What Every Employer Should Know Before Expanding Their Workforce
As Texas continues to attract growing businesses and startups, many employers are expanding operations and hiring new employees across the state. However, hiring in Texas comes with a set of legal obligations that every employer must understand—from wage laws to reporting requirements.
If you’re launching a new office in Texas or maybe scaling your workforce, staying compliant with state and federal employment laws is critical. In this guide, we break down the key legal requirements for hiring employees in Texas in 2026 and how businesses can avoid costly compliance mistakes.
1. Obtain an Employer Identification Number (EIN)
Before hiring employees in Texas, businesses must obtain a Federal Employer Identification Number (EIN) from the IRS. This number is used for federal tax filings, payroll reporting, and employee tax documentation.
Most businesses must have an EIN before paying wages, filing payroll taxes, or issuing tax forms such as W-2s.
2. Verify Employee Work Eligibility
Federal law requires all employers to verify that employees are legally authorized to work in the United States.
Employers must complete Form I-9 (Employment Eligibility Verification) within three days of the employee’s start date.
This process requires employers to:
- Review identity and work authorization documents
- Complete and retain the I-9 form
- Maintain proper documentation for compliance audits
Failure to properly verify employment eligibility can lead to significant fines and penalties.
3. Report New Hires to the State of Texas
Texas law requires employers to report all newly hired and rehired employees within 20 days of their hire date to the State Directory of New Hires.
Employers must submit information including:
- Company name and address
- Federal Employer Identification Number
- Employee name and Social Security number
- Employee address
- First day of paid work
Failure to report new hires can result in penalties of $25 per unreported employee, or up to $500 if an employer knowingly fails to report.
New hire reporting helps the state enforce child support orders and prevent unemployment insurance fraud.
4. Comply With Texas Minimum Wage Laws
Texas follows the federal minimum wage, which remains $7.25 per hour in 2026 for non-exempt employees.
Employers should also be aware of additional wage rules:
- Tipped employees may receive a base wage of $2.13 per hour, provided tips bring earnings to at least minimum wage.
- Workers under age 20 may be paid a youth training wage of $4.25 per hour for their first 90 days.
- Texas law does not allow cities or counties to set their own higher minimum wages.
Employers must also provide employees with written earnings statements that clearly show wages and deductions.
5. Register for Texas Unemployment Taxes
Employers who hire employees in Texas must register with the Texas Workforce Commission (TWC) for unemployment insurance tax.
Key requirements include:
- Reporting employee wages quarterly
- Paying unemployment taxes on the first $9,000 of each employee’s wages per year
- Filing wage reports electronically with the state
This system provides unemployment benefits to workers who lose their jobs through no fault of their own.
6. Understand Key Employment Law Thresholds
Many federal and Texas employment laws apply once a company reaches a certain number of employees.
For example:
| Number of Employees | Law Applies |
|---|---|
| 1 employee | OSHA safety requirements |
| 15 employees | Anti-discrimination laws (Title VII, ADA) |
| 20 employees | Age Discrimination in Employment Act |
| 50 employees | Family and Medical Leave Act (FMLA) |
| 100 employees | WARN Act for layoffs |
Understanding these thresholds is important as your company grows and your compliance responsibilities increase.
7. Provide Required Workplace Policies and Notices
Texas employers must also maintain compliant workplace practices, including:
- Employee handbooks and workplace policies
- Workplace safety standards under OSHA
- Anti-harassment and discrimination policies
- Payroll recordkeeping and pay compliance
- Required labor law postings
These policies help protect both employees and employers from disputes or regulatory issues.
Common Hiring Mistakes Businesses Make in Texas
Even experienced employers sometimes overlook compliance requirements when hiring in a new state. Some of the most common mistakes include:
- Misclassifying employees as independent contractors
- Failing to report new hires
- Missing required wage documentation
- Not registering for unemployment insurance taxes
- Using outdated or non-compliant employee handbooks
Working with an experienced HR consulting partner can help businesses avoid these risks while building a strong and compliant workforce.
How CWCHR Helps Businesses Hiring in Texas
Expanding into a new state can be exciting—but it also introduces new HR compliance responsibilities.
At CWCHR, we help businesses navigate employment regulations, develop compliant HR policies, and build strong people strategies that support growth.
Our HR consultants provide support with:
- Multi-state HR compliance
- Employee handbook development
- Hiring and onboarding processes
- Payroll and wage compliance guidance
- HR strategy for growing businesses
As we expand our services into Texas, our team is ready to support companies that want to hire confidently while staying compliant with state and federal employment laws.
Need HR Support for Hiring in Texas?
If your company is expanding into Texas or preparing to hire employees in the state, our HR experts can help you build a compliant and scalable workforce strategy.
📅 Schedule a consultation with CWCHR today
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📩 Email us at info@cwchr.com with your availability and our team will coordinate a call