Texas Employment Law

Guide to
Texas Law

Texas Employment Law

Employment Law

Employment Law

Workers enjoy many rights designed to make the workplace safe and free from illegal discrimination and harassment. This chapter outlines some of the important federal and state laws governing the legal relationships and problems between employers and employees.

The Employment Relationship

The extent of a worker's rights depends upon the legal relationship between the worker and his or her employer.

Independent Contractor Versus Employee

When a worker gets paid to do a task or provide a service for another person, the worker is an independent contractor or an employee. The distinction is important both for the business and the worker, but it is not always clear. For a worker, the classification determines the benefits to which he or she is entitled, whether the worker has access to workers' compensation benefits, and whether the worker is protected by federal and state wage and hour regulations. Employees enjoy substantially more protection in the workplace than do independent contractors.

Whether a worker is an independent contractor or an employee is based on the work performed, not the worker's title. The more control an employer has over a worker, the more likely it is the worker is an employee. On the other hand, the more a worker acts like an independent business enterprise, the more likely the worker is an independent contractor. In some cases, the status is clear: a worker who arrives at a set time every day, is trained by the employer, uses the boss's tools or equipment, and is paid by the hour, week, or month, most likely is an employee. Someone who works for more than one company at a time, sets his or her own hours, and realizes a profit or risks a loss probably is an independent contractor.

A worker or an employer who is unsure about the legal status of the employment relationship should seek advice from the Internal Revenue Service, the Texas Employment Commission, or the Texas Comptroller of Public Accounts.

Employment At Will

The state of Texas recognizes the traditional rule of employment at will. This means that all workers in Texas are presumed to be at-will employees unless the employer has acted to create a different relationship. There are several ways an employer can alter the relationship. An employer might enter into an oral or written contract guaranteeing to employ someone for a specific period of time or promising to terminate the employee only for specified reasons. An employee handbook or collective bargaining agreement can limit the employer's right to terminate employees. Sometimes employers inadvertently limit their right to fire employees if, by their actions, the employers give the employees reason to believe their jobs will continue. For example, if an employer promises a job to someone from out of state and that person moves to Texas specifically to take the job, the employer probably has changed the employment relationship. The employment is not at will because the employee has gone to the trouble and expense of moving after reasonably relying on the promise of new employment.

The implications of the at-will relationship are far-reaching. Unless there is an agreement to the contrary, an employer may discharge an employee at any time for any legal reason. As long as an employee is not fired for an illegal reason--such as racial or gender discrimination--an employer does not need a good reason to fire someone. Even a silly reason is enough. It also means that an employee may resign at any time, for any reason, with or without giving notice. The employee is free to leave for any reason at all, even if by doing so he or she greatly inconveniences the employer.

Government Administered Benefits

Three programs administered by the state and federal governments are of special interest to workers: Unemployment Compensation, Workers' Compensation, and Social Security. The benefits a worker enjoys under any of these programs depends upon the terms and conditions of employment.

Unemployment Compensation

Unemployment compensation provides benefits to employees who are laid off, fired, or forced to leave their jobs. Most employees are covered by unemployment insurance, a program administered by the state and funded by employer contributions.

Application

Unemployment benefits are not automatic; the worker must apply for them from the Texas Employment Commission (TEC). A claim for unemployment benefits should be made at a TEC office within two weeks of the termination and during each subsequent two-week period. After gathering information about an applicant, the TEC makes an initial determination as to whether the person is eligible for benefits. If the employee is eligible, the TEC informs the former employer. Because the former employer pays the benefits, the employer has the right to some of the information given by the former employee to the TEC and has an opportunity to present information.

Eligibility

To be eligible to receive unemployment benefits, the employee must have worked for the employer for a certain length of time and must have made a certain amount of money in wages. The time period is called a base period, and it is based on the calendar quarter system. Eligible employees must have made a minimum amount of money during the most recent prior benefit year. To collect unemployment benefits, a person also must make a reasonable effort to find work during the period of unemployment.

