wage ($7.25) for every hour worked.
• Allow employees to retain all tips, except for valid tip pools limited to employees who customarily and regularly receive tips (servers, bartenders, bussers, etc.). Managers and supervisors may not participate in tip pools or keep any portion of employees' tips, per 29 U.S.C. § 203(m)(2)(B).
• Meet the federal definition of "tipped employee": one engaged in an occupation in which the employee customarily and regularly receives more than $30 per month in tips (29 U.S.C. § 203(t)).

Credit for meals and lodging. Both subsection A and subsection B of 40 O.S. § 197.16 permit credit for "meals, or lodging" in addition to tips. The statute does not specify valuation rules or whether the employee must voluntarily accept the meals or lodging. For FLSA-covered employers, federal regulations at 29 C.F.R. § 531.3 govern the valuation of board, lodging, and other facilities furnished by the employer; the value must be reasonable, and the employee must receive the benefit voluntarily and primarily for the employee's benefit (not solely for the employer's convenience).

Effective date of current version. The current text of 40 O.S. § 197.16 was amended by Laws 2025, c. 401, § 1, effective November 1, 2025. The principal change was the addition of the specific cross-reference to 29 C.F.R. § 531.50(a)(1) in subsection A, explicitly tying Oklahoma's cash-wage floor to the federal $2.13 rate.

Source: 40 O.S. § 197.16 | 29 C.F.R. § 531.50