Texas labor laws establish the rights and responsibilities of both employers and employees throughout the state. As one of the largest employment markets in the United States, Texas has developed a comprehensive legal framework that governs workplace relationships, wage and hour standards, workplace safety, and employee protections. Understanding these laws is essential for both business owners seeking compliance and employees protecting their rights.
The Texas labor landscape is shaped by both state-specific legislation and federal employment laws that apply nationwide. Texas employers must navigate requirements from the Texas Labor Code, the Fair Labor Standards Act (FLSA), the Civil Rights Act, and numerous other federal and state statutes. This guide provides expert insights into the major areas of Texas labor law, helping you understand your obligations and rights in the workplace.
Wage and Hour Requirements Under Texas Law
Texas follows federal minimum wage standards established by the Fair Labor Standards Act. As of 2024, the federal minimum wage is $7.25 per hour, which applies throughout Texas. However, some Texas cities and counties have adopted higher minimum wages for contractors and employees on public projects. Employers must comply with whichever wage standard is higher—the federal minimum or any applicable local requirement.
Overtime compensation is another critical component of wage and hour law in Texas. Under the FLSA, employers must pay non-exempt employees time-and-a-half (1.5 times their regular rate) for all hours worked beyond 40 hours per week. Texas does not provide additional overtime protections beyond federal requirements, meaning that employers need only comply with federal standards unless a local ordinance specifies otherwise.
The Texas Labor Code requires employers to maintain accurate wage and hour records for at least two years. These records must document hours worked, wages paid, deductions made, and other information necessary to verify compliance with wage laws. Employers must also provide itemized wage statements showing gross wages, deductions, and net pay. Violations of wage and hour laws can result in significant liability, including back pay, liquidated damages, and attorney’s fees.
Independent contractors are exempt from many wage and hour protections. Properly classifying workers as employees versus contractors is crucial. The IRS and Texas Workforce Commission use a multi-factor test to determine worker status, examining factors such as control over work, investment in equipment, and the permanence of the relationship. Misclassification can expose employers to substantial penalties and back wages liability.
At-Will Employment in Texas
Texas is an at-will employment state, meaning employers can terminate employees for any reason or no reason at all, provided the reason is not illegal. Similarly, employees can resign at any time without cause. This doctrine is the default employment relationship in Texas unless a written contract specifies otherwise.
However, at-will employment has important exceptions. Employers cannot terminate employees for illegal reasons, including retaliation for protected activities. For example, an employee cannot be fired for reporting safety violations, serving on jury duty, voting, or filing workers’ compensation claims. Additionally, terminations cannot violate public policy, such as firing an employee for refusing to commit a crime or for exercising statutory rights.
Employees who believe they were wrongfully terminated may pursue claims based on breach of contract, tortious discharge, or retaliation. If you believe you’ve been terminated unlawfully, understanding your rights and the applicable legal theories is essential. Consider learning about how to appeal a court decision if you need to challenge an adverse ruling in your employment case.
The Texas Supreme Court has recognized limited exceptions to at-will employment, including claims for retaliatory discharge. These exceptions are narrowly construed, meaning courts require substantial evidence that the termination violated clear public policy or an established statutory right.
Workplace Safety and OSHA Compliance
The Occupational Safety and Health Administration (OSHA) enforces federal workplace safety standards that apply throughout Texas. OSHA requires employers to maintain safe working conditions, provide necessary safety equipment, and train employees on hazard recognition and prevention. Texas does not have a state OSHA program; instead, federal OSHA directly enforces workplace safety requirements.
Employers must comply with OSHA standards specific to their industry. For example, construction employers must meet fall protection standards, healthcare facilities must follow bloodborne pathogen protocols, and manufacturing plants must maintain machine guarding systems. Violations can result in substantial civil penalties, with fines reaching thousands of dollars per violation.
Employees have the right to report safety violations to OSHA without fear of retaliation. The OSH Act protects employees who engage in protected activities such as reporting hazards, requesting safety inspections, or participating in investigations. Employers who retaliate against employees for safety-related complaints violate federal law and may face additional penalties.
Workers’ compensation insurance is required for most Texas employers with more than three employees. This system provides medical benefits and wage replacement for employees injured during employment, regardless of fault. In exchange, employees generally cannot sue their employers for workplace injuries. However, exceptions exist when employers lack required insurance coverage or engage in gross negligence.