Not everyone who leaves a job is eligible to receive unemployment benefits. An applicant may not receive benefits if the applicant:

Is an independent contractor or a commission-only salesperson

Is a student hired by the educational institution in which he or she is enrolled

Is fired for misconduct

Quits for any reason other than an illegal or intolerable work environment

Participates in a labor strike

Refuses an offer to work again for the former employer

Fails to seek, apply for, or accept suitable work

Because employers and employees often have different ideas of what constitutes a reasonable work environment, the issue in most disputed unemployment claims is whether the employer created an intolerable workplace environment. Only certain kinds of employer actions give someone a legitimate reason to quit a job and still collect unemployment benefits. Some of these valid reasons include:

Sexual harassment by an employer or inaction by an employer who was informed of instances of sexual harassment

A substantial cut in pay or benefits

Drastic changes in working conditions or hours without an employee's consent

Requiring an employee to break the law or work under obviously unsafe conditions

Demotions, modest decreases in wages or benefits, disagreements over management policy, and reasonable changes in workplace hours or employee regulations are conditions of employment that do not create an intolerable working environment for purposes of eligibility to collect unemployment benefits.

Benefits

If the TEC decides that an applicant is eligible to receive benefits, the former employee receives a weekly benefit of a percentage of his or her previous average weekly salary. The benefit cannot exceed a maximum ceiling amount, which usually equals half of the worker's base period wages. Benefits are paid for up to 26 weeks or until an applicant has received the maximum amount allowed, whichever is sooner. As long as the recipient continues to look for permanent work, working a part-time or temporary job will not terminate unemployment benefits. The recipient keeps a portion of his or her weekly income, and the benefits are reduced by any income in excess of a designated amount.

Workers' Compensation

Workers' compensation provides benefits to employees injured in the workplace, regardless of how the injury happened. Many Texas employees are covered by workers' compensation, which is administered by the Texas Workers' Compensation Commission (TWCC). However, Texas is one of a few states in which employers are not required to be self-insured or covered by workers' compensation insurance for employees' job-related injuries. Injured employees whose employers are not covered may resort to litigation to recover damages for workplace injuries.

For workers whose employers are covered by workers' compensation insurance, the benefits available include death benefits, permanent or temporary total disability, permanent or temporary partial disability, and medical and related expenses. The benefit amount is determined by state guidelines. The maximum weekly benefit depends on the level of injury, but ranges from 70 to 100 percent of the annual average of weekly average wages as determined by the Texas Employment Commission.

Workers' compensation is discussed further in the Workers' Compensation Law Chapter.

Social Security

Social Security provides benefits for retired workers. A worker gains Social Security coverage by performing "covered employment," which includes full- or part-time wage or salary work; self-employment; farm work; service in the United States Armed Services; work in private nonprofit organizations; most domestic work; and most federal, state, and local government work. The covered employment must be for a certain amount of time each quarter of the year.

The usual age to begin receiving Social Security benefits is 65; however, a worker has the option of initiating benefits at age 62. The amount of each monthly check depends on how much the worker made each year. The higher his or her pay, the higher the benefits, up to a maximum dollar amount.

Social Security is discussed in greater detail in the Social Security Law Chapter.

Civil Rights in the Workplace

Four major federal laws--the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, and the Americans with Disabilities Act of 1990--protect the rights of workers to be free from workplace discrimination in the United States. While Texas laws also prohibit workplace discrimination, they provide no more protection than the federal laws. This section, therefore, describes only the federal civil rights laws that are of interest to Texas workers.

In General

Most employment discrimination is outlawed by the two major civil rights acts passed by Congress in 1964 and 1991. Under these laws, workers are protected against discrimination based on color, disability, national origin, race, religion, or sex. Additional laws protect workers specifically from discrimination based on age or disability.

People frequently refer to "Title VII" rights when they are talking about a particular section of the Civil Rights Act of 1964. Title VII prohibits discrimination in a wide variety of employment areas, including advertisements for jobs, apprenticeship programs, benefits, firing, hiring, layoffs, promotions, recalls, recruitment, testing, training and transfers. Title VII also prohibits retaliation against a person who files a charge of discrimination, participates in an investigation of discrimination, or opposes an unlawful employment practice.

