Employer of Record · Texas

Employer of Record in Texas.
Non-Subscriber Ready.

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.

$7.25/hr
Minimum wage (federal)
No
State income tax
Optional
Workers' compensation

Texas by the Numbers

Minimum wage
$7.25/hr
Texas follows the federal minimum — no state increase above $7.25/hr
State income tax
$0
Texas has no state income tax, simplifying payroll withholding significantly
Workers' compensation
Optional
Texas is the only state that does not require employers to carry workers' comp
Final paycheck
6 days
Due within 6 days of discharge; within 6 days of resignation with notice, or next payday
Non-compete agreements
Enforceable
Enforceable if ancillary to an otherwise enforceable agreement and reasonable in scope
Paid leave mandate
None (state)
No state-mandated paid sick or family leave; Austin and San Antonio local ordinances preempted
The Defining Law

The Texas Non-Subscriber System: Workers' Comp Without a Safety Net

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.

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The ABC Test
  • Texas is the only state where workers' comp is entirely optional for private employers
  • Non-Subscriber employers lose the ability to use contributory negligence, assumption of risk, and fellow-servant defenses in injury lawsuits
  • Non-Subscribers must report their status to the Texas Department of Insurance annually
  • Non-Subscribers must notify employees in writing that they do not carry workers' comp coverage
  • WorkGenius subscribes to workers' comp coverage for all Texas employees — eliminating Non-Subscriber liability exposure
  • As the legal employer, WorkGenius absorbs all workers' comp obligations and claims administration
Texas Coverage

What WorkGenius Handles for Texas

Texas is business-friendly — but the Non-Subscriber trap and Texas Payday Law carry real risks for the unprepared.

Workers' Compensation Coverage

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 Payday Law Compliance

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.

Unemployment Insurance (SUTA)

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.

Non-Compete Agreements

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.

Benefits Administration

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.

Termination & Final Pay

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.

Texas Compliance Dashboard
3 workers · All compliant
Live
Workers' Comp Coverage Check
Passed
Coverage obtained — Non-Subscriber risk eliminated
Certificate of coverage maintained
Claims administration ready
This Week's Payroll
$7.25
Base/hr
$10.88
OT rate (1.5×)
Auto
Calculated
Weekly invoice sent
Every Friday · All-in rate
Sent
Technology-Powered

How WorkGenius Handles Texas EOR

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.

  • Workers' Comp — Non-Subscriber Risk Eliminated
    WorkGenius subscribes to workers' comp coverage for every Texas employee. You never operate as a Non-Subscriber — eliminating the most significant liability exposure in Texas employment law.
  • Texas Payroll, Automatically
    No state income tax simplifies withholding. SUTA contributions at 2.7% for new employers, semi-monthly pay schedules, and 6-day final paycheck rules — all handled on every pay cycle.
  • Real-Time Compliance Monitoring
    Texas Workforce Commission rules and SUTA rates update annually. Our platform auto-updates — so you're always compliant without tracking legislative changes yourself.
  • One Weekly Invoice
    A single, transparent weekly invoice covering payroll, taxes, benefits, and compliance. No surprises, no hidden fees.

Other Key Texas Compliance Areas

Texas is one of the most employer-friendly states — but several important obligations still apply.

Texas Payday Law

Semi-monthly minimum

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 Unemployment Insurance (SUTA)

New employer: 2.7%

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 Commission on Human Rights Act

15+ employees

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.

At-Will Employment

Strong at-will

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.

Simple Process

How It Works in Texas

From first conversation to fully compliant employment — typically within days.

1

Tell Us What You Need

Workers, roles, locations, and start dates. We tailor the setup to your needs.

2

We Assess & Classify

Our AI runs every worker through California's ABC test. We prepare compliant contracts and payroll setup.

3

Workers Are Employed

Onboarded with California-compliant contracts, benefits enrolled, payroll running from day one.

4

We Handle Ongoing

Payroll runs with daily OT. Taxes filed. Compliance monitored. One weekly invoice.

Texas EOR: Common Questions

Does Texas really not require workers' compensation insurance?

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.

What is the Texas minimum wage?

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.

How does Texas's no state income tax affect payroll?

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.

What are the final pay requirements in Texas?

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.

Are non-compete agreements enforceable in Texas?

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.

Does Texas have any paid leave requirements?

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.

Employer of Record

Ready to Employ in Texas Compliantly?

WorkGenius handles AB5 classification, California payroll, benefits, and every other compliance requirement so you don't have to. Get started today.

No commitment required. Free consultation included.