Discrimination and Harassment Protections
Texas and federal law prohibit employment discrimination based on protected characteristics including race, color, religion, sex, national origin, age (40 and older), disability, and genetic information. The Equal Employment Opportunity Commission (EEOC) enforces federal anti-discrimination laws, while the Texas Workforce Commission Civil Rights Division handles state complaints.
Sexual harassment constitutes unlawful discrimination under Title VII of the Civil Rights Act. Employers must maintain workplace policies prohibiting harassment, provide training to prevent harassment, and respond promptly to complaints. Harassment is unwelcome conduct based on protected characteristics that is severe or pervasive enough to create a hostile work environment or result in adverse employment action.
Retaliation against employees for reporting discrimination or harassment is illegal. Employees cannot be terminated, demoted, denied promotion, or subjected to other adverse actions because they complained about discrimination. If you need to document complaints formally, understanding what is a non-disclosure agreement helps clarify confidentiality obligations in settlement discussions.
To pursue an EEOC claim, employees must file a charge of discrimination within 180 days of the discriminatory act. The EEOC investigates the charge and issues a right-to-sue letter, allowing employees to file federal court litigation. Damages in discrimination cases can include back pay, front pay, compensatory damages for emotional distress, and punitive damages in cases involving intentional discrimination.
Family and Medical Leave Rights
The federal Family and Medical Leave Act (FMLA) requires covered employers to provide up to 12 weeks of unpaid, job-protected leave annually for qualifying reasons. Qualifying reasons include the employee’s serious health condition, family member’s serious health condition, birth or adoption of a child, or military caregiver leave.
To be covered by the FMLA, an employer must have 50 or more employees within 75 miles of the worksite. Additionally, the employee must have worked there for at least 12 months and worked at least 1,250 hours in the past 12 months. Covered employers must maintain the employee’s health insurance during leave and restore the employee to the same or an equivalent position upon return.
Texas does not provide additional state-mandated family leave beyond federal FMLA requirements. However, some Texas employers voluntarily provide more generous leave policies. Employees should review their employee handbook or consult with HR to understand their specific leave entitlements.
Employers cannot retaliate against employees for taking FMLA-protected leave. Termination, demotion, or other adverse actions based on FMLA leave constitute unlawful retaliation. If you believe your employer violated your FMLA rights, you can file a complaint with the U.S. Department of Labor or pursue private litigation.
Independent Contractors vs Employees
Properly classifying workers is essential for compliance with wage and hour laws, tax obligations, and workers’ compensation requirements. The distinction between independent contractors and employees has significant legal and financial implications for both parties.
The IRS uses the common law test to determine worker status, examining three categories: behavioral control, financial control, and relationship type. Behavioral control involves whether the company directs how work is performed. Financial control examines investment in equipment, ability to profit or lose, and payment method. Relationship type considers factors like permanence, benefits provision, and whether work is integral to the business.
Texas courts apply similar factors when determining worker status for purposes of state law compliance. A worker who controls the means and methods of work, invests in their own tools and equipment, serves multiple clients, and has the ability to profit or lose money typically qualifies as an independent contractor. Conversely, a worker subject to detailed supervision, using company-provided equipment, working exclusively for one employer, and receiving benefits is likely an employee.
Misclassification carries serious consequences. Employers who improperly classify employees as contractors may owe back wages, overtime compensation, payroll taxes, workers’ compensation premiums, and penalties. The Texas Workforce Commission and IRS actively investigate misclassification cases, particularly in industries known for this practice such as construction, transportation, and healthcare.
Non-Compete Agreements and Restrictive Covenants
Non-compete agreements and other restrictive covenants are common in Texas employment relationships. A non-disclosure agreement protects confidential business information, while non-competes restrict employees from working for competitors after employment ends.
Texas courts enforce non-compete agreements if they are reasonable in scope, duration, and geographic area. A reasonable non-compete typically lasts one to two years and applies only to the geographic area where the employer conducted business. Courts consider the legitimate business interest being protected, such as trade secrets or confidential information, when evaluating reasonableness.
Non-solicitation agreements, which prevent employees from soliciting the employer’s customers or other employees after termination, are generally enforceable if reasonable. Texas courts distinguish between non-solicitation of customers (more likely enforceable) and non-solicitation of employees (more scrutinized for reasonableness).
When employment disputes arise involving restrictive covenants, mediation vs arbitration can provide efficient dispute resolution. Many employment agreements include arbitration clauses requiring parties to resolve disputes through arbitration rather than litigation.