Under certain extremely limited circumstances, an employer may base employment decisions or practices on a person's race, sex, etc., if the employer is able to demonstrate a truly legitimate need. For example, it is legal to hire only women to be attendants in women's locker rooms. Religious institutions may refuse to hire individuals based on their religious beliefs, but only for positions that are directly related to the performance of religious duties; generally they are not allowed to discriminate when hiring individuals for secular tasks, such as secretarial or janitorial work.

Certain employers, such as police departments, may base some employment decisions on an applicant's physical abilities. Other types of hiring criteria are allowed if they measure skills that are truly essential for an applicant to have in order to perform a particular job, and if they are not applied in a selective or discriminatory way. For example, an employer may require applicants for administrative jobs to pass typing or computer skills examinations.

Proving discrimination in the workplace depends on the specifics of each situation. Generally, it is easier to prove discrimination from a repeated pattern of behavior rather than an isolated incident. For example, if several people who are all Mexican immigrants are passed over for promotions in favor of non-immigrants, and all of the people involved have the same qualifications, a good case may be made for unlawful discrimination. In addition, any documented evidence showing an employer is prejudiced against a class of people will strengthen a discrimination case. If an employer makes statements such as "women are not capable of making tough management decisions," this will increase the chances of proving discrimination, especially if the statements are made repeatedly and in the presence of witnesses.

Courts apply a test created by the United States Supreme Court to determine whether there has been discrimination in the workplace. The employee must show:

He or she is a member of a protected class of people

The employee or applicant was qualified for the job from which he or she was fired or for which he or she was not hired

The termination or rejection happened even though the employee or applicant was qualified

The position was filled by a person who is not a member of the protected class

A person who feels that he or she has been unfairly discriminated against or harassed in the workplace should file a complaint with the Texas Commission on Human Rights or the federal Equal Employment Opportunity Commission (EEOC). The Texas Commission on Human Rights enforces the federal civil rights acts that apply to the workplace in cases deferred by the EEOC. A complaint must be filed within 180 days of the discriminatory act. If the Commission believes the civil rights laws have been violated, it will file a complaint in a state court on behalf of the worker. The worker may file a civil action in court even if the Commission does not believe the employer has engaged in illegal acts.

Age Discrimination

The Age Discrimination in Employment Act (ADEA) expands Title VII prohibitions against age discrimination. Most employers may not enforce mandatory retirement policies, except under a few very specific circumstances in which age is a valid qualification for doing a particular job, such as firefighting, police work, or flying airplanes. Under these circumstances, it is reasonable to assume that people over a certain age no longer have qualifications to do the job. Anyone age 40 or over who works for an employer with 20 or more employees is protected by the ADEA and may not be retired against his or her will, regardless of age, as long as he or she can do the job. Other federal and state laws that prevent discrimination based on age contain some exceptions allowing employers to force an employee age 70 or older to retire.

Discrimination Against Persons with Disabilities

The Americans with Disabilities Act of 1990 (ADA) is a federal law that prohibits discrimination based on a person's physical or mental ability. The ADA makes it illegal to fire or to refuse to hire someone because that person lacks physical or mental abilities that are not essential to the job; the ADA does not change an employer's right to employ only people who have the skills to perform the "essential duties" of a job. For example, an employer may not refuse to hire as a daycare provider a person with epilepsy simply because the employer thinks the employee should be able to drive to a hospital in an emergency, if driving is not an essential duty of the job. If it is not an essential duty, it is not a valid reason to discriminate against the epileptic applicant who is prevented from having a driver's license by his or her epilepsy.

The ADA requires employers to make "reasonable accommodations" for applicants or employees with disabilities. The employer must do whatever is reasonable to accommodate a person's disability, including modifying work schedules, providing special training, changing the work environment, buying or modifying special equipment, or reassigning to another position an employee who can no longer do the "essential duties" of a job. A reasonable accommodation is one that does not place an undue burden on the employer. Using pre-employment tests that identify and exclude applicants with disabilities is permissible only if the tests are unequivocally job-related.

The ADA only protects from discrimination people with permanent conditions that limit a major life activity. Thus, the ADA does not cover an employee who has a sprained ankle that is expected to heal fully, even though that employee is disabled for a period of time. A person with a permanent disabling condition that is controlled by drugs, physical therapy, or by some other treatment is covered by the ADA, such as an epileptic whose seizures are controlled by medication. The ADA also prohibits discriminating against individuals with AIDS or HIV, or people who have completed or are still participating in drug rehabilitation programs. However, an applicant or employee currently using illegal drugs is not protected by the ADA.

