Texas is one of the most business-friendly states in the US — no state income tax, no mandatory workers' comp, and strong at-will protections. But the Texas Non-Subscriber system creates real liability exposure if you opt out without the right safeguards in place. WorkGenius becomes your legal employer and manages every Texas obligation from day one.
Texas is the only state in the US that does not require private employers to carry workers' compensation insurance. Employers who "opt out" of the state system are called Non-Subscribers. While this reduces premium costs, it exposes non-subscribing employers to common-law negligence claims — and they cannot use the traditional defenses that subscribed employers enjoy. For out-of-state companies engaging Texas workers, understanding this distinction is critical before your first hire.
Get AB5-Compliant TodayTexas is business-friendly — but the Non-Subscriber trap and Texas Payday Law carry real risks for the unprepared.
WorkGenius subscribes to workers' comp for every Texas employee. You never operate as a Non-Subscriber — eliminating the most significant liability exposure in Texas employment law.
Texas requires pay at least twice a month for most employees. WorkGenius manages pay frequency, final paycheck timing (within 6 days of discharge), and all required wage statements under the Texas Payday Law.
Texas Workforce Commission unemployment insurance contributions calculated and remitted on every payroll cycle. New employer rate is 2.7% on the first $9,000 of each employee's wages.
Texas enforces non-competes that are ancillary to an otherwise enforceable agreement and reasonable in time, geography, and scope. WorkGenius drafts agreements that hold up under Texas Business & Commerce Code §15.50.
ACA-compliant health coverage, 401(k), PTO, and disability insurance — all enrolled and administered. Texas's no-state-tax environment makes total compensation packages more competitive dollar-for-dollar.
Final pay within 6 days of involuntary termination, compliant separation documentation, COBRA administration, and proper handling of any non-compete or confidentiality obligations at offboarding.
Most EOR providers use manual checklists. WorkGenius handles Texas workers' comp coverage, Payday Law compliance, and SUTA contributions directly in the platform — automatically, on every payroll cycle.
Texas is one of the most employer-friendly states — but several important obligations still apply.
The Texas Payday Law requires employers to pay employees at least semi-monthly (twice a month). Pay dates must be designated in advance and consistently observed. Violations can result in administrative penalties and wage claims filed with the Texas Workforce Commission.
Texas employers must register with the Texas Workforce Commission and pay State Unemployment Tax (SUTA) on the first $9,000 of each employee's wages. The new employer rate is 2.7%. WorkGenius registers, files, and remits all contributions on your behalf.
Texas's anti-discrimination law mirrors federal protections and applies to employers with 15 or more employees. It prohibits discrimination based on race, color, religion, sex, national origin, age, disability, and genetic information. WorkGenius employment agreements and policies reflect all Texas-specific requirements.
Texas is a strong at-will employment state. There are no state-mandated paid sick leave or paid family leave requirements. Texas law preempts local governments from enacting their own minimum wage or paid leave ordinances above the state level. WorkGenius documents every at-will employment relationship correctly.
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Correct — Texas is the only state in the US that does not mandate workers' compensation insurance for private employers. Employers who opt out are called "Non-Subscribers." While this reduces premium costs, Non-Subscriber employers cannot use traditional legal defenses (contributory negligence, assumption of risk) in workplace injury lawsuits, which can result in much larger damage awards. WorkGenius subscribes to workers' comp for every Texas employee, completely eliminating this exposure for your business.
Texas follows the federal minimum wage of $7.25 per hour. Unlike California, New York, or Illinois, Texas has not enacted a state minimum wage above the federal floor. There is no state-level minimum wage increase scheduled. Local ordinances that attempt to set a higher minimum wage are preempted by Texas law.
Texas has no state income tax, which means there is no state income tax withholding from employee paychecks. Federal income tax, Social Security, and Medicare still apply, but employees keep significantly more of their earnings than in states like California or New York. WorkGenius handles all federal and Texas-specific payroll obligations, including SUTA (unemployment insurance) contributions to the Texas Workforce Commission.
Under the Texas Payday Law, final pay is due within 6 calendar days of an involuntary termination (firing or layoff). For employees who resign, final pay is due on the next regularly scheduled payday. Unlike California, there is no same-day requirement, but the 6-day deadline for terminations is strictly enforced — late payments can result in administrative penalties and wage claims filed with the Texas Workforce Commission.
Yes, but Texas courts apply a specific test. Under Texas Business & Commerce Code §15.50, a non-compete must be ancillary to an otherwise enforceable agreement (such as a contract to provide confidential information or specialized training), and it must be reasonable in time, geographic area, and scope of activity restricted. Courts may modify — not invalidate — overly broad agreements. WorkGenius drafts non-compete provisions that meet the Texas standard while protecting your legitimate business interests.
No. Texas has no state-mandated paid sick leave, paid family leave, or paid disability insurance. Austin and San Antonio passed local paid sick leave ordinances, but both have been preempted or struck down by courts and are not currently in effect. This makes Texas one of the simplest states from a leave-compliance standpoint. WorkGenius still administers any voluntary PTO, federal FMLA leave, and ACA benefits as part of the employment package.
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