How to Hire a New Employee in Texas (2026)

Reviewed by DocDraft Legal Team · Texas · Last updated 2026-05-18

Bringing on an employee in Texas starts with the state minimum wage and the federal new-hire reporting clock. In Texas, $7.25 per hour (federal floor; Texas adopts the federal FLSA rate by Tex. Lab. Code section 62.051). The statutory anchor is Texas adopts the federal FLSA rate by Tex. Lab. Code section 62.051). The state new-hire portal accepts reports due employers must report new hires and rehires within 20 calendar days from the date in which the employee starts earning wages. This guide explains the Texas-specific rules on UI registration, workers' compensation thresholds, E-Verify, mandatory posters, and at-will employment.

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Key Considerations

Within the first month of a Texas hire, two agency filings are due. New-hire reporting: Employers must report new hires and rehires within 20 calendar days from the date in which the employee starts earning wages. UI tax registration:

Pay rate is the first regulated number in a Texas employment relationship. $7.25 per hour (federal floor; Texas adopts the federal FLSA rate by Tex. Lab. Code section 62.051). No state rate above federal; no scheduled increase under current law.

Texas treats workers' comp, E-Verify, and at-will employment as three separate compliance levers. Workers' comp: Coverage is ELECTIVE for private employers under Tex. Lab. Code section 406.002(a); employers who do not subscribe ('non-subscribers') lose common-law defenses under Tex. Lab. Code section 406.033. Public employers must carry coverage. E-Verify: Texas state agencies and institutions of higher education must use E-Verify for all new hires per Tex. Gov't Code section 673.002 (S.B. 374, 2015). State contractors required by executive order. No general private-employer mandate. At-will: Texas is an at-will employment state by common law (no codified statute analogous to Cal. Labor Code 2922). Recognized exception: narrow public-policy 'Sabine Pilot' exception (refusal to perform an illegal act) per Sabine Pilot Service, Inc. v. Hauck, 687 S.W.2d 733 (Tex. 1985). Statutory limits: Tex. Lab. Code Chapter 21 (employment discrimination), workers' comp anti-retaliation (Tex. Lab. Code section 451.001), whistleblower (Tex. Gov't Code Chapter 554 for public employees).

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Relevant Documents

In Texas the hire-side document stack runs from federal Form I-9 through Form W-4 (federal) and the Texas state withholding addendum (where applicable), then the Texas new-hire report (Employers must report new hires and rehires within 20 calendar days from the date in which the employee starts earning wages.), then workers' compensation enrollment paperwork (Coverage is ELECTIVE for private employers under Tex. Lab. Code section 406.002(a); employers who do not subscribe ('non-subscribers') lose common-law defenses under Tex. Lab. Code section 406.033. Public employers must carry coverage.).

Relevant Laws

Texas Payday Law

Employers in Texas must establish regular paydays and provide employees with specific information about their wages. This law governs when and how employees must be paid and provides remedies for wage payment violations.

Texas Workforce Commission - New Hire Reporting

Texas employers must report newly hired employees to the Texas Workforce Commission within 20 days of hire. This requirement helps with child support enforcement and reduces fraudulent unemployment and workers' compensation payments.

Texas Labor Code - Employment Discrimination

Texas employers with 15 or more employees must comply with state anti-discrimination laws that prohibit discrimination based on race, color, disability, religion, sex, national origin, or age. Understanding these protections is essential when hiring new employees.

Federal I-9 Employment Eligibility Verification

All employers in Texas must verify the identity and employment authorization of each person hired by completing Form I-9. This federal requirement applies to all employers regardless of size.

Texas Unemployment Compensation Act

Most Texas employers must pay unemployment taxes on wages paid to employees. New employers must register with the Texas Workforce Commission within 10 days of becoming liable for unemployment tax.

Texas Workers' Compensation Act

While workers' compensation insurance is not mandatory in Texas, employers who choose not to carry it (non-subscribers) lose important legal defenses in the event of workplace injuries. Employers must notify new hires of their workers' compensation status.

Texas Right to Work Laws

Texas is a 'right-to-work' state, meaning employees cannot be required to join a union or pay union dues as a condition of employment. This affects how employers can structure their workplace policies regarding union membership.