The ADA is administered by the EEOC. Since 1983, discrimination against persons with disabilities has been prohibited by the Texas Commission on Human Rights Act. The Texas Commission on Human Rights enforces Texas law and handles federal complaints deferred by the EEOC.

Sexual Harassment

Everyone has the right to be free from sexual harassment in the workplace. Sexual harassment is punishable as an illegal form of sex discrimination under Title VII of the Civil Rights Act of 1964. Sexual harassment can take many forms:

Sexual or sexist comments about a coworker's appearance

A mandatory dress code that provokes others to make sexually explicit comments

Unwanted sexual contact or touching

Sexual suggestions or pressure to have sexual contact

Sexual jokes or explicit sexual comments that embarrass a coworker

Sexual or pornographic pictures displayed or passed around the workplace

Sexual harassment is illegal if participation in any of the above activities is required to get or keep a job, to be promoted, or to qualify for benefits, or if it makes it harder for a worker to do his or her job by creating a hostile environment. The law requires that the behavior be unwelcome, undesirable, and offensive to be considered sexual harassment. The law uses the "reasonable person" standard to determine what is offensive: if a reasonable person would find an action offensive, then it is offensive under the law.

Determining what kind of behavior constitutes sexual harassment may depend on the circumstances. However, some general descriptions of sexual harassment can be made. A single, or occasional, sexual joke or sexual comment is not sexual harassment unless the comment unequivocally offers workplace advancement in return for sexual favors. Unwanted touching of someone else's body is sexual harassment. Someone who repeatedly tells lewd or obscene jokes that make other employees uncomfortable may be committing sexual harassment, especially if the person has been told that he or she makes the workplace uncomfortable. A case for sexual harassment in this example would be weakened if the person claiming harassment participated in the joke-telling.

In addition to laws designed to give victims a civil remedy against sexual harassment, criminal laws provide remedies against the most serious forms of unwanted sexual contact.

People who believe they are victims of sexual harassment should contact the federal EEOC or the Texas Commission on Human Rights. Anyone fired or forced to leave a job because of sexual harassment may be entitled to receive unemployment insurance benefits while searching for a new job.

If a harasser's behavior crosses the line into assault or rape, the victim may file criminal charges against the perpetrator. These crimes are discussed in the Criminal Law: Felonies & White Collar Crime Chapter.

Pregnancy Discrimination

Title VII protects pregnant workers and job applicants from discrimination. Employers may not refuse to hire a woman because she is pregnant, fire a woman because she is pregnant, take away benefits or accrued seniority because a woman takes maternity leave, take away benefits from a single woman who has a baby, or fire or refuse to hire a woman who has an abortion.

Generally, an employer must treat pregnant women the same as other workers who cannot perform their jobs for short periods of time. Thus, if an employer allows employees to take a leave for a broken leg or short-term illness, the employer must allow pregnant women to take a leave under the same terms and conditions. Employers also are required to transfer a pregnant employee to a less hazardous or strenuous job during the pregnancy, if the employer makes such provisions for other workers with temporary disabilities. Pregnancy leave also is protected under the Family and Medical Leave Act (discussed below).

Other Workplace Rights And Responsibilities

Wages and Hours

The federal minimum wage for adult workers age 18 and over is $4.25 per hour. Employees must be paid at least the minimum wage, even those who earn tips, and employees may not be forced to share their tips with other workers or managers, although employees may do so voluntarily. Workers under 18 years of age must be paid a minimum wage of $3.75 per hour. Generally, employers also must pay hourly employees one-and-a-half times their regular rate for every hour over 40 hours worked in a week.

There are some exceptions to the minimum wage law. For example, certain salaried workers are exempt from minimum wage standards and overtime regulations. To be exempt, an employee must be in an executive, administrative, or professional position and receive at least $250 each week in salary or fee. The employee must supervise at least two other workers, manage an office or a business operation, be a skilled artistic performer or a teacher, or work in a profession requiring advanced knowledge, such as engineering.

