Texas Labor Laws 2026: Complete HR & Employer Compliance Guide

Accurate as of May 1, 2026. This guide is informational and not legal advice. For specific situations, consult licensed Texas employment counsel.

Texas is one of the most employer-friendly states in the country — and understanding exactly what that means is the first step to staying out of trouble. The state has no minimum wage above the federal floor, no mandatory paid sick leave, no daily overtime requirement, and no state income tax. What Texas does have is a lean but real set of obligations around wage payment timing, discrimination, workers' compensation, and hiring — plus every applicable federal law layered on top.

The "employer-friendly" reputation can lull HR teams into underestimating their actual exposure. The Texas Payday Law has strict final paycheck deadlines and real penalties. The Texas Commission on Human Rights Act covers harassment and discrimination with mandatory agency exhaustion before litigation. And federal law — the FLSA, FMLA, Title VII, ADA, ADEA, OSHA — applies to virtually every Texas employer with a full-time workforce.

This guide covers every Texas and federal employment law obligation that HR teams operating in the state need to own. If you handle complaints, terminations, accommodation requests, or investigations in Texas, the documentation that becomes your defense lives in a purpose-built HR platform — not a filing cabinet.

What Texas HR Teams Should Know First in 2026

Texas did not pass sweeping new employment laws in the 2025 legislative session. The 89th Legislature focused on other priorities, and the state's labor law landscape is largely unchanged from 2024 going into 2026. The federal changes — the FLSA overtime rule rollback, the FTC non-compete ban dying, the PWFA's accommodation requirements — are where the action is for Texas employers.

The key facts for 2026:

Minimum wage: $7.25/hour — Texas adopts the federal floor; no state increase has been enacted; no city can set a higher rate
Exempt salary threshold: $684/week ($35,568/year) — the Biden DOL's 2024 overtime rule was struck down by a federal court in Texas; the 2019 threshold is back in effect
No statewide paid sick leave — Austin, Dallas, and San Antonio ordinances remain blocked by courts; no local ordinance is currently enforceable
Workers' comp is optional — Texas is the only state where private-sector workers' compensation is not mandatory; "non-subscriber" status carries its own legal exposure
Sexual harassment claims: 300-day filing window — Texas HB 21 (2021) extended the deadline; all other TCHRA claims remain at 180 days
PWFA accommodations required — the federal Pregnant Workers Fairness Act, in effect since June 2023 with final regulations effective June 2024, applies to all Texas employers with 15 or more employees
FTC non-compete ban is dead — the federal ban never took effect; Texas non-competes remain governed by state common law reasonableness standards

Texas Minimum Wage and Wage Floors in 2026

Texas has no minimum wage above the federal floor. Under Texas Labor Code § 62.051, the state adopts the federal minimum wage rate by reference. For 2026, that means $7.25 per hour — unchanged since July 24, 2009.

Texas law also preempts cities and counties from setting their own higher minimum wage rates. This is the opposite of what California and New York allow. No Texas municipality can create a local wage floor above the state rate. The result is a single, uniform minimum wage across the entire state, making compliance straightforward compared to states with a patchwork of local ordinances.

Tipped employees in Texas

Texas permits employers to pay tipped employees a cash wage of $2.13 per hour, using a tip credit of up to $5.12 per hour — as long as tips bring total compensation to at least $7.25 per hour. A "tipped employee" under Texas Labor Code § 62.052 is one who consistently receives more than $20 per month in tips. If tips don't close the gap in any workweek, the employer must make up the difference.

Tip pooling among employees is permitted but cannot include managers, supervisors, or owners under federal FLSA rules.

The exempt employee salary threshold

Because Texas has no state overtime law above the FLSA, the exempt salary threshold for white-collar exemptions is determined entirely by federal rules. That threshold is currently $684 per week ($35,568 annually), following the November 2024 federal court ruling in the Eastern District of Texas that vacated the Biden DOL's planned increases.

To qualify for any white-collar exemption, an employee must meet the salary basis test, the salary level test ($684/week), and the applicable duties test. The duties test is equally required — meeting the salary threshold alone is not sufficient to make an employee exempt.

What the "One Big Beautiful Bill" tip deduction means for Texas employers

Signed by President Trump on July 4, 2025, the One Big Beautiful Bill Act allows eligible tipped employees to claim a federal income tax deduction on qualified tips received from their occupation. The deduction is available from January 1, 2025 through December 31, 2028, with a maximum of $25,000 per year. The occupation must be one the IRS classifies as customarily and regularly receiving tips, and tips must be reported on a Form W-2 or Form 4137. The deduction phases out for earners above $150,000 ($300,000 for joint filers). This is a tax provision — not an employer wage obligation — but HR teams at restaurant, hospitality, and service employers should be prepared to field questions about it.

