Texas Labor Laws: What Employers and Workers Need to Know

There are many federal labor and employment laws that Texas employers must follow. Businesses must prevent employment discrimination, maintain fair employee schedules, and uphold the minimum wage.

Texas also has a variety of state laws that complement existing federal laws. Let’s look at labor laws in Texas and learn how to keep your company up to code.

Labor laws are all about protecting employee rights. Throughout the United States, labor law is split between the federal and state governments.

While the federal government’s Department of Labor handles most federal-level laws, the Texas Workforce Commission (TWC) handles local complaints.

Complaints can include employment discrimination, unpaid and underpaid minimum wages, and child labor law incidents in Texas.

Requirements for submitting a discrimination claim

Employees who believe their employers have illegally discriminated against them should contact the TWC Civil Rights Commission. A valid discrimination claim requires these conditions:

• Employees must work for a Texas business with 15 or more team members

• The incident occurred within the past 180 days of the complaint

• The incident caused the employee harm

Once the employee submits their claim, the Civil Rights Commission will investigate the complaint.

Employees who believe they are not receiving their agreed compensation (which could include receiving hourly payments less than minimum wage) may consider contacting the TWC.

Essential employee recordkeeping for businesses

The TWC requires employers to keep, at the very least, the identical records that the Department of Labor audits.

For the state of Texas, this includes recordkeeping that goes back four years. Records for each employee should consist of:

• Full name and address

• Date of birth (if the employee is younger than 19)

• Employee’s gender and occupation for verification of equal pay

• Hours worked in each workweek and employee’s rate of pay

• Straight-time earnings (without overtime) and overtime earnings

• Total wages paid and deductions

• Pay periods

• Back pay

Discriminating against employees based on race, national origin, gender, color, ethnicity, age, or disability is illegal under the Texas Labor Code and various federal laws.

Limiting diversity is bad for business in general. A diverse team can provide insight into the needs of a diverse customer base. According to Forbes, it also helps you access a broader range of talent.

In addition to anti-discrimination laws, Texas or federal regulations govern emergency evacuation, protection against retaliation, and the employment of minors.

Age discrimination and child labor laws

The Texas Labor Code bans age discrimination. Further, the federal Age Discrimination in Employment Act of 1967 outlaws discrimination against employees, potential employees, and union members aged 40 or older.

This act doesn’t offer protection against favoring team members older than 40 over younger employees.

The Texas Child Labor Law applies to any employee under age 18. It prevents minors from working in hazardous occupations and regulates hours of employment.

On the federal level, the Fair Labor Standards Act (FLSA) also protects children’s safety and prioritizes their education.

Though the Texas law applies to all companies, the FLSA can exempt agricultural businesses and organizations which employ the owner’s children.

Race, color, religion, sex and national origin

Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race, gender, national origin, and religious practice. It also prohibits sexual harassment.

Later amendments to the act established the federal Equal Employment Opportunity Commission (EEOC). The TWC collaborates with the EEOC in investigating potential employment discrimination claims.

Disability

The Americans with Disabilities Act outlaws discrimination against employees or job applicants with disabilities.

It also mandates that employers provide reasonable accommodation for those who require physical or medical aid. Reasonable accommodation might include assistive devices or an interpreter.

Emergency evacuation

Section 22 of the Texas Labor Code forbids discrimination against employees who leave work to participate in a government-issued emergency evacuation order.

Texas and local governments issue evacuation orders during disasters like floods or earthquakes.

Employee retaliation

Texas Labor Code Chapter 21, Title VII of the Civil Rights Act (Title VII), the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act (ADA) all protect individuals from retaliation for standing up for their employment rights.

Chapter 21 of the Texas Labor Code applies to all private companies with more than 15 employees and all state and local government employers.

Based on these acts, employers may not fire, demote, or otherwise retaliate against an individual who files a labor law complaint.

Compensation laws ensure workers receive adequate and timely payment for their work under their employment contracts.

Federal minimum wage versus Texas minimum wage

The federal minimum wage is $7.25 an hour for non-tipped workers and $2.13 per hour for tipped workers. The federal government defines tipped workers as those who earn at least $30 a month in tips.

The Texas state minimum wage is the same as the federal wage; however, the state defines tipped workers as those who earn at least $20 a month in tips.

Texas also orders that tipped workers earn at least $7.25 an hour, including their tips. Employers can pay youth and students less than $7.25 an hour.