Employment laws also regulate child labor. For example, in Texas no child under the age of 14 is allowed to work, unless the child is specifically exempted by the Texas Employment Commission. Some exempted fields of labor include performing in a radio, television, or theatrical production, delivering newspapers, agricultural work, work as part of a rehabilitation program, or other casual, nonhazardous employment under parental supervision. Even when it is permitted, children who are 14 or 15 years of age may work only eight hours each day and no more than 48 hours each week. In addition, children may work only certain hours during the school year. Employing a minor in violation of these laws is a Class B misdemeanor.

Substance Abuse in the Workplace

Under certain circumstances, employers in Texas may compel employees to pass drug and alcohol tests as a condition of employment. Federal law governs and allows workplace testing for the use of alcohol and the illegal use of drugs in the defense, nuclear, and transportation industries. In addition, Texas law governs some aspects of drug testing in the workplace. Employers who have 15 or more employees and who have workers' compensation insurance must have some kind of policy to eliminate drug abuse in the workplace. It is a criminal misdemeanor for a person to interfere intentionally with drug test results. Some Texas cities--such as Houston--also have ordinances that regulate an employer's testing for use of substances. Houston's law allows testing for substances in various safety-impact positions, as well as in pre-employment, post-accident, and for-cause situations. The law is quite punitive: employees who test positive for drug use in the workplace even once may be fired.

An employer may test an employee for use of drugs and alcohol only if the test is part of a reasonable policy that seeks to prohibit the use of alcohol or illegal drugs in the workplace. Substance abuse tests must not be given in a discriminatory way, and if passing a drug or alcohol test is a job requirement, then all employees performing that job must be subject to the testing requirement. For example, a reasonable policy may include testing of all employees in safety-sensitive positions. An employer may test for drug and alcohol use when an employee unmistakably violates workplace rules on drugs or alcohol while operating an employer's machinery, equipment, or vehicle.

Employees are guaranteed privacy in matters of substance abuse and rehabilitation. In addition to general principles of confidentiality and privilege that are applicable to Employee Assistance Programs, some Texas agencies have rules that govern privacy issues for employees who participate in rehabilitation. Although current users of drugs or alcohol do not have protection from the consequences of their actions in the workplace, private employers of 25 or more employees are required to accommodate an employee who wishes to voluntarily participate in alcohol or drug rehabilitation. These employees are treated as persons with disabilities. There are some limits to these guarantees, however. The accommodation of an employee who is participating in rehabilitation may not impose an undue hardship on the employer. And, as mentioned, an employer is not required to hire or retain someone who is unable to perform a task or who endangers others because of current alcohol or drug use.

Parenting, Family, and Medical Leave

The federal government requires certain employers to provide parenting, family, and medical leave to qualified employees. The federal Family and Medical Leave Act of 1993 (FMLA) allows qualified employees to take up to 12 weeks of unpaid leave to attend to family matters, including health emergencies. Under the Act, a qualified employee may take an unpaid leave following the birth or adoption of a child, after acquiring a foster child, to care for an immediate family member with a serious health condition, or to care for his or her own serious health condition.

Men and women are equally entitled to this leave, but not every worker is qualified. A person must be a full-time government employee, or an employee of a company with 50 or more employees who has worked for the company at least 12 months and at least 1250 hours during the 12 months immediately prior to taking the leave.

Under most circumstances, an employee may elect or the employer may require the use of any accrued paid leave for periods of unpaid leave under the FMLA. When the leave is foreseeable, an employee must provide the employer with at least 30 days' notice of the need for the leave. If the leave is not foreseeable, the notice must be given as soon as it is practical. An employer may require medical certification of a serious health condition from the employee and may require periodic reports of the employee's status and intent to return to work during the leave. In addition, in appropriate situations an employer may require a fitness-for-duty certification upon return to work.

The employee is not entitled to accrue benefits such as vacation time or sick leave during a leave under the FMLA. Any benefits accrued by the employee at the time of the leave, however, stay with the employee. During the leave, the employer must maintain the health benefits the employee was receiving at the time the leave began, at the same level and in the same manner as if the employee had continued to work.