Overtime: Texas Follows the Federal FLSA

Texas has no state overtime law. All overtime obligations for Texas employers come from the federal Fair Labor Standards Act. The rules are straightforward compared to California or other states with daily overtime requirements:

Overtime threshold: nonexempt employees must receive at least 1.5x their regular rate of pay for all hours worked over 40 in a workweek
No daily overtime: Texas employers owe no overtime premium for hours over 8 in a single day, regardless of how many hours are worked that day
No seventh-day rule: working seven consecutive days does not trigger any automatic premium in Texas — only the 40-hour weekly threshold matters
Regular rate: includes nondiscretionary bonuses, shift differentials, and most other cash compensation — not just base hourly pay

Employers must maintain accurate records of hours worked and wages paid for at least 3 years under the FLSA. Misclassifying an employee as exempt — or simply failing to track hours for hourly workers — is the most common FLSA violation in Texas workplaces.

Breaks and meal periods: no Texas state requirement

Texas law does not require employers to provide meal breaks or rest periods to employees 18 or older. There is no state-mandated break schedule. Federal guidelines still apply when breaks are voluntarily provided: short breaks of 5–20 minutes are generally compensable work time under the FLSA; bona fide meal periods of 30 minutes or more are not compensable if the employee is fully relieved of duties.

Employers with employees under 18 must follow the Texas child labor rules under Texas Labor Code Chapter 51, which restrict hours and require breaks for minors in certain industries.

The Texas Payday Law: When and How Wages Must Be Paid

Texas Labor Code Chapter 61 — the Texas Payday Law — is the primary state statute governing wage payment timing, pay frequency, deductions, and final pay. It operates alongside but separately from the federal FLSA. Violating the Payday Law can mean wage claims filed with the Texas Workforce Commission (TWC), administrative penalties, and triple damages for willful nonpayment.

Pay frequency requirements

Nonexempt employees: must be paid at least twice per month (semi-monthly) on regularly scheduled paydays
Exempt employees: may be paid once per month

Employers must designate paydays in advance and post a notice in a conspicuous location showing the designated paydays. If the pay schedule changes, employees must receive advance notice.

Pay stub requirements

Texas does not have a statute requiring itemized pay stubs in the specific detail that California or New York mandates. However, the Texas Minimum Wage Act requires employers to provide employees with a written earnings statement each pay period containing sufficient detail to allow the employee to determine whether they were paid correctly. The FLSA additionally requires employers to keep accurate records of wages paid and hours worked.

Best practice — and the most effective protection against wage disputes — is to provide an itemized pay stub every pay period showing gross wages, all deductions itemized (taxes, benefits, garnishments), and net pay. Electronic pay stubs are permissible if employees have reasonable access. Employers who rely on verbal explanations of pay rather than written stubs face significant credibility problems when a TWC wage claim arrives.

Permissible and impermissible wage deductions

The Texas Payday Law restricts what employers may deduct from paychecks. Allowed deductions without employee authorization include federal and state tax withholding, court-ordered garnishments, and legally required deductions. Deductions for cash shortages, breakage, uniforms, equipment, or other business expenses require specific written authorization from the employee — and even then cannot reduce wages below the minimum wage.

Final paycheck timing in Texas

Texas has specific final paycheck deadlines that differ by the type of separation:

Involuntary termination (fired, laid off, discharged): final paycheck due within 6 calendar days of discharge, under Texas Labor Code § 61.014
Voluntary resignation: final paycheck due on the next regularly scheduled payday following the employee's last day

Texas does not impose automatic "waiting time" penalties like California does — but the TWC can order payment and assess an administrative penalty of up to $1,000 per violation for bad-faith nonpayment. Employers may not withhold a final paycheck because an employee has not returned company property or completed a timesheet. Those are separate matters governed by written agreement, not a basis for withholding wages.

Vacation and PTO at separation

Texas does not require employers to pay out accrued, unused vacation or PTO at termination. Entitlement is determined entirely by the employer's written policy. If the policy promises a payout, the Texas Payday Law makes that obligation enforceable. "Use-it-or-lose-it" vacation policies are lawful in Texas when the written policy clearly says so. Employers without a written policy on PTO payout at separation should create one — an unclear or silent policy creates unnecessary disputes.

Wage claim process and deadlines

Employees who believe they have not been paid wages owed may file a wage claim with the TWC Wage and Hour Program. The filing deadline is 180 days from the date the wages were due — a strict deadline that cannot be extended. Claims filed after 180 days are dismissed. Employees may alternatively file a private lawsuit under the Texas Payday Law or a federal FLSA complaint with the U.S. Department of Labor's Wage and Hour Division, which carries a 2-year limitation period (3 years for willful violations).

Discrimination and Harassment: The Texas Commission on Human Rights Act

Texas Labor Code Chapter 21 — the Texas Commission on Human Rights Act (TCHRA) — is the state's primary employment anti-discrimination statute. TCHRA largely mirrors Title VII, the ADA, and the ADEA at the federal level, but with important procedural differences Texas employers must understand.

Who does the TCHRA cover?

Employer threshold: 15 or more employees (including state and local governments)
Sexual harassment claims: employer threshold is 1 or more employees — enacted by Texas SB 45 (2021), which removed the 15-employee threshold specifically for sexual harassment claims

TCHRA protected classes

Texas Labor Code Chapter 21 prohibits employment discrimination based on:

Race and color
National origin
Religion
Sex (including pregnancy, childbirth, and related medical conditions)
Age (40 and older)
Disability
Genetic information

The TCHRA does not explicitly enumerate sexual orientation or gender identity as protected classes under state law. Federal Title VII protections following Bostock v. Clayton County (2020) provide coverage for sexual orientation and gender identity discrimination for Texas employers with 15 or more employees. Employers should be aware that the federal protection applies even where state law is silent.

