Texas HR Compliance for Startups

By TalentForge360 LLC | 100% US-Based

Quick answer: What startups need to know about Texas employment law. Final pay, minimum wage, workers comp, and more for Texas employers.

At-Will Employment

Texas is a strong at-will employment state. Either party may terminate the employment relationship at any time for any lawful reason. Texas does not require advance notice of termination unless otherwise contractually agreed.

Texas Payday Law and Final Pay

The Texas Payday Law governs final pay. Involuntarily terminated employees must receive final pay within 6 calendar days of discharge. Employees who resign must receive final pay by the next regularly scheduled payday. Late final pay can result in penalties administered by the Texas Workforce Commission (TWC).

Workers Compensation

Texas is the only state where workers compensation insurance is not mandatory for most private employers. However, non-subscribing employers who opt out face greater exposure to personal injury lawsuits (cannot claim common law defenses). Most startups should still carry workers comp - discuss with your insurance broker.

Minimum Wage

Texas follows the federal minimum wage of $7.25/hour. Texas does not have a state minimum wage higher than the federal rate. No statewide paid sick leave law exists, though some cities (Austin, San Antonio, Dallas) have attempted to pass local ordinances.

Texas Commission on Human Rights Act (TCHRA)

The TCHRA prohibits employment discrimination based on race, color, national origin, sex, religion, age (40+), disability, pregnancy, and genetic information. It mirrors many federal protections and applies to employers with 15+ employees.

Unemployment Insurance (TWC)

Texas employers must register with the Texas Workforce Commission for unemployment insurance. The TWC administers state unemployment claims and can audit employer wage records. Register before making your first hire.

Required Workplace Postings

Texas requires federal workplace posters plus Texas-specific posters including the Texas Payday Law notice, TCHRA EEO notice, and workers compensation coverage or non-coverage notice. Download current posters from the TWC and TWC websites.