Regional Variances

Major Metropolitan Areas

Austin has additional requirements for employers including mandatory rest breaks for construction workers (10-minute rest break for every 4 hours worked). The city also has stricter 'ban-the-box' ordinances that prohibit employers from asking about criminal history until a conditional job offer has been made.

Dallas enforces paid sick leave ordinances that require employers to provide one hour of paid sick leave for every 30 hours worked, up to 64 hours annually for businesses with more than 15 employees (48 hours for smaller businesses). However, these ordinances have faced legal challenges regarding enforcement.

San Antonio has attempted to implement paid sick leave ordinances similar to Dallas, though enforcement has been blocked by court challenges. Employers should stay updated on the current status of these ordinances as legal battles continue.

Border Regions

El Paso has unique employment considerations due to its border location. Employers must be particularly vigilant about I-9 verification and may face more frequent immigration compliance checks. The city also has bilingual requirements for certain public-facing positions.

Laredo employers often deal with cross-border employment situations and must navigate both Texas and federal regulations regarding workers who commute from Mexico. Special attention must be paid to work visa requirements and international tax implications.

Energy-Focused Regions

Houston has industry-specific employment regulations related to its energy sector. Employers in oil, gas, and petrochemical industries face additional safety training requirements and compliance with both city ordinances and heightened OSHA enforcement specific to these industries.

This region has specialized employment considerations for the oil and gas industry, including different overtime practices and safety requirements. Due to the cyclical nature of the energy industry, employers here often have specific temporary and contract worker regulations.

Suggested Compliance Checklist

Transmit the PRWORA new-hire record

On hire days after starting

The cadence rule is Employers must report new hires and rehires within 20 calendar days from the date in which the employee starts earning wages.

Activate an employer UI tax account in Texas

Before first payroll days after starting

Registration runs

File Form I-9 for the new hire on day one of work (employee section) and within 3 business days for the employer section

Before first hire days after starting

Retention rule: 3 years after hire or 1 year after termination, whichever is later.

Look up the Texas workers'-compensation employer-count or payroll trigger

On hire days after starting

Statutory posture: Coverage is ELECTIVE for private employers under Tex. Lab. Code section 406.002(a); employers who do not subscribe ('non-subscribers') lose common-law defenses under Tex. Lab. Code section 406.033. Public employers must carry coverage.

Run withholding setup at hire

On hire days after starting

Federal Form W-4 is required for every employee. The Texas state withholding addendum (where the state operates a separate income-tax withholding regime) is required in addition.

Set the work-authorization verification process

Before hire days after starting

In Texas: Texas state agencies and institutions of higher education must use E-Verify for all new hires per Tex. Gov't Code section 673.002 (S.B. 374, 2015). State contractors required by executive order. No general private-employer mandate.

Post the required workplace notices

Before first hire days after starting

Texas requires: Reporting Workplace Violence; Equal Employment Opportunity; Worker's Compensation; Texas Payday and Unemployment Compensation

Document the at-will employment posture in the offer letter and any employee handbook

Before hire days after starting

In Texas: Texas is an at-will employment state by common law (no codified statute analogous to Cal. Labor Code 2922). Recognized exception: narrow public-policy 'Sabine Pilot' exception (refusal to perform an illegal act) per Sabine Pilot Service, Inc. v. Hauck, 687 S.W.2d 733 (Tex. 1985). Statutory limits: Tex. Lab. Code Chapter 21 (employment discrimination), workers' comp anti-retaliation (Tex. Lab. Code section 451.001), whistleblower (Tex. Gov't Code Chapter 554 for public employees).

Document: employment-offer-letter

Frequently Asked Questions

Texas requires the new-hire report to be filed Employers must report new hires and rehires within 20 calendar days from the date in which the employee starts earning wages. The federal anchor for the report itself is the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996.

$7.25 per hour (federal floor; Texas adopts the federal FLSA rate by Tex. Lab. Code section 62.051). No state rate above federal; no scheduled increase under current law.

In Texas, the E-Verify posture for private employers is: Texas state agencies and institutions of higher education must use E-Verify for all new hires per Tex. Gov't Code section 673.002 (S.B. 374, 2015). State contractors required by executive order. No general private-employer mandate. Federal contractors with a FAR E-Verify clause must still use E-Verify regardless of state law.

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How to Hire a New Employee in Texas (2026) - DocDraft