How TCHRA harassment liability works

TCHRA prohibits harassment based on any protected characteristic. Sexual harassment is the most litigated category in Texas. The two primary theories are quid pro quo harassment — where employment benefits are conditioned on submitting to unwanted conduct — and hostile work environment harassment, where pervasive conduct alters the terms of employment.

Texas SB 45 (2021) also added a heightened employer response standard for sexual harassment complaints. Texas Labor Code § 21.141 now provides that an employer commits an unlawful employment practice if sexual harassment occurs and the employer or the employer's agents or supervisors knew or should have known and "fail to take immediate and appropriate corrective action." This "immediate and appropriate" standard requires faster and more decisive action than many employers historically took. The warning signs of a hostile work environment — escalating conduct, supervisor involvement, isolated or targeted individuals — require an immediate response, not a slow investigation.

Every Texas employer, regardless of size, should maintain:

A written harassment policy distributed to all employees
A complaint procedure with multiple reporting options (not just the direct supervisor)
Prompt, documented investigation of every complaint
Consistent, documented corrective action
Zero retaliation against employees who report

TCHRA filing deadlines: the 180-day rule (and the 300-day exception)

Before filing a TCHRA lawsuit in Texas state court, employees must first exhaust administrative remedies by filing a charge with the TWC Civil Rights Division or the EEOC. The filing deadlines are:

Most TCHRA claims (race, national origin, age, disability, etc.): 180 days from the date of the alleged discriminatory act
Sexual harassment claims: 300 days from the date of the last act of harassment — extended by Texas HB 21 (effective September 1, 2021)
Federal claims (Title VII, ADA, ADEA) filed with the EEOC: 300 days in Texas because the TWC is a designated fair employment practices agency

Missing the TCHRA deadline destroys the right to bring state law claims. Once the TWC issues a right-to-sue letter, the employee has 60 days to file a civil suit in Texas state court.

TCHRA damage caps

TCHRA caps compensatory and punitive damages based on employer size:

15–100 employees: $50,000
101–200 employees: $100,000
201–500 employees: $200,000
501 or more employees: $300,000

Back pay and front pay are not subject to these caps. Federal Title VII caps are the same — but federal lawsuits carry no cap under Section 1981 for race discrimination claims, which is why plaintiffs often plead multiple theories.

Where to file discrimination complaints in Texas

TWC Civil Rights Division: TCHRA claims; 180-day deadline (300 days for sexual harassment)
EEOC: federal Title VII, ADA, ADEA, GINA, PWFA claims; 300-day deadline in Texas; cross-files with TWC in most cases

Texas at-Will Employment and Wrongful Termination

Texas is a strong at-will employment state. Under Texas common law, either the employer or the employee may terminate the employment relationship at any time, for any reason or no reason, without notice — as long as the reason is not unlawful. No "just cause" is required to terminate an employee in Texas.

The at-will rule has meaningful limits. Terminations that violate federal or state anti-discrimination law, retaliate against protected activity, or breach an express employment contract are unlawful. The most common wrongful termination claims in Texas involve:

Discrimination or retaliation under the TCHRA or federal statutes
Retaliation for filing OSHA complaints, workers' comp claims, or wage claims
Termination in violation of an express written employment contract or offer letter with a "for cause" provision
Termination in violation of the federal FMLA or the federal WARN Act

Documentation is the employer's primary defense in any wrongful termination claim. Performance issues, policy violations, and behavioral problems should be documented consistently and contemporaneously — in writing, in a system that timestamps entries and preserves the record. Building a culture that genuinely prevents workplace retaliation is as important as the documentation itself.

Leave Laws in Texas

Texas is notably sparse on mandatory leave requirements for private employers. The state relies almost entirely on federal law for leave protections, with only a handful of state-specific obligations.

No state paid sick leave

Texas has no statewide law requiring private employers to provide paid sick leave. Austin, Dallas, and San Antonio each passed local paid sick leave ordinances in the 2018–2019 period, but all three have been blocked by court challenges and are not currently enforceable. As of May 2026, no local paid sick leave ordinance is in legal effect in Texas.

Texas Insurance Code Chapter 1255, enacted in 2023, authorizes private insurance carriers to offer voluntary group paid family leave insurance to Texas employers on an opt-in basis. Employer participation is entirely optional; the state does not fund or administer the program.

If an employer voluntarily offers paid sick leave, the Texas Payday Law treats written leave policies as enforceable wage agreements. Employers must follow their own written policies consistently — selectively applying a leave policy is a potential discrimination claim and a wage dispute waiting to happen.

FMLA: the primary leave protection for Texas employees

The federal Family and Medical Leave Act is the most significant leave protection available to Texas private-sector employees. FMLA applies to private employers with 50 or more employees in 20 or more workweeks, and to all public agencies and public schools regardless of size.

