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Nobody ever said running a business was easy. As an employer, you have many things to handle, and compliance is just one of them.
In addition to federal regulations, each state has its own share of employment-related laws that business owners need to be aware of. Here, we’re highlighting some of these key state-specific requirements, and offering guidance to help you keep up.
Bear in mind that this list is not comprehensive, and there may be local or industry-specific employment requirements that your business needs to comply with. It’s best to consult with counsel to ensure compliance with all applicable laws, as Justworks does not provide legal advice.
Payroll Tax Accounts
Because Justworks reports state unemployment taxes on behalf of customers who utilize Justworks’ PEO services, under Justworks unemployment account number In Texas, employers need to close their Texas unemployment and withholding accounts prior to joining the Justworks platform. Linked here are the steps you’ll need to take: Texas - State Unemployment Insurance
Recruiting & Hiring Practices
Fair Chance Hiring Ordinances
Texas does not presently have a statewide ban-the-box law applicable to private employers. However, two localities–Austin and DeSoto–have fair chance hiring ordinances that are currently in effect for applicable private employers. These ordinances generally prohibit employers from implying in job postings that criminal history is an automatic disqualification to employment and from asking about the criminal record of job applicants during the initial application phase, or until a conditional job offer has been made.
Austin: Fair Chance Hiring
DeSoto: Fair Chance Hiring
Mandatory Background Checks
In Texas, certain workers must undergo background checks. This includes workers in home health or personal assistance services, those entering homes for services, certain school staff, childcare workers, and employees in healthcare facilities like nursing homes and mental health services.
Mineral*: Texas Applicant and Employee Screening
Independent Contractors
When deciding whether to classify workers as employees or independent contractors, there are a few things your business should consider, including the different tests that apply under varying federal and state employment laws, and the potential penalties and other liabilities for misclassifying employees as independent contractors.
You can read our general Help Center article on contractors, and view information on how to determine if someone is a contractor or employee in Texas in the relevant section at the link below.
Texas Workforce Commission: Classifying Employees & Independent Contractors
Mineral*: Texas Independent Contractors
Pay Requirements
Minimum Wage & Overtime
The hourly minimum wage and overtime requirements in Texas are currently the same as the Federal minimum wage and overtime requirements. Texas employers can find the most up-to-date minimum wage requirements from the Texas Workforce Commission.
Mineral*: Texas Minimum Wage and Overtime
Texas Fiscal Management Division: Overtime
Meal and Rest Laws
While Texas does not have a general law regarding meal and rest periods, retail employers are prohibited from mandating that employees work seven consecutive days. Employees are entitled to a minimum of one consecutive 24-hour period off for rest or religious observance within each seven-day cycle. This entitlement is in addition to their regular daily rest periods.
Mineral*: Texas Meal and Rest Periods
Lactation Accommodation Laws
Employers in Texas should be aware that nursing mothers have the right to breastfeed or express milk anywhere they are authorized to be. While not required, employers can register as a designated Texas Mother-Friendly Worksite if they implement policies that accommodate nursing mothers. These policies must include allowing flexible work schedules for pumping breaks, providing private and accessible locations for pumping, ensuring access to clean water and sinks for hygiene, and offering safe storage options for breast milk.
Texas Health and Human Services: Worksite Lactation Laws
Mineral*: Texas Lactation Accommodations
Leave
Paid Time Off and Other Paid Leave Requirements
Texas does not require employers to provide employees with paid time off, vacation benefits, or sick leave. However, if you choose to provide these benefits, you must comply with the terms of your established policies.
Paid Time Off to Vote
Texas employers are obligated to provide paid leave for employees to vote on election days if there is no two-hour window available before or after the employee's scheduled shift when the polls are open.
Mineral*: Texas Voting Leave
Harassment & Discrimination
In addition to protections under federal law, Texas law prohibits employment discrimination, by employers covered under Texas’ anti-discrimination laws, based on membership in any protected class, including race, color, religion, sex, sexual orientation, gender identity, national origin, age, or disability.
Texas Workforce Commission: Employment Discrimination
Mineral*: Texas Employment Discrimination and Accommodations
Separation
Final Wage Payment Requirements
In Texas, when an employee separates involuntarily, final wages must be provided within six calendar days of separation, as the next scheduled payday may not align with this timeframe. Employers should be mindful of this six calendar day deadline prior to initiating separation, ensuring that the final payment is scheduled appropriately. In the case of voluntary separation, final wages should be issued on the next regularly scheduled payday. In all cases, final wages under the Texas Payday Law include compensation for services provided, commissions, bonuses, and certain fringe benefits subject to policy or a separate agreement between employer and employee.
Texas Workforce Commission: Texas Payday Law
Vacation Payout Requirements
Accrued, unused vacation time need not be paid out to an employee unless the employer’s policy requires it. Employers should clearly set forth in writing any policy with respect to unused vacation.
Mineral*: Texas Separation
Separation Notice Requirements
Employers must provide a separation notice, Texas Workforce Commission Payday Law Poster, Notice Y-10C(0420), to your employee at the time of separation from employment.
Business Closings and Layoffs
The Federal Worker Adjustment and Retraining Notification (WARN) Act imposes certain notices and other obligations on covered businesses before conducting large-scale business closures, layoffs, or relocations.
For more information, visit the links below.
U.S. Department of Labor: Worker Adjustment and Retraining Notification (WARN) Act Advisor
Texas Workforce Commission: Worker Adjustment & Retraining Notification Notices (WARN)
Mineral*: Texas Layoffs
Notes
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Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.