What labor laws apply when hiring employees?

Labor Laws When Hiring Employees in Texas

When hiring employees in Texas, businesses must comply with both federal and state labor laws that govern employment practices. Understanding these laws helps ensure proper hiring, payroll, and workforce management.

Key Labor Laws Affecting Hiring in Texas

• Federal Employment Laws: Texas employers must follow federal regulations such as the Fair Labor Standards Act (FLSA) for minimum wage and overtime, the Equal Employment Opportunity (EEO) laws prohibiting discrimination, and the Immigration Reform and Control Act (IRCA) requiring verification of employee work eligibility via Form I-9.
• Texas Payday Law: This law mandates timely payment of wages. Employers must establish regular paydays and provide employees with wage statements detailing hours worked and deductions.
• At-Will Employment: Texas is an at-will employment state, meaning employers or employees can terminate employment at any time without cause, as long as it does not violate discrimination or contract laws.
• Employee Classification: Properly classify workers as employees or independent contractors to comply with tax withholding, unemployment insurance, and workers’ compensation requirements.
• Workplace Safety and Insurance: Although Texas does not require workers’ compensation insurance, employers who opt in must comply with Texas Department of Insurance rules. OSHA standards also apply for workplace safety.

Operational Steps for Compliance

• Register Your Business: Ensure your business is registered with the Texas Workforce Commission (TWC) if you plan to hire employees.
• Complete Form I-9 and E-Verify: Verify employee eligibility to work in the U.S. using Form I-9 and consider enrolling in E-Verify for additional compliance.
• Set Up Payroll Systems: Establish payroll processes that comply with minimum wage, overtime rules, and timely wage payments under Texas Payday Law.
• Maintain Records: Keep accurate records of hours worked, wages paid, and employee classifications for at least three years as required by federal and state laws.
• Implement Employee Policies: Develop clear policies on hiring, workplace conduct, and termination consistent with at-will employment and anti-discrimination laws.

As of 2026, regularly review updates from the Texas Workforce Commission and federal agencies to stay current with labor law changes impacting your hiring practices.