Texas Employment Law Guide for Employers
Texas employers must account for state wage-payment rules, non-compete requirements, and the option for private employers to elect not to subscribe to workers' compensation.
Texas employers should account for the Texas Payday Law, the choice whether to subscribe to workers' compensation, and the Texas Covenants Not to Compete Act, alongside applicable federal employment requirements.
General information only; not a complete legal review. Federal references below were checked against linked primary sources on September 28, 2026. State and local summaries are selected examples and have not received a comprehensive jurisdiction-by-jurisdiction attorney review. Laws, coverage tests, and exceptions change; confirm current requirements with the responsible agency and qualified employment counsel. TalentForge360 is not a law firm. No compliance or hiring outcome is guaranteed.
Selected federal employer-size thresholds
Counting methods, worksite rules, exclusions, aggregation, and employee eligibility differ by law. These are general coverage rules, not a determination for a specific employer.
- 15+ employees: Title VII and ADA employer coverage generally begins at 15. Title VII · ADA
- 20+ employees: ADEA coverage generally begins at 20. Federal COBRA generally applies to group health plans sponsored by employers with 20 or more employees in the prior year, subject to scope and exceptions. ADEA · DOL COBRA guidance
- 50+ employees: Private-employer FMLA coverage generally requires 50 or more employees on the payroll for 20 or more workweeks in the current or preceding calendar year; employee eligibility has separate tests. DOL FMLA Employer Guide
- 50+ full-time employees and equivalents: ACA applicable-large-employer status generally uses a prior-year average, not a point-in-time headcount. IRS employer guidance
Key Texas Employment Laws
At-Will Employment in Texas
Texas is a strong at-will employment state. Courts apply the doctrine consistently. At-will does not mean unlimited: terminations that violate anti-discrimination laws, FLSA retaliation, or public policy remain actionable. Include a clear at-will acknowledgment in every offer letter and handbook.
Texas Payday Law
Most nonexempt employees must be paid at least twice monthly; exempt and certain commission-based employees may follow monthly schedules allowed by law. After involuntary separation, final wages are due within six calendar days; after resignation or retirement, they are generally due by the next regular payday. Unauthorized deductions beyond standard withholding require specific written authorization.
Workers' Compensation in Texas
Private employers in Texas may elect not to subscribe to workers' compensation coverage, subject to notice and other statutory requirements. Non-subscribers face different civil-liability rules and may lose traditional defenses.
Non-Compete Agreements in Texas
Texas allows non-compete agreements under the Texas Covenants Not to Compete Act if they are ancillary to an enforceable agreement, supported by adequate consideration, and contain reasonable limitations on time, geography, and scope. Courts may blue-pencil overly broad agreements.
Texas Commission on Human Rights Act (TCHRA)
The TCHRA provides state anti-discrimination protections and is administered by the Texas Workforce Commission Civil Rights Division. Coverage and filing procedures depend on the claim and applicable statutory requirements; verify current TWC and EEOC instructions before relying on a filing deadline or cross-filing assumption.
Selected Texas Requirements by Headcount
Selected state requirements and examples only. This is not an exhaustive compliance checklist. Confirm each rule, coverage test, and local ordinance using current primary sources before relying on it.
1+ Employees: employees
- At-will employment applies
- Federal minimum wage and overtime (FLSA)
- New hire reporting required (20 days)
- Employers must display required workplace posters
1+ Employees: private employers (coverage choice)
- Private employers may elect not to subscribe to workers' compensation, subject to notice and other statutory requirements; agricultural and other industry-specific rules require separate review
- Non-subscribers face different civil-liability rules and reporting obligations
15+ Employees: employees
- Title VII and ADA federal coverage generally begins at 15 employees
- TCHRA protections apply subject to claim-specific coverage and exceptions
20+ Employees: employees
- ADEA applies federally at 20 employees
50+ Employees: employees
- Federal FMLA applies (12 weeks unpaid protected leave)
- ACA employer mandate: offer qualifying health coverage
- EEO-1 reporting to EEOC if federal contractor
Texas Quick Facts for Employers
- Minimum Wage: $7.25/hour (mirrors federal rate); no local minimum wage ordinances permitted
- At-Will Employment: Yes
- Paid Leave Law: No statewide paid leave mandate; federal FMLA at 50 employees
- Non-Compete: Enforceable under the Texas Covenants Not to Compete Act with reasonable time/geography limits
- Workers' Comp: Not required; opt-out available but civil exposure is substantial for non-subscribers
Common Questions About Texas Employment Law
Is workers' compensation required for Texas employers?
Private employers in Texas may elect not to subscribe to workers' compensation coverage, subject to notice and other statutory requirements. Non-subscribers face different civil-liability rules and may lose traditional defenses.
Are non-compete agreements enforceable in Texas?
Yes, with restrictions. Texas allows non-compete agreements under the Texas Covenants Not to Compete Act if they are ancillary to an otherwise enforceable agreement, supported by adequate consideration, and contain reasonable limitations on time, geographic scope, and the scope of restrained activity.
What does the Texas Payday Law require?
Most nonexempt employees must be paid at least twice monthly; exempt employees may generally be paid monthly. Final wages are due within six calendar days after an involuntary separation, while employees who resign or retire are generally paid on the next regularly scheduled payday.
Is Texas an at-will state?
Yes. Texas strongly recognizes at-will employment. Either party may end the employment relationship at any time for any lawful reason. Document business reasons for all separations to defend against discrimination and retaliation claims.
Does Texas have a state minimum wage above the federal rate?
No. Texas's minimum wage mirrors the federal rate of $7.25 per hour. There is no statewide minimum above the federal floor, and Texas preempts local minimum wage ordinances.
Need HR support in Texas?
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