The Texas Workforce Commission publishes the official Texas employment law handbook as a free PDF called the Texas Guidebook for Employers, and you can download the 2024 edition directly from the TWC website.{1Texas Workforce Commission. Texas Guidebook for Employers (PDF)} The guidebook, formerly titled “Especially for Texas Employers,” is also readable chapter by chapter at efte.twc.texas.gov if you’d rather not grab the full file.{2Texas Workforce Commission. Texas Guidebook for Employers} It walks through hiring, pay rules, unemployment taxes, workplace policies, employee handbooks, and the handling of unemployment claims.
One line the TWC prints on page one is worth repeating: the guidebook is informational. It does not create enforceable rights and it is not a substitute for legal advice. Treat it as a roadmap pointing you to the actual statutes.
At-Will Employment Is the Default
Texas is an at-will state. Either side can end the employment relationship at any time, for any reason that isn’t illegal, with no notice required.{3Texas Workforce Commission. Pay and Policies – General} An employer can change pay, schedules, or duties without warning. An employee can walk out the same way.
Two things override the default. A written contract setting a term or specific termination conditions controls over at-will. And under Sabine Pilot Service, Inc. v. Hauck, an employer cannot fire a worker solely for refusing to commit a crime.{4Justia. Sabine Pilot Service, Inc. v. Hauck} The word “solely” does real work in that opinion. It’s a narrow carve-out, and it’s essentially the only judge-made limit on at-will Texas recognizes.
Texas Payday Law
Chapter 61 of the Texas Labor Code sets when wages have to be paid. Exempt employees (usually salaried executive, administrative, or professional workers) must be paid at least once a month. Non-exempt employees must be paid at least twice a month, with each pay period covering roughly the same number of days.{5State of Texas. Texas Labor Code Chapter 61 – Payment of Wages} If an employer doesn’t designate paydays, the statutory default is the 1st and 15th. Paydays must be posted where employees can see them.
Final Paychecks
If an employer discharges a worker, the final paycheck is due within six calendar days of the discharge date. A worker who quits gets final wages by the next regularly scheduled payday.{6State of Texas. Texas Labor Code 61.014 – Payment After Termination of Employment} Those deadlines cover all earned wages, including commissions and bonuses owed under a prior agreement. Miss the deadline and the worker can file a wage claim through the TWC.
Wage Deductions
An employer can only withhold part of your pay in three situations: a court orders it, state or federal law requires it, or you’ve authorized the specific deduction in writing.{7State of Texas. Texas Labor Code 61.018 – Deduction From Wages} Taxes, child support, and employee-authorized insurance premiums fit. Docking pay for cash register shortages or broken equipment without written consent is where employers run into claims.
Federal law adds a floor on top. Even with written authorization, deductions for uniforms, tools, or other employer-required items cannot cut the worker’s effective pay below the federal minimum wage of $7.25 per hour or reduce required overtime.{8U.S. Department of Labor. Fact Sheet: Deductions From Wages for Uniforms and Other Facilities Under the Fair Labor Standards Act}
Minimum Wage and Overtime
Texas has no state minimum wage above the federal floor, so the Fair Labor Standards Act controls. The federal minimum is $7.25 per hour, unchanged since 2009.{9U.S. Department of Labor. State Minimum Wage Laws}
Non-exempt workers get overtime at one and a half times their regular rate for hours over 40 in a single workweek. The FLSA defines a workweek as a fixed, recurring 168-hour period. You cannot average hours across two weeks to dodge overtime.{10U.S. Department of Labor. Overtime Pay} Weekend or holiday work doesn’t automatically trigger overtime unless the weekly total crosses 40.
Whether a worker is exempt depends on both duties and salary. After a federal court in Texas vacated the Department of Labor’s 2024 rule, the enforced minimum salary for the executive, administrative, and professional exemptions is $684 per week, or $35,568 per year. Highly compensated employees must earn at least $107,432 per year.{11U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemption} Salary alone doesn’t make someone exempt. The actual duties have to fit one of the recognized categories: executive, administrative, professional, outside sales, or computer-related.
Discrimination and Retaliation
Chapter 21 of the Texas Labor Code, sometimes still called the Texas Commission on Human Rights Act, prohibits employment discrimination based on race, color, disability, religion, sex, national origin, or age.{12State of Texas. Texas Labor Code 21.051 – Discrimination by Employer} It covers hiring, firing, pay, promotions, and other terms of employment. The law reaches private employers with 15 or more employees for each working day in at least 20 calendar weeks of the current or preceding year. Government employers are covered regardless of size.{13State of Texas. Texas Labor Code 21.002 – Definitions}
Age discrimination has a size gap worth knowing. Federal ADEA protection for workers 40 and older applies at 20 employees. State coverage starts at 15. A Texas employer with 15 to 19 workers is covered by state age protections but not the federal ADEA, which affects where a complaint should be filed.
Retaliation
It’s a separate violation for an employer to retaliate against someone who opposes a discriminatory practice, files a complaint, or participates in an investigation or hearing.{14State of Texas. Texas Labor Code 21.055 – Retaliation} Retaliation can look like a demotion, a pay cut, a transfer to a dead-end role, or steady day-to-day hostility meant to push someone out. A worker whose underlying discrimination claim fails can still win on retaliation if the employer took adverse action after the complaint. Courts treat the two claims independently.