Eligible employees (12 months of service, 1,250 hours in the preceding 12 months, working within 75 miles of an employer location with 50 or more employees) may take up to 12 workweeks of unpaid, job-protected leave per year for:

The employee's own serious health condition
Caring for a spouse, child, or parent with a serious health condition
Birth, adoption, or foster placement of a child (bonding leave within the first 12 months)
Qualifying military exigencies related to a family member's active duty
Military caregiver leave (up to 26 weeks for a servicemember or covered veteran with a serious injury or illness)

FMLA leave is unpaid and job-protected. Employers must maintain group health benefits during the leave on the same terms as if the employee had not taken leave. Medical leave of absence under FMLA requires four mandatory notices from the employer: general notice (via poster), eligibility notice, rights and responsibilities notice, and designation notice. Missing any of these can constitute FMLA interference.

Texas has no state family and medical leave law with a lower employer-size threshold. Employees at companies with fewer than 50 workers in Texas have no federal or state family leave entitlement beyond what federal law and the employer's own voluntary policies provide.

Jury duty leave

Texas Labor Code § 122.001 prohibits employers from discharging or penalizing an employee for serving on a jury. Employers are not required to pay employees during jury duty absence — but they cannot threaten, retaliate against, or terminate an employee for responding to a jury summons. Exempt salaried employees must receive their full salary for any workweek in which they perform any work, even if they miss days for jury service, to preserve the salary basis test.

Voting leave

Texas Election Code § 276.004 requires employers to allow employees to take paid time off to vote in any election — unless the employee has a consecutive two-hour period available outside of working hours while polls are open. Employers may designate which two-hour window the employee uses (beginning or end of shift). Refusing to allow voting leave or retaliating against an employee for taking it is a Class C misdemeanor.

Military leave

Federal USERRA protections apply to all Texas employers regardless of size, requiring reemployment rights after military service of up to five years, protection of benefits accrued during service, and prohibition of discrimination based on military service or obligations. Texas also has state military leave protections under Texas Government Code Chapter 431 for state employees on military duty.

Bereavement leave

Texas has no law requiring private employers to provide paid or unpaid bereavement leave. Bereavement leave is entirely voluntary in Texas — if an employer offers it, the terms are set by the employer's own written policy. Whatever that policy says, the Texas Payday Law makes it an enforceable wage obligation if it promises pay. Employers who offer bereavement should document the policy in writing, apply it consistently across similarly situated employees, and specify which family relationships qualify and how many days are provided — inconsistent application is a discrimination claim waiting to happen.

Domestic violence leave

Texas Labor Code § 52.051 protects employees who are crime victims — including victims of domestic violence — from retaliation for attending court proceedings related to a crime in which the employee was a victim, provided the employee gives reasonable notice. This is a narrow protection tied to court attendance, not a general domestic violence leave entitlement like California's. Employers may not discharge or discipline employees for exercising this right.

Texas Labor Code § 52.051 prohibits employers from taking adverse action against employees who are crime victims and are subpoenaed or required to appear in criminal proceedings. Employers may not discharge or discipline an employee for attending court proceedings related to a crime in which the employee was a victim, provided the employee gives reasonable notice.

Pregnant Workers Fairness Act: Federal Requirements Apply to Texas Employers

The federal Pregnant Workers Fairness Act (PWFA), effective June 27, 2023, with EEOC final regulations effective June 18, 2024, requires employers with 15 or more employees to provide reasonable accommodations for known limitations related to pregnancy, childbirth, or related medical conditions. This applies to Texas employers with 15 or more employees just as it applies everywhere else in the country.

The PWFA is broader than both Title VII and the ADA for pregnancy-related conditions:

Covered limitations include morning sickness, fatigue, migraines, lactation, miscarriage, postpartum depression, and any other condition related to pregnancy — even minor or episodic ones that wouldn't qualify as ADA disabilities
Leave is a last resort, not a default — employers must first explore non-leave accommodations
The interactive process must move quickly given the time-sensitive nature of pregnancy
Documentation requests are limited — employers generally cannot ask for documentation for obvious conditions or for four specific accommodations: additional restroom breaks, food and drink breaks, access to beverages, and the ability to sit or stand as needed

For a deeper overview of obligations around pregnancy discrimination and accommodation, understanding and preventing pregnancy discrimination covers the framework from both Title VII and PWFA angles.

Texas Workers' Compensation: The Optional System

Texas is the only state in the country where private-sector workers' compensation is not mandatory. Private employers in Texas may choose to be a "subscriber" (carrying workers' comp coverage) or a "non-subscriber" (opting out). The choice carries significant legal consequences in both directions.

Subscribers: what workers' comp covers

Employers who carry Texas workers' compensation insurance — administered through the Texas Department of Insurance Division of Workers' Compensation (DWC) — provide covered employees with:

Medical care for work-related injuries and illnesses
Income benefits: generally 70% of average weekly wage (maximum weekly benefit approximately $1,231 for 2025)
Impairment income benefits based on the degree of permanent impairment
Supplemental income benefits if the employee cannot return to work at the prior wage
Lifetime income benefits for the most severe permanent injuries
Death benefits for families of employees killed on the job

Subscribers receive near-complete immunity from employee lawsuits for workplace injuries — the workers' comp system is the exclusive remedy. Employers must report work-related injuries to their insurance carrier and the DWC within 8 days.

