Labor and Employment Law Overview: Texas

Labor and Employment Law Overview requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: XpertHR Editorial Team

Summary

  • An employer in Texas is prohibited from discriminating against employees based on a variety of factors. See EEO, Diversity and Employee Relations.
  • An employer in Texas must report information about all new or rehired workers within 20 days of the effective hire date. See Recruiting and Hiring.
  • Texas adopts the federal minimum wage rate and does not require an employer to provide employees with breaks. See Wage and Hour.
  • State law establishes requirements related to payment of wages, paydays, earnings statements, wage deductions and health care continuation. See Pay and Benefits.
  • Leave requirements in Texas include military leave, jury duty leave and court attendance leave. See Attendance and Leave.
  • Texas governs an employer's liability for providing employment references. See Organizational Exit.

Introduction to Employment Law in Texas

Texas is generally considered an employer-friendly state.

Select Texas employment requirements are summarized below to help an employer understand the range of employment laws affecting the employer-employee relationship in the state. An employer must comply with both federal and state law.

An employer must also comply with applicable municipal law obligations affecting the employment relationship, in addition to complying with state and federal requirements.

EEO, Diversity and Employee Relations

Key Texas requirements impacting EEO, diversity and employee relations are:

Protected Classes

Texas law regarding discrimination in employment essentially mirrors federal law and protects the same classes of workers as federal law. Private Texas employers with 15 or more employees, and state and local public employers regardless of size, are prohibited from discriminating in employment on the basis of:

  • Race;
  • Color;
  • National origin;
  • Religion;
  • Sex;
  • Age (age 40 or older); and
  • Disability.

Discrimination Against Military Personnel Prohibited

Texas law also provides protection to certain military personnel. Specifically, the law prohibits an employer from taking adverse employment action against employees because they are a member of the Texas state military forces, including the state guard and the National Guard, and are on state duty.

Discrimination for Complying With Evacuation Orders Prohibited

Texas law prohibits an employer from discriminating against employees who comply with an evacuation order by leaving their place of employment. Texas employees who followed evacuation orders prior to Hurricane Ike were protected under this law. It is important to note that the law excludes:

  • Medical services personnel as long as the employer can provide safe shelter; and
  • Individuals responsible for public safety or for restoring vital services.

Retaliation

An employer may not retaliate against employees for opposing discriminatory, or otherwise unlawful, employment practices. Therefore, if an employee makes a claim of discriminatory employment practices, or supports a coworker's or former coworker's claim, an employer may not punish the employee. Punishment may come in many forms. It can be termination or even a lateral change to a less desirable position. Either way, an employer may not retaliate against, and must have measures in place to prevent employees from retaliating against, protected employees.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on EEO, diversity and employee relations practices in Texas can be found in the Texas Employee Handbook Table of Contents, EEO - Discrimination: Texas, EEO - Harassment: Texas, EEO - Retaliation: Texas, Texas Workplace Labor and Employment Law Posters and Does This Law Apply to My Organization in Texas? Federal requirements can be found in EEO - Discrimination: Federal, EEO - Harassment: Federal and EEO - Retaliation: Federal.

Recruiting and Hiring

Within 20 days of the effective hire date, an employer is required to provide information about all new or rehired workers to the Employer New Hire Reporting Operations Center in the Texas Office of the Attorney General. The purpose of this requirement is to assist state agencies in:

  • Detecting and preventing fraud; and
  • Recovering overpayments.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on recruiting and hiring practices related to new hire reporting in Texas can be found in New Hire Reporting: Texas. Federal requirements can be found in New Hire Reporting: Federal.

Wage and Hour

Key Texas requirements impacting wages and hours are:

Minimum Wage

Texas adopts the federal minimum wage rate by reference.

Meal and Rest Breaks

Texas law does not require an employer to provide employees with breaks. However, if breaks are given, an employer must follow federal guidelines.

Child Labor

Child labor laws in Texas restrict the occupations in which minors may be employed and the number of hours and times during which minors (other than those ages 16 and 17) may work. Minors may be asked to supply a certificate of age.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on wage and hour practices in Illinois can be found in the Texas Employee Handbook Table of Contents, Minimum Wage: Texas, Hours Worked: Texas and Child Labor: Texas Federal requirements can be found in Minimum Wage: Federal, Hours Worked: Federal and Child Labor: Federal.

