Over 13 million employees are employed by hundreds of thousands of large companies and small businesses in Texas. Many of these workers are skilled employees. In fact, Austin alone has been ranked among the top 10 labor markets in the U.S. Dallas and Houston have also received similar accolades for its workforce capabilities. If you are ready to start a business in Texas or are already running one, it’s important to know exactly what employment laws apply to your workers. Speaking with an attorney from Priori's on-demand legal marketplace about Texas employment law may help you get started.
Hiring Practices and Termination
While federal labor law regulates most legal requirements for employment and termination, Texas law works within these regulations to dictate what is and is not allowed in terms of Texas hiring practices and termination.
Texas Laws Related to the Hiring Process
Employment procedures must be fair, nondiscriminatory, and protect the basic interests of employees. Under Title VII of the Civil Rights Act of 1964, it became illegal to discriminate against a candidate based on race, color, religion, sex, or national origin in the United States. The Americans with Disabilities Act and the Age Discrimination in Employment Act extended federal protections eliminating discrimination based on age and disability. Such discrimination in hiring and advancement have since been codified into state law under the Texas Commission on Human Rights Act. If you believe you have been subject to discriminatory questions or practices during the hiring process for a company in Texas, you can file a complaint with the Texas Workforce Commission.
All new hires must be reported to the State Directory of New Hires Act within 20 calendar days. These can be made online twice a month to the Texas Employer New Hire Reporting Operations Center.
Texas is an an at-will employment state, which means that employees can generally be let go at any time for any legal reason. Discrimination or retaliation are generally not considered legal reasons for dismissal. Generally, Texas employment law requires a low burden of proof to demonstrate cause for dismissal.
After an employee is terminated in Texas, they must receive their final paycheck and any accrued benefits within six days. At this time, the former employee may be eligible for post-employment benefits. In Texas, this includes coverage under unemployment insurance, and six months continued health insurance coverage under COBRA for those companies with at least 20 employees.
Employee Salary and Benefits
In Texas, there are few state laws governing salary. Most wage protections are established at the federal level.
Wages and the FLSA
Texas has no established minimum wage. Instead, it keeps up with the federal minimum wage as established in the Fair Labor Standards Act (FLSA), which is currently $7.25/ hr. Salaried workers have no claim to overtime in Texas, but hourly workers should be compensated at 1.5x their normal hourly rate for any hours worked beyond 40. The FLSA also protects against other unfair workplace conditions, such as child labor and uncompensated furloughs.
Under the Affordable Care Act, all businesses with 50 or more full-time employees must provide health insurance to full-time employees and their dependents or pay a penalty. Texas does not have alternate requirements for small businesses.
Neither federal nor state mandates any paid leave, but the Family and Medical Leave Act requires covered employers to provide job-protected unpaid leave for qualified medical and family reasons, such as personal or family illness, family military leave, pregnancy, and adoption. Many companies in Texas do, however, provide some paid leave for salaried employees.
Texas Workplace Standards and Health and Safety Compliance
Texas is not a "state-plan" state for workplace standards. Instead, all businesses must comply with federal workplace health and safety standards established by OSHA. All companies must determine which unique standards apply to their industry, area, and size company. Strict OSHA compliance is vital if you do not want to face costly actions later.
The Texas Workers’ Compensation Act
Worker’s compensation in Texas is regulated by the Texas Department of Insurance. Under the Texas Workers’ Compensation Act, small private companies are generally not required to carry insurance, but all workplace injuries must be reported to the to the Division of Workers’ Compensation. Many companies in Texas choose to enroll in workers' compensation self-insurance groups instead. If your company chooses to self insure, you may still be held responsible for injury claims.
Discrimination and Harassment
Workplace discrimination and harassment is illegal in Texas. All companies must have procedures in place to stop and punish discrimination based on race, religion, ethnicity, gender, sexuality, disability, or other protected class. All Texas businesses are expected to prevent harassment in the workplace and train employees on what behaviors could be considered sexual or other harassment. If a company is negligent in acting against such harassment, employees may be able to sue over a hostile work environment, which means all Texas companies should take such accusations seriously and report to them to the Texas Workforce Commission when appropriate.
Texas Right-to-Work Laws and Union Laws
Texas is a state where union status is illegal to consider during hiring. Under these right-to-work laws, it is illegal to deny employment based on membership or non-membership in a union or require new employees to join unions. In addition, the Texas Labor Code prohibits unions from stopping individual employees and union members from bargaining individually with employers.
While few industries are unionized in Texas today, all employees in the state have the right to concerted effort to promote better working conditions and fair wages. This right is protected by federal labor union laws. All Texas employers must allow unions and other protected collective actions to carry on free from reprisal or punishment.
What is the Texas Payday Law?
The Texas Payday Law is a lab applied to private companies in Texas to prevent wage abuse. This law mandates prompt biweekly payment of employees and prohibits abusive wage deductions.
Can my employer make me sign a non-compete agreement in Texas?
Any Texas employer can require you to sign a non-compete agreement as a condition of your employment. That said, only limited, carefully drafted non-compete clauses will hold up in federal and state courts.
If I report my employer for violating Texas labor law, can I be fired?
No. Texas whistleblower laws should protect you from losing your job in retaliation for reporting an illegal activity.
Where do they have strictest employment laws in Texas?
Labor laws are mostly consistent across Texas. Whether you are located in Austin, Dallas, or San Antonio, you are likely to face the same regulations and restrictions in employment law. Cities like Austin enforce higher employment protections and a higher minimum “living wage,” but these regulations usually only apply to government workers and subcontractors. If you are concerned about the differences in employment law that may affect you in your city, it may help to speak with a Texas employment lawyer.