Non-subscribers: the legal exposure

Employers who opt out of the workers' comp system lose two critical defenses in personal injury litigation: they cannot assert that the employee assumed the risk of injury, that the injury was caused by a fellow employee's negligence, or that the employee was contributorily negligent. Non-subscribers can be sued in civil court for workplace injuries with far fewer defenses available than in other states.

Non-subscribers must:

File an annual Notice of Non-Coverage (Form DWC-005) with the Division of Workers' Compensation
Post Notice 6 in English and Spanish (and any other appropriate language) informing employees that the employer does not carry workers' comp coverage
Provide injured employees with information about their right to sue

Many large Texas employers in industries like oil and gas and construction have adopted non-subscriber programs — but those programs typically involve comprehensive occupational accident insurance and aggressive return-to-work programs to manage the litigation exposure.

Workplace Safety in Texas: Federal OSHA

Texas does not operate a state OSHA plan. Federal OSHA covers all private-sector employers in Texas directly. State and local government employees in Texas are covered by separate state health and safety requirements.

Core OSHA obligations for Texas employers

General Duty Clause: employers must provide a workplace free from recognized hazards likely to cause death or serious physical harm
Industry-specific standards: general industry (29 CFR Part 1910), construction (29 CFR Part 1926), and agriculture standards apply depending on employer operations
Hazard communication: the "right-to-know" standard requires Safety Data Sheets and employee training for hazardous chemicals
Required poster: the federal OSHA Job Safety and Health poster must be displayed where employees can see it

OSHA injury recordkeeping

Workplace fatality: report to OSHA within 8 hours
Inpatient hospitalizations, amputations, or loss of an eye: report within 24 hours
OSHA Form 300: annual injury and illness log, maintained year-round
OSHA Form 300A: annual summary, posted February 1 through April 30 each year
OSHA Form 301: incident report completed within 7 calendar days of each recordable injury

Employers with 10 or fewer employees in most industries are partially exempt from the recordkeeping requirements, though reporting obligations for fatalities and severe injuries still apply. See the AllVoices blog for practical guidance on avoiding the most common OSHA violations.

OSHA anti-retaliation protections

Section 11(c) of the OSH Act prohibits retaliation against employees who report safety concerns, file OSHA complaints, or participate in inspections. Retaliation complaints must be filed with OSHA within 30 days of the adverse action. Given the tight filing window, employees often move quickly — Texas employers need documented, non-retaliatory reasons for any adverse action taken after an OSHA-protected report.

Independent Contractor Classification in Texas

Texas does not use the strict ABC test that California employs. Worker classification in Texas is governed by a multi-factor economic realities test under the FLSA for federal wage purposes and a 20-factor common-law test used by the Texas Workforce Commission for unemployment insurance purposes.

The FLSA six-factor economic realities test

The DOL's current rule (effective March 11, 2024) applies a six-factor economic realities test to determine whether a worker is an employee or an independent contractor under the FLSA:

Opportunity for profit or loss based on managerial skill
Investments by the worker and the potential employer
Degree of permanence of the work relationship
Nature and degree of control
Extent to which the work is integral to the employer's business
Skill and initiative

No single factor is determinative. The Trump DOL has signaled it may return to the more employer-friendly 2021 two-factor framework; no formal rulemaking had been finalized as of May 2026.

TWC's 20-factor test

The Texas Workforce Commission applies a 20-factor test when determining worker classification for unemployment insurance purposes. Key factors include whether the employer controls how the work is done, whether the worker can profit or lose money based on their own decisions, whether the worker provides their own tools, and whether the relationship is permanent or project-based. The TWC test generally produces outcomes similar to the FLSA test, though the specific analysis differs.

Misclassification consequences in Texas

Misclassifying an employee as an independent contractor in Texas creates exposure to unpaid FLSA overtime, unpaid employer-side payroll taxes (Social Security, Medicare, FUTA), unpaid unemployment insurance contributions, and FLSA recordkeeping violations. The IRS's Section 530 safe harbor offers some protection against retroactive reclassification when an employer had a reasonable basis for the classification and consistently treated similarly situated workers as contractors.

Non-Compete Agreements in Texas

Texas enforces non-compete agreements — but only if they meet the requirements of the Texas Covenants Not to Compete Act (Texas Business and Commerce Code § 15.50). Texas courts actively police non-competes for reasonableness and will reform overly broad agreements rather than voiding them outright.

Requirements for an enforceable Texas non-compete

Under Texas Business and Commerce Code § 15.50, a non-compete agreement in Texas must:

Be ancillary to or part of an otherwise enforceable agreement: the agreement must be supported by consideration beyond employment itself — typically confidential information, trade secrets, specialized training, or similar value exchanged at or after the time of execution
Contain reasonable limitations: the geographic scope, duration, and activity restrictions must be reasonable and not greater than necessary to protect the employer's legitimate business interests

Texas courts have enforced non-competes of 2 years and reasonable geographic scope when the employer provides access to genuinely confidential information or specialized training. Courts routinely reform overly broad agreements rather than voiding them — which means an employer cannot rely on overbreadth to escape a reformed, narrower restriction.

