As a business, you must ensure that your operations comply with the latest regulations and laws regarding labor and your business. Staying updated will help you avoid potential penalties for breaking laws and protect your reputation as an organization.
Businesses operating in Texas will want to update their policies for 2025 in accordance with the state's changes. Texas’s growing economy highlights the importance of protecting your company as you work to maintain and grow your market share.
As we enter the New Year, let’s examine some of the significant changes that Texas businesses should note.
Major Changes in Texas Labor Laws for 2025
Texas labor laws have made notable changes to areas such as:
- The use of DEI Offices
- Overtime laws
- Discrimination
Some of these regulations will specifically impact certain sectors of industry. For example, the use of DEI offices has only been expressly forbidden in the areas of higher education. The disputes in the state about overtime regulations, however, will impact a variety of industries where employees can potentially accrue overtime. We will look at each of these new changes in greater detail below.
Key Areas Affected by the 2025 Texas Employment Law Changes
Let's look at some critical areas where 2025 employment law updates have led to some local regulation changes.
- Minimum Wage: Texas has not enacted a statewide increase to the minimum wage, which remains aligned with the federal minimum. However, notable exceptions exist in cities like Austin and Houston, where local initiatives have led to wage adjustments. Specifically, Houston has implemented an increase in minimum wage exclusively for municipal workers. This adjustment sets the minimum wage for city employees at $15 per hour, a move aimed at enhancing economic stability among public sector workers.
- Discrimination: Employers in higher learning can no longer use factors such as race, gender, or national origin when considering employees or student admissions.
- Workplace Violence: Employers in Texas must now make sure a workplace poster advertising the state workplace violence hotline is prominently displayed in the workplace.
- Overtime Rules: Overtime rules have seen regular shifts in Texas, but going into 2025, employers should know that a judge recently overturned the new overtime rule. The original law had raised the minimum salary that would have triggered the overtime exemption rule of the Fair Labor Standards Act. However,a judge struck down this ruling and it hasn’t yet been fully resolved.
- DEI: Texas has ruled that institutes of higher learning in the state, like the University of Texas, can no longer have DEI departments or other professionals who focus on these types of tasks.
In response to these changes, employers will want to review their internal policies to make sure they are fully compliant or taking steps to become compliant with these regulations. Some of the biggest changes will be for higher education, which now needs to operate without DEI departments and cannot use DEI standards in hiring.
All employees will want to ensure that their wages meet local standards. As we move through 2025, stay on top of the developments in the overtime rules, as this directly impacts how employees are paid.
Preparing Your Business for the Changes
As we head into the New Year, prepare your entire organization for these adjustments to make sure everyone is on the same page. Preparing properly for new regulations and introducing them to your entire company helps to reduce confusion so that everyone knows what is expected from them, and they know what to expect from their benefits.
- Work with your HR team to make sure your official policies fully align with the new laws and regulations. If salaries need to be raised or the responsibilities of certain positions shifted to better align with state regulations, prepare for ways to make these shifts.
- Make sure you update all your HR signage and employee information sources. Go through all the different places where you outline employee policies and make sure your information has been correctly updated.
- Schedule any necessary training. If your new policies require new policies or shifts in workflows, prepare training so that you can review the information with those impacts and keep the information clear.
- Prepare all your communication with plenty of warning and information. Notify all your employees about changes your company will make. Reread your communication so you know it provides all the information accurately and clearly for people to easily digest.
Resources and Assistance for Texas Employers
Business laws and regulations change regularly. Every year, judges and lawmakers look at the laws on the books and determine if adjustments need to be made. As a business owner, you need to monitor these changes so you can make any necessary changes.
Fortunately, tools and support are available for Texas business owners. Working with dedicated HR services providers, like Affiliated HR & Payroll, can help companies like yours stay on top of the latest developments in business regulations. With HR tools that help manage and onboard employees, track relevant information, and update according to the latest rules, HR professionals can help your business remain fully compliant with state and federal regulations.
Conclusion: Texas Labor Law Updates 2025
As we move into 2025, businesses in Texas need to make sure their businesses are ready to comply with all the latest shifts in business and labor regulations. This New Year has introduced new laws and legal updates surrounding issues such as wage laws, overtime, and discrimination.
Therefore, many companies will have a lot of work to do updating their policies and workflows. However, engaging proactively with these changes can help you make any necessary updates carefully and thoughtfully instead of rushing to comply with an approaching deadline.
Rather than trying to follow these changes and determine the best way to respond individually, we recommend businesses work with specialized HR professionals to receive personalized information and guidance about the best ways to approach coming regulatory changes and knowing what shifts will precisely impact their business.
Ensure your compliance with 2025 Texas labor laws! Schedule a consultation with our HR experts today!