Texas Employment Law Compliance: What Every Dallas Employer Must Know in 2024

Texas employment law operates within a unique framework that combines federal regulations with state-specific provisions. For Dallas employers, understanding this layered system is critical for maintaining compliance and avoiding costly litigation.

At the federal level, employers must comply with laws including the Fair Labor Standards Act (FLSA), Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), and the Family and Medical Leave Act (FMLA). These laws set minimum standards that Texas employers must meet.

Texas adds its own layer of regulation through the Texas Payday Law, the Texas Commission on Human Rights Act, workers' compensation provisions (though Texas is the only state where private employers can opt out), and various licensing and industry-specific regulations.

What makes Texas unique is what it doesn't require. Unlike states like California or New York, Texas has no state minimum wage higher than the federal level, no mandatory paid sick leave, no state-mandated meal or rest breaks for adult employees, and relatively limited state-level anti-discrimination enforcement.

However, this doesn't mean Dallas employers operate in a regulatory vacuum. Federal laws still apply, and courts have increasingly held employers accountable for workplace violations. Additionally, some Texas cities, including Austin, have passed local ordinances that create additional requirements.

Wage and hour violations remain the most common source of employment lawsuits—and the most expensive. Dallas employers must understand these requirements thoroughly.

Minimum Wage Texas follows the federal minimum wage of $7.25 per hour. While this hasn't changed since 2009, there's ongoing discussion about potential increases. Tipped employees can be paid as little as $2.13 per hour if their tips bring them to minimum wage; if not, employers must make up the difference.

Overtime Requirements The FLSA requires overtime pay of 1.5 times regular rate for hours worked over 40 in a workweek for non-exempt employees. Recent changes to salary thresholds for exempt employees mean more workers now qualify for overtime. As of 2024, the salary threshold for the executive, administrative, and professional exemptions has increased significantly—check current DOL guidance for exact figures.

The Texas Payday Law This state law governs when and how employees must be paid. Key requirements include paying employees at least twice per month on regularly scheduled paydays, providing final paychecks to terminated employees by the next regular payday, and paying resigned employees who gave proper notice by the next regular payday (or within six days for employees who didn't give notice).

Record-Keeping Requirements Employers must maintain accurate records of hours worked, wages paid, and deductions made. The FLSA requires keeping these records for at least three years. The Texas Workforce Commission may request these records during investigations.

Texas employers face significant liability exposure for discrimination and harassment claims. Understanding your obligations is essential.

Protected Classes Federal law prohibits discrimination based on race, color, national origin, sex (including pregnancy, sexual orientation, and gender identity per recent Supreme Court interpretations), religion, age (40 and older), disability, and genetic information. The Texas Labor Code Chapter 21 mirrors many of these protections for employers with 15 or more employees.

Sexual Harassment in the Workplace Post-#MeToo, harassment claims have increased dramatically. Texas employers must provide a workplace free from sexual harassment, establish clear anti-harassment policies, investigate complaints promptly and thoroughly, and take appropriate corrective action. Texas SB 45, effective September 2021, expanded employer liability for sexual harassment and extended the statute of limitations for filing claims.

Reasonable Accommodations Under the ADA, employers with 15 or more employees must provide reasonable accommodations to qualified individuals with disabilities. This includes modifications to work schedules, equipment, or job duties that enable employees to perform essential functions. The key is engaging in an interactive process with the employee to identify effective accommodations.

Religious Accommodations Employers must also accommodate employees' religious practices unless doing so creates undue hardship. Recent Supreme Court decisions have raised the bar for what constitutes "undue hardship," making it harder for employers to deny accommodation requests.

Managing employee leave requires careful attention to overlapping federal and state requirements.

Family and Medical Leave Act (FMLA) Employers with 50 or more employees within a 75-mile radius must provide eligible employees up to 12 weeks of unpaid, job-protected leave annually for birth or adoption of a child, serious health condition of the employee, care for a family member with a serious health condition, or qualifying military exigencies. Eligible employees must have worked for 12 months and 1,250 hours in the preceding year.

Military Leave The Uniformed Services Employment and Reemployment Rights Act (USERRA) protects employees who serve in the military. Texas also provides additional protections for National Guard members under state law.

Jury Duty Texas employers cannot terminate or threaten employees for jury service. While you're not required to pay wages during jury duty, many Dallas employers choose to do so as a benefit.

Voting Leave Texas requires employers to provide employees paid time off to vote if they don't have sufficient time outside working hours. Polls are open 7 AM to 7 PM on election days.

Workers' Compensation Texas is unique in not requiring private employers to carry workers' compensation insurance. However, employers who opt out face potential lawsuits from injured employees without the protections workers' comp provides. Most Dallas employers choose to maintain coverage.

Employment law evolves constantly. Here are key developments Dallas employers should know:

NLRA and Protected Concerted Activity The National Labor Relations Board has become increasingly active in protecting employees' rights to discuss working conditions—even in non-union workplaces. Employers must be careful that handbook policies don't chill protected activity.

Pay Transparency Trends While Texas doesn't currently require pay transparency, federal contractors face disclosure requirements, and the trend toward pay transparency continues nationally. Smart Dallas employers are preparing now.

Non-Compete Agreements The FTC has proposed significant limitations on non-compete agreements. While currently contested in courts, Texas employers should review their restrictive covenant practices and consider alternatives like non-solicitation agreements.

AI in Employment Decisions As more Dallas companies use AI for hiring, the EEOC has issued guidance on ensuring these tools don't create discriminatory impacts. Audit your AI systems regularly.

Independent Contractor Classification The DOL has issued new rules on worker classification that make it harder to classify workers as independent contractors. Dallas gig economy companies and those using contractors should review their arrangements.

Compliance isn't just about avoiding lawsuits—it's about building a sustainable, ethical business.

Training Programs Invest in regular training for managers and employees on harassment prevention, discrimination awareness, and proper documentation practices. Texas companies with 50+ employees should provide harassment training at least every two years.

Documentation Best Practices Maintain thorough records of employment decisions, performance evaluations, disciplinary actions, and complaint investigations. Good documentation is your best defense against claims.

Internal Audit Processes Conduct regular self-audits of your employment practices, examining wage and hour compliance, classification decisions, and policy implementation.

Working with HR Consultants Many Dallas businesses benefit from partnering with HR consultants who stay current on regulatory changes and can provide objective assessment of compliance status.