The FTC non-compete situation

The FTC's 2024 rule to ban most non-competes was struck down by a federal court — in the Eastern District of Texas. The FTC withdrew its appeal in September 2025. The nationwide ban is dead; Texas non-competes remain governed by state law. The FTC continues to pursue targeted case-by-case enforcement against agreements it views as anticompetitive, particularly overly broad restrictions on hourly workers. Non-competes for executives and employees with access to genuine trade secrets remain broadly enforceable in Texas.

Pay Transparency and Equal Pay in Texas

Texas has no statewide pay transparency law requiring employers to post salary ranges in job postings. There is no Texas equivalent to California's SB 1162 or New York's Labor Law Section 194-B. Employers in Texas are free to advertise positions without disclosing compensation ranges.

That said, two important federal rules still apply to every Texas employer:

Equal Pay Act: the federal EPA prohibits sex-based pay differentials for employees performing substantially equal work. Pay differences must be justified by seniority, merit, production systems, or a bona fide factor other than sex. The Lilly Ledbetter Fair Pay Act resets the statute of limitations with each discriminatory paycheck.
NLRA protection for wage discussions: the National Labor Relations Act protects employees' rights to discuss wages, hours, and working conditions with coworkers. Employer policies that prohibit wage discussions are generally unlawful under the NLRA — even in non-union workplaces. A handbook rule saying "don't discuss your pay with colleagues" is an NLRA violation.

Texas employers considering whether to voluntarily post salary ranges should note that transparency is increasingly an expectation for candidates competing in markets with employees from pay-range states. Many multi-state employers default to including ranges in all postings to streamline compliance across their workforce.

Off-Duty Conduct, Cannabis, and Employee Privacy in Texas

Texas has no law protecting employees' off-duty cannabis use. Unlike New York, California, and many other states, Texas has not legalized recreational marijuana and has not passed any statute prohibiting employers from taking adverse action based on off-work cannabis use or positive drug test results.

Drug testing in Texas

Texas employers may conduct pre-employment, random, reasonable suspicion, and post-incident drug testing without restriction under state law. Texas has no state drug testing statute for private employers — testing policy is governed by the employer's own written program and, for certain industries, federal DOT or other regulatory requirements. Employers should have a written drug and alcohol policy that is distributed to all employees and consistently applied.

The Texas Compassionate Use Program (CUP) does provide limited legal access to low-THC cannabis for patients with certain qualifying medical conditions. Whether this creates any obligation not to discriminate against CUP patients in employment is an unsettled legal question in Texas as of 2026. Employers in highly safety-sensitive roles should consult counsel before making employment decisions based solely on a positive drug test for a CUP patient.

Social media and off-duty conduct

Texas has no statute specifically protecting employees' social media activity or off-duty lawful conduct. Employers may generally monitor company-issued devices and employer-provided systems. Monitoring of personal devices or personal social media accounts raises separate legal concerns under federal wiretapping statutes and the Stored Communications Act. Employers should have a clearly written technology acceptable use policy and limit monitoring to company systems.

Electronic monitoring

Unlike New York (which requires a written monitoring notice to employees) or Connecticut, Texas has no state law requiring employers to notify employees of electronic monitoring. Federal wiretapping law and the Electronic Communications Privacy Act apply. Employer monitoring of company email, company devices, and company systems is generally lawful with a clearly communicated policy. Monitoring of personal communications — even on company networks — requires careful policy design and counsel review.

Workplace Violence: Federal OSHA and Texas

Texas has no state workplace violence prevention statute equivalent to California's SB 553. Federal OSHA's General Duty Clause — which requires every employer to provide a workplace free from recognized hazards likely to cause death or serious physical harm — is the primary legal framework for workplace violence prevention in Texas.

OSHA has identified workplace violence as a recognized hazard in several industries, including healthcare, retail, and any industry where employees handle money, work alone at night, or interact with members of the public in high-stress situations. Employers in these industries who fail to take reasonable steps to address known violence risks can be cited under the General Duty Clause.

Practical steps Texas employers should take regardless of the absence of a specific state statute:

Conduct a written workplace violence risk assessment for each worksite
Establish a clear policy prohibiting threats and violence and communicate it to all employees
Create a documented reporting procedure for threats and incidents
Train supervisors on how to recognize warning signs and how to respond
Maintain a log of incidents and near-misses
Use a dedicated workplace violence reporting channel so employees can report concerns safely without fear of retaliation

Employers in healthcare settings should note that federal OSHA issued a healthcare workplace violence prevention standard in 2024 that applies to covered healthcare facilities regardless of state. Texas healthcare employers should confirm compliance with that federal standard separately.

Texas Unemployment Insurance

Texas unemployment insurance is administered by the Texas Workforce Commission under Texas Labor Code Title 4. Employers are required to register with the TWC, file quarterly wage reports, and pay unemployment taxes on covered wages.

