Hiring employees in Texas: the 2026 compliance checklist for employers and recruiters

As of October 2026, an employer hiring in Texas has to register with the Texas Workforce Commission (TWC) within ten days of becoming liable for state unemployment tax, decide whether to carry workers' compensation and tell each new hire at the time of hire which choice it made, collect the federal W-4 and Form I-9, and report the hire to the Attorney General's Child Support Division within 20 calendar days. Texas has no state income tax, so there is no state withholding form, and no statewide ban-the-box law for private employers. Its AI law, TRAIGA, has barred intentionally discriminatory AI since January 1, 2026, and E-Verify is required only of state agencies and certain state contractors.

This page is the Texas hub: one table with every item and its official source, then a short section on each. Where we already have a full guide to an item, the section summarizes it and links there.

The Texas hiring checklist at a glance

What must be in place before the first Texas hire?

A TWC unemployment tax account. The TWC says an employer becomes liable if it "pays $1,500 or more in total gross wages in a calendar quarter" or "has at least one employee during twenty different weeks in a calendar year," among other tests, and must register "within ten days of becoming liable." For 2026 the TWC lists the new-employer rate as 2.7 percent or the industry average, whichever is higher.

Then a decision on workers' compensation. Labor Code § 406.002 makes coverage elective "except for public employers and as otherwise provided by law," but § 406.004 requires an employer that goes without it to notify the Division of Workers' Compensation in writing. The federal layer (an EIN, Form W-4 and Form I-9 by the third business day) applies on top.

Does a staffing or recruiting agency need a Texas license?

No general license. Occupations Code Chapter 2501 regulates personnel services without licensing them: § 2501.102 bars imposing a fee on an applicant until the applicant has accepted an offer resulting from the referral. Talent agencies, nurse staffing and day labor sit on separate tracks. Our guide to the Texas staffing agency rules covers the exemptions and fee limits.

What must a Texas job posting include, and can you ask about pay history?

We found no Texas statute that requires pay ranges in job postings or bars salary history questions for private employers, and Texas does not appear in our trackers of pay transparency laws by state or salary history ban states. The TWC's guidebook says Labor Code § 1.005 "essentially nullified" local ban-the-box ordinances from September 1, 2023, a sign that city hiring rules are unlikely to fill the gap. A Texas posting for a remote role open to candidates in Colorado, California, New York or Illinois can still pick up those states' posting rules.

When can you ask about criminal history or run a credit check?

Texas has no statewide ban-the-box law for private employers. The TWC's guidebook says "Texas has no such statute" and that local ordinances such as Austin's were essentially nullified by Labor Code § 1.005 effective September 1, 2023. Texas also limits negligent hiring suits: Civil Practice and Remedies Code § 142.002 bars a claim based solely on an employee's conviction, except for convictions tied to similar duties, listed serious offenses and sexually violent offenses the employer knew or should have known about. Federal rules still apply: the EEOC's individualized-assessment guidance, which the TWC recommends, and the FCRA background check process.

For credit reports, the TWC points to the federal Fair Credit Reporting Act's written notice and authorization when an outside agency runs the check. We found no Texas statute limiting employment credit checks; see our credit check laws guide for the states that have one.

Can you record or transcribe a job interview in Texas?

Yes, as a participant. Texas is a one-party consent state: Penal Code § 16.02(c)(4) gives a defense to a person who is a party to the communication, unless the purpose is an unlawful act. Unlawful interception is a second-degree felony, and Civil Practice and Remedies Code Chapter 123 sets damages at $10,000 per occurrence. When the candidate is in an all-party state, that state's rule may govern. See Texas recording consent law for interviews and recording calls across state lines.

Does Texas regulate AI in hiring?

Yes, narrowly. The Texas Responsible Artificial Intelligence Governance Act, House Bill 149, took effect January 1, 2026. It prohibits developing or deploying an AI system with the intent to unlawfully discriminate against a protected class. It does not require private employers to disclose AI use to candidates or run bias audits, and only the Attorney General enforces it. Our page on the Texas AI hiring law covers the cure period and the biometric law next to it.

Can you drug test applicants in Texas?

Generally yes. The TWC's guidebook says that "under Texas and federal laws, there is almost no limitation at all on the right of private employers to adopt drug and alcohol testing policies," and that pre-employment testing is not a medical examination under the ADA, so it may happen at any point in selection. Federally regulated jobs, such as DOT safety-sensitive roles, follow federal testing rules. Our drug testing laws guide compares states that restrict testing.

Does Texas require E-Verify?

Not for private employers generally. Government Code § 673.002 requires each state agency to "register and participate in the E-verify program to verify information of all new employees," and contractors on certain state contracts, including TxDOT highway work, must use it too. Details are in E-Verify requirements in Texas.

Which state withholding form does a new hire complete?

None. Texas has no personal income tax, and Article 8, § 24-a of the Texas Constitution provides that the Legislature "may not impose a tax on the net incomes of individuals." The TWC's new hire paperwork list names the federal W-4 and Form I-9 as the required tax and eligibility forms. Employees who live in another state may still owe that state's income tax, so check where a remote hire actually works.

Which notices must a new Texas employee get at hire?

• Workers' compensation coverage notice. Labor Code § 406.005(b) says the employer "shall notify a new employee of the existence or absence of workers' compensation insurance coverage at the time the employee is hired." Failing to do so is an administrative violation. The TWC links the coverage and non-coverage notices in English, Spanish and Vietnamese from its new hire paperwork page.
• Federal notices. The same TWC page lists the U.S. Department of Labor's Health Insurance Marketplace notice as required, alongside the W-4 and I-9.
• Background check consent. If an outside agency runs a check, the FCRA requires the stand-alone disclosure and written authorization, ideally before the hiring decision.

How do you report a new hire in Texas?

The Attorney General's Child Support Division runs the Texas new hire directory, and its new hire page says employers must "report new hires and rehires within 20 calendar days from the date the employee starts earning wages." The Texas Employer New Hire Reporting Form requires the FEIN, employer name and address, and the employee's Social Security number, date of hire, name and home address; the date of hire is "the first day that services are performed for wages." Report online through the OAG employer portal, by upload, or by mail or fax. Family Code § 234.105 caps penalties at $25 per unreported employee, or $500 for a conspiracy not to report, and § 234.101's definition of employee also takes in "an independent contractor as defined by the Internal Revenue Service."

The Texas hiring steps in order

1. Before the first hire: open the TWC account within ten days of becoming liable, and decide on workers' compensation (filing the non-coverage notice with the Division if you opt out). Agencies check Chapter 2501's fee rules.
2. Posting: no Texas pay range rule, but check the rules of any other state where candidates for a remote role live.
3. Screening: criminal history questions are legal under state law; follow EEOC guidance and the FCRA if you run checks.
4. Interview: a participant may record, but get consent when the candidate is in an all-party state, and keep AI tools free of discriminatory intent.
5. Offer: drug test if your policy calls for it; state agencies and covered state contractors run E-Verify after the I-9.
6. First day: Form I-9, W-4, the workers' compensation coverage notice and the federal Marketplace notice.
7. Within 20 days of the first day of paid work: report the hire to the Attorney General.

Hiring in more than one state? The same checklist is available for California, Florida, New York, Pennsylvania, Illinois and Ohio.