Whether you are an experienced business owner, or just starting out, you’re probably aware that there are a lot of laws pertaining to employment wherever your business is located. While many of these laws vary by state, some are federal laws which apply across all 50 states. These laws relate to all aspects of employment—including hiring, termination, and compensation—and it’s essential for all business owners to be familiar with these laws in order to avoid any costly disputes or legal trouble.
In today’s blog, we’ll go over the most important elements of employment law for Texas employers to keep in mind. Even if you’ve been operating a business in Texas for years, it’s always good to refresh your memory on the laws that govern your day-to-day operations. For new business owners, or those thinking of starting a business—pay close attention! If you do not comply with these state and federal requirements, you could risk serious legal action.
Here are some of the most important Texas employment laws you need to be aware of as an employer:
Wages and Hour Standards
Texas has a relatively relaxed approach to wage and hour standards for employers. The minimum wage is set at the federal minimum wage of $7.25 an hour, with an exception for tipped employees. There are no state labor laws mandating meals or breaks for employees, nor are there any federal laws that state that employers must provide breaks. The same applies for overtime: because Texas does not specify any type of overtime wage, Federal overtime laws apply. As such, the requirements under the FLSA (Fair Labor Standards Act) will govern wage and hour issues in Texas.
Workplace Safety and Injuries
In the state of Texas, the federal Occupational Safety and Health Act applies to ensure workplace safety at all places of employment. It is an employer’s responsibility to provide a workplace that is free from known health and safety hazards—and the employee is always free to request an OSHA inspection. Part of maintaining a safe and healthy working environment is providing the proper training and equipment for all tasks performed, in addition to providing protection from any potentially hazardous substances. If you are in the construction business, it is extremely important that you follow all of OSHA’s requirements when it comes to safety equipment and guidelines. Just because you hire a subcontractor does not mean you are off of the hook. If you see a subcontractor violating OSHA, you need to step in and correct the issue so that you and your company are protected. Turning a blind eye to the problem can result in significant legal liability for you and your company.
Fast fact: Private employers in Texas, unlike in other states, are not required to carry worker’s compensation insurance. However, not carrying worker’s compensation insurance opens your business up to significant liability, including punitive damages.
One of the most important things employers need to understand about employment in Texas is that the state of Texas has no laws that mandate paid time off. This includes sick time, holidays, vacation, or any other PTO—and this may sound like a wonderful thing that will save you money in the long run, until you realize that most employers offer PTO anyway, even though they don’t have to. Especially in a tight labor market like this one, you may find it advisable to continue providing some amount of PTO to remain competitive and keep talent around. But, legally speaking, there are no state nor federal laws that mandate employer-provided paid time off (PTO).
While employers do not have to offer paid leave, there are federal laws that require unpaid leave on certain occasions. Unpaid leave is required for family and medical leave, military leave, military family leave, jury duty, and voting. The federal Family and Medical Leave Act (FMLA) requires most employers to give eligible employees up to twelve weeks of unpaid time off, after which they will be reinstated without penalty. Under the Uniformed Services Employment and Reemployment Rights Act (USERRA), those who take leave from work for military service must be reinstated after their service.
Texas follows the at-will employment doctrine, meaning that employees are able to quit at any time, for any reason, and employers can terminate at any time, for any reason. This does not mean that you can fire someone because you feel like it. There are many state and federal laws and regulations in place to protect both the employer and the employee when it comes to unlawful termination. Most of these laws deal with protecting an employee from a case of discrimination, such as terminating someone on the basis of race, gender, national origin, disability, religion, age, or pregnancy. Additionally, Texas does have a few additional regulations that come into play when you terminate someone which focus primarily upon paycheck and unemployment insurance. If you’re intending to terminate an employee, you’ll want to document the process carefully throughout to protect yourself.
These are just a few of the highlights relating to labor and employment laws that are relevant for Texas employers. For a full list of rules and regulations that cover employers and employees in Texas, visit the Texas Workforce Commission for more information, or contact my office with any questions you may have. As a small business owner, you don’t have a lot of extra time or money to spend fending off potential legal action caused by even an unintentional violation of any of these laws, so it’s essential to make sure that you have taken steps to protect yourself every step of the way.