Pay and Benefits

Key Texas requirements impacting pay and benefits are:

Payment of Wages - Frequency

Employees that are exempt from the Fair Labor Standard Act's overtime provisions must be paid at least once per month, and nonexempt employees must be paid twice per month. To the extent possible, an employer should spread bimonthly payments out over an equal number of days (e.g., on the first and 15th of each month).

Designating Paydays

An employer may designate paydays consistent with state law. If, however, an employer does not designate paydays, paydays will default to the first and 15th of each month. If an employee is not paid on a payday for any reason, including the employee's absence, the employer must pay those wages on another business day as requested by the employee.

Wage Deductions

Under state law, wages may be withheld only when the employer:

  • Is authorized to do so by state or federal law (e.g., IRS withholding);
  • Is required to do so by a court (e.g., court-ordered child support payments); or
  • Has the employee's written authorization for the deduction and, then, only for a lawful purpose.

An employer should have standard written authorization forms.

Earnings Statements

The Texas Minimum Wage Act requires that an employer provide an earnings statement to its employees with the following information:

  • Employee's name;
  • Pay rate;
  • Deductions;
  • Hours worked;
  • Rate of pay;
  • Net pay; and
  • Either the hours worked or the units produced (if pay based on a piece rate), whichever is applicable.

Final Paycheck

An employer must comply with the following requirements regarding an employee's final paycheck:

  • If an employee quits, the employee must be paid in full at the next regular payday.
  • If an employee is terminated, the employee must be paid in full within six days.

Payment of Accrued Vacation Time or Paid Time Off Upon Separation

Whether an employee is entitled to receive accrued and unused paid time off or vacation days upon separation depends on the employer's written policies or the terms of any employment agreement. The terms of the policy or agreement will be enforced. Consequently, it is important that a Texas employer reviews its policies and makes sure they are clear. Also, any vacation-forfeiture policy (i.e., policy stating that accrued and unused vacation pay is forfeited upon termination) should be in writing, and an employer should consider placing limitations on:

  • The number of paid time off or vacation days an employee may accrue; and
  • The number of paid time off or vacation days an employee may roll over from one calendar year to the next.

Continuation of Health Care Coverage

Employees working for smaller employers (i.e., employers with fewer than 20 employees) are exempt from the federal Consolidated Omnibus Budget Reconciliation Act (COBRA). Texas group health plans issued to employers generally require that continuation coverage be extended for nine months to individuals not covered by federal COBRA and for an additional six months following COBRA coverage to individuals covered by federal COBRA.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on pay and benefit practices in Texas can be found in Payment of Wages: Texas, Involuntary and Voluntary Pay Deductions: Texas, Health Care Continuation (COBRA): Texas, Texas Workplace Labor and Employment Law Posters and Does This Law Apply to My Organization in Texas? Federal requirements can be found in Payment of Wages: Federal, Involuntary and Voluntary Pay Deductions: Federal and Health Care Continuation (COBRA): Federal.

Attendance and Leave

Texas has several laws relating to required leaves for employees, which cover all employers. These laws include:

  • Military leave;
  • Jury duty leave;
  • Court attendance leave;
  • Emergency evacuation leave; and
  • Voting leave.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on attendance and leave practices in Texas can be found in the Texas Employee Handbook Table of Contents, Jury Duty: Texas, USERRA: Texas and Other Leaves: Texas. Federal requirements can be found in Jury Duty: Federal, USERRA: Federal and Other Leaves: Federal.

Organizational Exit

Obtaining information regarding a prospective employee's job performance with his or her prior employer can be difficult. To avoid defamation lawsuits, many employers disclose only the employee's or former employee's title, dates of employment and salary history. Several states, such as Texas, have enacted job reference immunity statutes.

These statutes provide employers with an express right to share information regarding an employee's or former employee's job performance with prospective employers.

Texas' job reference immunity statute does not allow an employer to disclose certain information regarding nurses. Specifically, if a licensed or vocational nurse refuses to violate board rules, information concerning the nurse's conduct may not be disclosed to prospective employers. Consequently, an employer in the healthcare industry should exercise a greater level of care when providing references for nurses.

HR should be aware that this law does not prevent employees who believe the information provided was inaccurate or untrue from instituting a lawsuit against the employer. Lawsuits can be costly, unpredictable and, at the end, the employer may be penalized. Therefore, before doing away with their neutral reference policies, an employer should weigh the risk of liability against the benefit of providing more extensive employment references.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on job reference immunity in Texas can be found in Performance Appraisals: Texas. Federal requirements can be found in Performance Appraisals: Federal.