Damages Caps
Remedies for unlawful discrimination include reinstatement, promotion, and back pay (capped at two years before the complaint was filed). For intentional discrimination, compensatory and punitive damages are available but capped by employer size:
- 15–100 employees: up to $50,000
- 101–200 employees: up to $100,000
- 201–500 employees: up to $200,000
- More than 500 employees: up to $300,000
Those caps mirror the federal Title VII structure. Punitive damages are not available against government employers.
Family and Medical Leave
Texas has no state family or medical leave law for private employers, so the federal FMLA stands alone. FMLA covers private employers with 50 or more employees. An eligible worker must have been employed at least 12 months and worked at least 1,250 hours in that period.{15U.S. Department of Labor. Fact Sheet 28 – The Family and Medical Leave Act} There’s also a location rule: the employer must have at least 50 employees within a 75-mile radius of the worker’s job site.{16U.S. Department of Labor. Family and Medical Leave Act}
Eligible workers get up to 12 workweeks of unpaid, job-protected leave per year for:
- Birth, adoption, or foster placement of a child, including bonding time
- A serious health condition that keeps the employee from performing the job
- Care for a spouse, child, or parent with a serious health condition
- Qualifying needs tied to a family member’s foreign military deployment
Military caregiver leave is longer: up to 26 workweeks in a single 12-month period to care for a servicemember or recent veteran with a serious injury or illness.{17U.S. Department of Labor. Fact Sheet 28F – Reasons That Workers May Take Leave Under the FMLA} Employers under the 50-worker threshold have no federal obligation to provide unpaid medical leave, which leaves a large share of the Texas workforce without FMLA protection.
Workers’ Compensation Is Elective
Texas diverges from almost every other state here. Private employers are not required to carry workers’ compensation insurance; coverage is elective.{18State of Texas. Texas Labor Code 406.002 – Coverage Generally Elective} An employer that opts out is a “nonsubscriber.” The trade-off is significant. Nonsubscribers lose the common-law defenses that normally shield employers from injured-worker suits: they cannot argue the employee’s own negligence caused the injury, that a coworker caused it, or that the employee assumed the risk. That makes personal injury lawsuits against nonsubscribers much easier to win.
Nonsubscribers still have duties. They must post workplace notices in English, Spanish, and any other language common among their workforce, stating that there is no workers’ comp coverage. They must file annual no-coverage notices with the Texas Department of Insurance between February 1 and April 30, and (if they have five or more employees) report work-related injuries involving more than one day of lost time.{19Texas Department of Insurance. Employer E-File Online Reporting} Many nonsubscribers buy occupational accident insurance instead, though it typically provides narrower benefits than a traditional workers’ comp policy.
OSHA and Workplace Safety
Federal OSHA has direct jurisdiction over most private employers in Texas. The state doesn’t run its own OSHA-approved program. Every covered employer must display the “Job Safety and Health: It’s the Law” poster where employees can see it.{20U.S. Department of Labor. Workplace Posters}
Reporting windows are short. A work-related fatality must be reported to OSHA within 8 hours. An inpatient hospitalization, amputation, or loss of an eye must be reported within 24 hours.{21Occupational Safety and Health Administration. Recordkeeping} A missed deadline is itself a citable violation, separate from whatever caused the injury.
Posters, Records, and New Hire Reporting
Running a compliant Texas workplace means keeping the right records and posting the right notices under both state and federal rules.
Required Posters
The TWC requires employers to display posters covering the Payday Law, Unemployment Compensation, and workers’ compensation coverage status. A combined poster addresses both Payday Law and unemployment requirements in one document.{22Texas Workforce Commission. Posters for the Workplace} All employers, whether or not they carry workers’ comp, must post a notice informing employees of coverage status. Federal posters for OSHA, FLSA, and FMLA (where applicable) are required on top of the state ones. TWC posters are free.
Record Retention
Federal law requires payroll records for at least three years.{23U.S. Department of Labor. Fact Sheet 21 – Recordkeeping Requirements Under the Fair Labor Standards Act} Records used to compute wages (time cards, work schedules, rate tables) must be kept at least two years. Texas unemployment tax rules extend payroll record retention to four years, which effectively becomes the safest baseline for satisfying both regimes.{24Texas Workforce Commission. Recordkeeping – General}
Personnel records tied to anti-discrimination compliance (applications, hiring decisions, termination documents) must be kept for one year after the employment action, or one year after involuntary termination, whichever is later.{25U.S. Equal Employment Opportunity Commission. Recordkeeping Requirements}
Form I-9 follows its own clock: keep each form three years after the hire date or one year after employment ends, whichever is later.{26U.S. Citizenship and Immigration Services. Retaining Form I-9} For short-tenured workers the three-year-from-hire rule controls; for longer-tenured workers the one-year-after-separation rule usually controls.
New Hire Reporting
Texas employers must report every new hire and rehire to the Office of the Attorney General’s Child Support Division within 20 calendar days of the employee’s first wage-earning day.{27Texas Attorney General. New Hire Reporting} The reporting rule applies to every new hire, not just those with known child support obligations. Reports can be submitted online, by fax, or by mail, and must include the employee’s name, address, and Social Security number along with the employer’s federal tax identification number.