The Texas minimum wage law also asks employers to display posters about minimum wage regulations in the workplace prominently.

Texas Payday Law

The Texas Payday Law is Chapter 61 of the Texas Labor Code. It applies to all private employers but exempts employees who are relatives of the business owner and independent contractors.

The law states that employers must pay wages in US dollars disbursed by check at their worksite during business hours, by registered mail, or by direct deposit.

If an employment contract or handbook specifies benefits such as vacation or sick leave, employers must provide a payout if employees leave the job.

Regulations specify that employees must be compensated for their time on the employers’ premises, while on duty, or on location at a specified job site.

Overtime pay laws

The FLSA governs overtime pay. Companies must pay overtime at 1.5 times the employee’s base pay rate for all non-exempt employees. Most hourly or part-time employees are non-exempt employees.

Exempt employees are usually managers or professionals exempt from overtime pay requirements.

Severance Pay Laws

The Texas Payday Law instructs that employers pay severance pay only if the company has a written severance pay policy.

Severance pay is income paid at the termination of employment in addition to the employee’s usual earnings. Employers can pay severance in installments or a lump sum.

Employees should be mindful of the Texas Unemployment Compensation Act, which states that the employee will not receive unemployment compensation if they are currently receiving severance pay.

Workers’ compensation laws

Texas does not require that companies have workers’ compensation coverage. But, according to the TWC, operating without coverage can be risky for businesses. Workers can sue for damages if businesses operate with less restricted limits.

The workers’ compensation law places limits on damages. Companies offering workers’ compensation must apply for any workplace injury, regardless of fault.

Employees must file a claim within 30 days of the injury to receive medical and income benefits. Under the Workers’ Compensation Law, team members can receive temporary income benefits of up to 75 percent of their average weekly wage. Benefits can apply after seven days of missed work.

The benefits continue until the employee returns to work or the doctor indicates they’ve reached the “maximum clinical improvement.”

Workers may also be eligible for impairment, supplemental, and lifetime income for severe injuries. In the case of fatal injury, an employee’s surviving family is eligible for death benefits.

Regulations protect workers’ comp as well. Chapter 451 of the Workers’ Compensation Law forbids retaliation against an employee who files a workers’ compensation claim.

Scheduling and break laws

Providing work-life balance is critical for companies wishing to retain top talent. According to a Purdue University study, work-life balance leads to fewer health costs and sick days.

So then, a business must reach this work-life balance goal. Texas state and federal time off laws support rest periods and break times.

In Texas, retail employers must allow full-time employees at least one 24-hour period off each week. Employers of 15 workers or more also must allow employees time off for religious observances.

Nurses are not required to work overtime except during disasters and public emergencies.

The FLSA requires all non-exempt employees to be paid overtime for working more than 40 hours per week. Section 7 of the FLSA also prescribes nursing mother breaks. The law limits the number of hours minors can work on school days.

Neither state nor federal law obligates employers to grant meal or rest breaks. However, the FLSA does mandate that if employers don’t offer breaks longer than 15 minutes, they must pay the employee for those short rest periods.

Time off and leave of absence laws

The federal Family and Medical Leave Act requires qualifying employers to provide 12 weeks of job-protected, non-paid time off when employees have just given birth to, adopted, or fostered a child. Qualifying employers are those with 50 or more employees.

It also provides 12 weeks of non-paid leave to care for a sick relative or an employee’s illness. Further, it provides up to 26 weeks to care for a covered military service member.

Texas does not have a mandatory paid sick leave law.

Exempt employees in Texas can receive paid time off for jury duty leave. However, employers do not have to provide paid jury duty leave to non-exempt employees. But, they cannot take adverse action against an employee for taking time off to serve on a jury or testify in court.

The state of Texas Election Code requires employers to pay employees for time off to vote unless the employee has two consecutive hours available before or after work to vote.

Keeping the state’s employers up-to-date with labor laws can be a Texas-sized task.

Understanding the law can be complex, and exemptions can make it even more difficult. Knowing the differences between federal and state laws almost requires a law degree. For instance, while only companies with 50 or more employees must comply with FMLA, Chapter 21 of the Texas Labor Code applies to employers with more than 15 employees.

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Texas employers: want to remain compliant with the recordkeeping requirements, overtime laws, payroll, and compensation? Hubstaff provides features that keep track of employee hours and leave time, automate payroll and scheduling, and track projects.

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