Labor laws in Texas: Regulations and compliance guide for employers

While federal law establishes a foundation for employee rights, each state adds its own layer of rules—and Texas is no exception. The Lone State applies the Fair Labor Standards Act (FLSA) nationwide standards for wages, hours, and worker protections in its own way. To ensure compliance and avoid costly penalties, employers need to understand how labor laws in Texas build upon and differ from federal requirements.

This guide breaks down key employment laws in Texas, including at-will employment and the right-to-work law in the state, to keep your business compliant.

Understanding Texas employment laws

Unlike some states, there is no distinct Texas fair labor standards act. Instead, employers must abide by the FLSA rules to determine wages, hours, and overtime. However, Texas does have other state-specific employment regulations that work alongside federal law, such as wage payment rules, child labor restrictions, and workplace safety standards enforced by the Texas Workforce Commission (TWC).

In addition, Texas is an at-will employment state, meaning employers and employees can terminate their working relationship at any time for any reason, assuming there isn’t an employment contract in place.

Texas is also a right-to-work state. While the National Labor Relations Act applies in Texas, employers cannot require employees to join or pay dues to a union as a condition of employment.

Employee rights in Texas

Texas doesn’t have as strict statewide protections as California, New York, or Washington, but it still requires employers to ensure a safe and equitable workplace, free from discrimination. 

Here are the key areas employers should understand to stay compliant with Texas labor laws.

Discrimination-free workplaces

Under the Texas Labor Code and Title VII of the Civil Rights Act, employers cannot discriminate on the basis of race, color, disability, religion, sex, national origin, or age. In Texas, employers must prevent workplace harassment and discrimination, respond to complaints, and not retaliate against employees who make claims.

Workers’ rights in Texas

Texas minimum wage and overtime pay laws follow the FLSA. The Occupational Safety and Health Administration (OSHA) sets workplace safety laws and gives employees the right to file worker’s compensation claims for injuries they suffer on the job. In addition, employers cannot fire employees for attending jury duty.

Protections for immigrant employees

Texas employers must follow all federal I-9 requirements to verify employment eligibility. Employers must apply federal law equally to all authorized employees, regardless of their immigration status.

Sick, safe, and family leave

Texas doesn’t mandate paid sick leave at the state level. Instead, sick leave policies are left to the employer’s discretion and governed by federal law under the Family and Medical Leave Act (FMLA). The FMLA requires employers with 50 or more employees to provide up to 12 weeks of unpaid leave. They must also maintain health insurance coverage during that period and restore employees to their original or an equivalent position upon return. 

Breaks and rest periods

While Texas doesn’t mandate meal breaks or rest periods for adult employees, the state must comply with FLSA and compensate employees during short breaks of 5-20 minutes. Employers must provide minors with breaks as dictated by child labor laws.

Texas work schedule laws and wage requirements

When it comes to wages and work schedules, Texas defers completely to federal law. Under the FLSA and Texas labor laws, these rules apply to hourly and salaried employees.

Texas minimum wage

Texas uses the federal minimum wage of $7.25 per hour. Employers can pay tipped employees a lower rate—currently $2.13 per hour—as long as tips and wages combined reach the federal minimum wage. 

Overtime eligibility and calculations 

Texas calculates overtime pay using FLSA standards. Non-exempt employees must receive overtime pay at a rate of 1.5 times their hourly rate for hours worked in excess of 40 hours per week. Exempt employees—typically individuals in salaried positions—do not receive overtime pay. 

Texas work schedule laws

For adults, Texas imposes no restrictions or limits on the number of hours worked. However, the Texas Payday Law states that employers must institute a regular payday schedule with, at least, semi-monthly pay periods for non-exempt employees.

Child labor laws and restrictions

Child labor laws in Texas prohibit minors under the age of 14 from working, with limited exceptions for certain jobs, such as delivery work, roles in entertainment, or employment in a family business. For 14 and 15-year-olds, the state restricts the number of hours they can work to ensure education remains a priority, especially during the school year. While 16 and 17-year-olds face fewer limits on working hours, occupational safety laws still prohibit all minors from performing hazardous jobs.

Onboarding, termination, and pay practices

Employers have considerable flexibility in Texas, but this doesn’t mean employees don’t have rights. Here’s a breakdown of key rules governing onboarding, termination, and compensation in the state.

At-will employment and exceptions

While Texas is an at-will employment state, there are exceptions. Employers can’t dismiss an employee if it violates public policy on discrimination or retaliation. They also can’t fire someone for refusing to break the law. If there’s an employment contract in place, it supersedes at-will employment law. 

Final paycheck requirements

The Texas Payday Law mandates final paycheck requirements. Specifically, upon termination, the employer must pay the employee all compensation due within six days. If the employee quits, payment must arrive on the next scheduled payday.

Federal and state labor law posters

All Texas employers must post federal and state labor law notices where employees can easily see them. If you don’t display labor law posters, you’re out of compliance and subject to fines and penalties.

Required federal labor law posters include the FLSA minimum wage notice, OSHA workplace safety notice, and other notices from the Department of Labor (DOL) covering discrimination, minimum wage, and overtime pay. Texas-specific labor law posters include notices about the Texas Payday Law and child labor laws. 

Updating posters with new labor law changes

Employers are responsible for ensuring that all labor law posters reflect the most current federal and state requirements. Whenever a law changes—such as an increase in the federal minimum wage or a new workplace safety regulation—updated posters must be displayed immediately to remain in compliance.

Penalties and consequences for violations

If an employer fails to comply with the FLSA or Texas state employment laws, they can face penalties or other corrective measures. Here are some of the consequences to avoid.

Civil and administrative penalties 

The DOL oversees the enforcement of federal labor laws in Texas, while the TWC enforces most state employment laws and regulations. Jurisdiction varies, but violations such as miscalculating overtime pay, improperly classifying employees, and discrimination can result in punishment. Remedies include providing backpay and administrative or civil fines. 

Possible lawsuits and reputational risks

Non-compliance can lead to private lawsuits. Employees can sue under federal or state law for discrimination, occupational safety hazards, and wrongful termination, just to name a few. Beyond legal defense costs and potential financial damages, companies also risk significant reputational harm that can affect their brand and employee morale.

Risk mitigation through audits and compliance programs

Regular internal audits help employers stay proactive about compliance issues. Review exempt and non-exempt classifications, overtime procedures, and other pay practices to ensure you’re following applicable federal and state labor laws and treating your workforce fairly. 

Hire in Texas and stay compliant with Oyster

Texas follows many federal labor laws set by the DOL, including those on minimum wage and overtime, but also enforces its own rules through the TWC, such as the Texas Payday Law. To stay compliant, employers must understand how Texas labor laws align with federal standards. For businesses operating across multiple states or cities, managing these variations can be a complex compliance challenge.

Oyster is your strategic partner for navigating compliance across the U.S. and abroad. Its Professional Employer Organization (PEO) streamlines HR, payroll, and benefits management in the U.S. while ensuring compliance. For international teams, Oyster’s global employment solutions make it easy to stay compliant across multiple countries. Whether you do business solely in the U.S. or internationally, Oyster can help streamline your compliance operations while minimizing complexity and hassle.

Learn about Oyster’s PEO and check out our Global Compliance solution today.

About Oyster

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