Workplace Privacy and Monitoring
Texas employers generally have broad rights to monitor employees during work hours using company equipment and systems. However, certain privacy protections apply. Employers cannot monitor employee communications without notice in most circumstances, though monitoring for legitimate business purposes (such as quality assurance or security) is typically permissible.
Employees have limited privacy expectations in company email, messaging systems, and computer use. Texas law permits employers to monitor these communications if the employee has notice and consents. However, personal communications on personal devices using personal accounts may receive greater privacy protection.
Wiretapping and electronic surveillance are restricted under federal and Texas law. Employers cannot intercept phone calls or record conversations without consent from at least one party (in Texas, a two-party consent state for certain communications). Violating wiretapping laws can result in criminal penalties and civil liability.
Background checks and drug testing are permissible under Texas law. Employers can conduct pre-employment background checks, drug tests, and credit checks, provided they comply with the Fair Credit Reporting Act and provide required disclosures. Drug testing is particularly common in safety-sensitive positions and among employers with federal contracts.
Resolving Employment Disputes
Employment disputes can arise from wage disputes, discrimination claims, wrongful termination, breach of contract, and numerous other issues. Understanding your options for resolving disputes is critical.
Many employment agreements contain arbitration clauses requiring disputes to be resolved through arbitration rather than court litigation. As discussed in our guide on mediation vs arbitration, these alternative dispute resolution methods offer advantages such as confidentiality, faster resolution, and lower costs compared to litigation.
Administrative remedies often precede litigation. EEOC charges must be filed before pursuing federal discrimination claims. Workers’ compensation claims go through the Texas Division of Workers’ Compensation. Wage and hour complaints can be filed with the U.S. Department of Labor.
If litigation becomes necessary, understanding the procedural requirements is essential. Texas has specific rules for employment litigation, including notice requirements, discovery rules, and summary judgment standards. Consulting with an employment attorney can help you understand your options and protect your rights throughout the litigation process.
For contractual disputes involving contract and law principles, reviewing the specific language of your employment agreement is crucial. Courts interpret contracts according to their plain language, and ambiguities are generally construed against the drafter.
If you believe you’ve been wrongfully terminated and wish to challenge unfavorable outcomes, understanding how to appeal a court decision ensures you can pursue all available remedies. Appeals in employment cases follow specific procedural rules and filing deadlines.
FAQ
What is the minimum wage in Texas?
Texas follows the federal minimum wage of $7.25 per hour. Some Texas municipalities have established higher minimum wages for public works projects and contractors. Employers must comply with the highest applicable wage requirement.
Can an employer fire me without cause in Texas?
Yes, Texas is an at-will employment state. Employers can terminate employees for any reason or no reason, provided the reason is not illegal. However, employees cannot be fired for protected activities such as reporting safety violations, serving on jury duty, or filing workers’ compensation claims.
How do I file a discrimination complaint in Texas?
You can file a charge of discrimination with the EEOC within 180 days of the discriminatory act. The EEOC will investigate and issue a right-to-sue letter, allowing you to pursue federal court litigation. Alternatively, you can file a complaint with the Texas Workforce Commission Civil Rights Division.
Are non-compete agreements enforceable in Texas?
Yes, non-compete agreements are enforceable in Texas if they are reasonable in scope, duration, and geographic area. Courts evaluate whether the agreement protects a legitimate business interest and imposes reasonable restrictions on the employee’s ability to work for competitors.
What should I do if my employer violates wage and hour laws?
You can file a complaint with the U.S. Department of Labor Wage and Hour Division or pursue private litigation. You may be entitled to back pay, overtime compensation, liquidated damages, and attorney’s fees. Consult with an employment attorney to understand your options.
Does Texas require paid time off?
No, Texas does not require employers to provide paid vacation, sick leave, or other paid time off. However, employers must comply with any leave policies they have established and cannot violate wage and hour laws when employees use accrued leave.
What is the difference between an independent contractor and an employee?
The IRS uses a common law test examining behavioral control, financial control, and relationship type. Employees are subject to employer control and receive benefits, while independent contractors control their work methods, invest in their own equipment, and serve multiple clients.
Can my employer monitor my email and computer use?
Yes, employers can generally monitor work email and computer use on company equipment, particularly if employees have notice. However, monitoring of personal communications on personal devices may receive greater privacy protection. Employers cannot intercept phone calls or record conversations without consent.