Taxable wage base: first $9,000 per employee per year
New employer rate: 2.7%
Experienced employer rate: 0.23% to 6.23% based on benefit charge history
Recordkeeping: maintain payroll records for at least 4 years
Response deadline: employers must respond to TWC unemployment claims within 14 days

Failure to respond to TWC claims promptly — or responding without adequate documentation — routinely results in benefits being awarded even when a termination was for cause. Every Texas employer should have a documented termination checklist and a process for responding to TWC claims with supporting records.

Hiring Compliance in Texas

No statewide ban-the-box law

Texas has no statewide ban-the-box law restricting when employers can ask about criminal history. Private employers in Texas may ask about criminal history on job applications. The federal EEOC guidance on criminal history under Title VII still applies: blanket exclusions based on arrest records or criminal history without an individualized assessment can constitute disparate impact discrimination. Some Texas cities (Austin, Dallas) have local ordinances affecting public-sector hiring that do not apply to private employers.

No salary history ban

Texas has no law prohibiting employers from asking applicants about prior salary history. Employers may ask and may consider prior compensation in setting pay — subject to the Equal Pay Act's prohibition on sex-based pay differentials and the EEOC's caution that relying solely on prior salary can perpetuate historical pay discrimination.

Background checks: FCRA compliance

When Texas employers use a consumer reporting agency (CRA) to conduct background checks, the federal Fair Credit Reporting Act (FCRA) applies. Required steps include a standalone written disclosure and authorization before the check is run, pre-adverse action notice with a copy of the report before taking adverse action, a response period for the candidate, and a final adverse action notice. For social media background screening, employers should not require applicants to provide login credentials or access to private accounts.

I-9 employment eligibility verification

All Texas employers must complete Form I-9 for every employee hired after November 6, 1986. I-9 forms must be retained for the longer of 3 years from the hire date or 1 year after the date employment ends. Remote verification using authorized alternative procedures is available for employers who use E-Verify. Discrimination based on citizenship status or national origin in the I-9 process is prohibited under IRCA.

New hire reporting

Texas employers must report every new hire and rehire to the Office of the Attorney General within 20 days of the employee's first day of work. Reports must include the employee's name, address, Social Security number, and date of hire, plus the employer's name, address, and federal employer identification number.

Federal Warn Act: Mass Layoff Notice Requirements

The federal WARN Act applies to Texas employers with 100 or more employees. It requires 60 days advance written notice before a plant closing affecting 50 or more workers or a mass layoff affecting 500 or more workers (or 50–499 if they represent at least one-third of the workforce at a single site).

Texas has no state WARN equivalent. WARN notices must be sent to affected workers (or their union representatives), the Texas Workforce Commission, and the chief elected official of each affected city and county. Failure to provide required notice creates liability for up to 60 days of back pay and benefits per affected employee, plus civil penalties of up to $500 per day for failure to notify local government officials.

Recordkeeping Requirements for Texas Employers

FLSA payroll records: at least 3 years; supplementary records (time cards, work schedules) at least 2 years
TCHRA / EEOC personnel records: at least 1 year from the date of the action; 1 year from the date of involuntary termination for terminated employee records
FMLA records: at least 3 years
OSHA Form 300 logs: 5 years
I-9 forms: longer of 3 years from hire or 1 year after termination
Texas unemployment insurance records: at least 4 years
Workers' comp records: 1 year from the date of injury for initial notification records; DWC requires carrier maintenance of claim records per their rules

Maintaining accurate, organized payroll records and personnel files is foundational to defending against TWC wage claims, EEOC charges, and private litigation in Texas.

Texas State Agencies and Where to File

Texas Workforce Commission (TWC) — Wage and Hour Program: Texas Payday Law wage claims; 180-day filing deadline
TWC Civil Rights Division: TCHRA discrimination and harassment charges; 180-day deadline (300 days for sexual harassment); cross-files with EEOC
Texas Department of Insurance — Division of Workers' Compensation (DWC): workers' comp claims, non-subscriber filings, injury reporting
EEOC (federal): Title VII, ADA, ADEA, GINA, PWFA charges; 300-day deadline in Texas; cross-files with TWC in most cases
U.S. DOL Wage and Hour Division: FLSA violations, FMLA complaints
Federal OSHA (Region 6, Dallas): workplace safety complaints, whistleblower retaliation complaints; 30-day filing deadline for retaliation claims
NLRB (Region 16, Fort Worth): National Labor Relations Act unfair labor practice charges

How AllVoices Helps Texas Employers

Texas's employer-friendly reputation doesn't mean low stakes. The TWC's 180-day wage claim window is fast. The TCHRA's mandatory administrative exhaustion means every discrimination complaint generates a paper trail that starts immediately. And the "immediate and appropriate corrective action" standard for sexual harassment under SB 45 requires HR teams to move faster and document better than they may have in the past.

AllVoices is built for exactly this compliance environment — where the documentation you create today is the defense you rely on in six months when a TWC charge arrives.

Anonymous reporting: AllVoices' anonymous reporting tool gives employees a safe way to raise harassment and discrimination concerns before they become TCHRA charges. Early reporting means earlier investigation and faster corrective action — which is exactly what Texas SB 45 demands.
Structured investigations: the workplace investigations workflow tracks every step of an HR investigation — complaint intake, interviews, evidence, findings, corrective action — in a timestamped, auditable file. For a complete investigation framework, the Definitive Guide to Conducting Workplace Investigations covers scoping, interviews, evidence handling, and report writing.
HR case management: the HR case management platform captures employee reports across all channels and creates an auditable record from the first report through resolution.
Vera AI co-pilot: AllVoices' AI co-pilot for employee relations drafts case summaries, suggests next steps, and surfaces patterns across cases — without sending data to public LLMs.
Integrations: AllVoices integrates with Workday, Rippling, Paylocity, and other HRIS platforms to keep case data and employee records in sync.

For teams building out an employee relations function in Texas, the Handbook for New Employee Relations Managers and the Essential Guide to Managing Employee Relations Issues are practical starting points.

Frequently Asked Questions: Texas Labor Laws in 2026

What is the minimum wage in Texas in 2026?

The minimum wage in Texas is $7.25 per hour, equal to the federal minimum wage. Texas adopts the federal rate by statute under Texas Labor Code § 62.051 and preempts cities and counties from setting higher local rates. The rate has been unchanged since July 24, 2009. Tipped employees may be paid a cash wage of $2.13 per hour, provided tips bring total compensation to at least $7.25 per hour.

Does Texas require meal breaks or rest periods?

No. Texas law does not require employers to provide meal breaks or rest periods to adult employees. When employers do provide breaks voluntarily, federal FLSA rules apply: short breaks of 5–20 minutes are generally paid work time; bona fide meal periods of 30 minutes or more where the employee is fully relieved of duties are unpaid.

When is the final paycheck due in Texas?

For involuntary terminations — discharge, layoff, or any other employer-initiated separation — the final paycheck is due within 6 calendar days of the discharge date, under Texas Labor Code § 61.014. For voluntary resignations, the final paycheck is due on the next regularly scheduled payday after the employee's last day. Employers may not withhold a final paycheck because an employee has not returned company property.

Does Texas require paid sick leave?

No. Texas has no statewide paid sick leave law for private employers. Local ordinances in Austin, Dallas, and San Antonio were passed but have been blocked by court challenges and are not currently enforceable. Employers who voluntarily offer paid sick leave must follow their own written policies consistently under the Texas Payday Law.

Is workers' compensation required in Texas?

Workers' compensation is optional for private employers in Texas — the state is the only one in the country with this approach. Employers who opt out ("non-subscribers") lose important legal defenses and can be sued directly by injured employees in civil court. Non-subscribers must file annual Form DWC-005 with the DWC and post required notices in the workplace.

How long does an employee have to file a discrimination claim in Texas?

For most TCHRA discrimination claims — race, national origin, disability, age, religion — the filing deadline with the TWC Civil Rights Division is 180 days from the date of the alleged discriminatory act. For sexual harassment claims, the deadline was extended to 300 days by Texas HB 21 (effective September 1, 2021). Federal EEOC claims carry a 300-day deadline in Texas because the TWC is a designated fair employment practices agency.

Are non-compete agreements enforceable in Texas?

Yes, Texas enforces non-compete agreements that meet the requirements of Texas Business and Commerce Code § 15.50 — they must be ancillary to an otherwise enforceable agreement, supported by consideration (such as access to confidential information), and contain reasonable limitations on geography, duration, and scope. Texas courts reform overly broad agreements rather than voiding them outright. The FTC's nationwide non-compete ban never took effect and was formally abandoned in 2025; Texas non-competes remain governed by state law.

Does Texas have a ban-the-box law?

No statewide ban-the-box law applies to private employers in Texas. Private employers may ask about criminal history at any point in the hiring process. Federal EEOC guidance still applies: blanket exclusions based on arrest records or criminal history without individualized assessment can constitute unlawful disparate impact discrimination under Title VII.

The Bottom Line on Texas Labor Laws in 2026

Texas genuinely is one of the most employer-friendly states in the country — no state income tax, a $7.25 minimum wage, no mandatory paid leave, no daily overtime, no local wage patchwork. But "employer-friendly" is not the same as "low risk." The federal overlay is comprehensive, the TCHRA's harassment protections apply to every employer regardless of size for sexual harassment claims, and the TWC's 180-day wage claim window moves faster than most HR teams expect.

The 2026 priorities for Texas HR teams:

Now: audit exempt employee classifications against the $684/week FLSA threshold with documented duties-test support for every exemption
Now: confirm PWFA accommodation procedures are in place and supervisors know how to handle pregnancy-related accommodation requests
Now: review workers' comp status — subscriber or non-subscriber — and confirm required notices are posted and DWC filings are current
Ongoing: respond to TWC unemployment claims within 14 days with supporting documentation — every time
Ongoing: document the basis for every adverse employment action before it is taken, not after
Ongoing: investigate every harassment complaint promptly and take "immediate and appropriate corrective action" under Texas SB 45's heightened standard
Ongoing: maintain FLSA payroll records for at least 3 years and OSHA injury logs for 5 years

The documentation that protects a Texas employer in a TWC wage claim, TCHRA charge, or OSHA inspection is built one case at a time — in a system that timestamps entries and preserves the record. See how AllVoices' HR case management platform handles complaint intake, investigations, and recordkeeping for Texas HR teams.

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