When an employee returns from a leave under the FMLA, the employee is entitled to be restored to the same job the employee left when the leave began. If the same job is not available, the employer must place the employee in an equivalent job with equivalent pay, benefits, duties, and responsibilities. Under the Act, employers are prohibited from discriminating against or interfering with employees who take FMLA leaves.

Privacy

An employee's right to privacy at work is a hotly debated issue today as increasing numbers of employers are using searches, surveillance, and eavesdropping in an attempt to better monitor their employees' activities better. The law in this area is evolving and is largely unsettled, but it is fair to say that an employee surrenders some of his or her right to privacy at the workplace door. Employers have more of a legal right to monitor employees than governments have to monitor citizens.

When a court must determine whether an employee's right to privacy has been violated, it looks to whether the employee's expectation of privacy in a particular situation was reasonable. For example, the expectation of privacy is more reasonable for items in a locked desk drawer than for items left out on a desk. Similarly, it is more reasonable to expect privacy during a personal phone call made on a pay phone than for a work-related call on the employer's phone.

The reasonable expectation standard is not a very strong guarantee of employee privacy. An employer expands his or her right to search or monitor simply by giving notice to employees. Once an employee receives notice that the employer reserves the right to monitor calls, search offices, read electronic mail, or film the workplace, there is very little reasonable expectation of privacy.

Whistleblowing

It is illegal for an employer to fire a worker in retaliation for reporting a violation of a law or for refusing to participate in an activity the employee believes to be illegal. If an employee acts in good faith and reports suspected illegal activities to the employer, a governmental agency, or a law enforcement officer, the employee may not be fired or be treated adversely. This workplace right is guaranteed as part of general labor law and in Texas also is covered by statute. Employers are prohibited from retaliating against employees who report workplace safety violations. An employee whose job is terminated or suspended for whistleblowing is entitled to judicial relief in the form of reinstatement, compensation for lost wages, and reinstatement of benefits and seniority rights, as well as attorney fees and court costs.

Resources

More information is available in a book by Robert Coulson, entitled Empowered at Forty: How to Negotiate the Best Terms and Time of Your Retirement (HarperBusiness, New York, NY 1990).

For questions about employment status, contact the Texas Comptroller of Public Accounts, 111 17th Street East, Austin, TX 78711, (512) 463-4000, and/or the Internal Revenue Service, 1111 Constitution Avenue N.W., Washington, DC 20224, (800) 829-3676.

Additional information also is available from the National Organization on Disability (NOD), 910 Sixteenth Street N.W. #600, Washington, DC 20006, (202) 293-5960, (202) 293-5968 (TDD).

For information, to file a charge of discrimination, or to order free publications, including Equal Employment Opportunity Law: Texas Commission on Human Rights and The Law and Employment Discrimination Against Persons with Disabilities: Texas Commission on Human Rights, contact the Texas Commission on Human Rights, P.O. Box 13493, Austin, TX 78711, (512) 437-3450, TDD (800) 735-2989.

For job listings, information, or to order Important Information for Workers About Unemployment Compensation or Independent Contractors/Contract Labor, free publications, contact the Texas Employment Commission (TEC), 101 15th Street East, Austin, TX 78778, (512) 463-2800. TEC information also is available through Telnet (hi-tec.tec.state.tx.us).

For information, including information on wages, hours and overtime, contact the United States Department of Labor, Wage and Hour Division, Employment Standards Administration, Federal Building #800, 525 Griffin Street South, Dallas, TX 75202, (214) 767-6895. For information or to order free pamphlets, including Compliance Guide to the Family and Medical Leave Act (June 1993) and Handy Reference Guide to the Fair Labor Standards Act (Oct. 1994), call Headquarters, (202) 219-8743, TDD (800) 326-2577.

The United States Department of Labor, Women's Bureau Region VI, Federal Building #735, 525 Griffin Street South, Dallas, TX 75202, (214) 767-6985, publishes free pamphlets, including Family & Medical Leave: Know Your Rights; Pregnancy Discrimination: Know Your Rights; and Sexual Harassment: Know Your Rights.

For information or to file a charge of discrimination, contact the United States Equal Employment Opportunity Commission, Dallas District Office, 207 Houston Street South, Third Floor, Dallas, TX 75202, (214) 655-3300; Houston District Office, 1919 Smith Street Seventh Floor, Houston, TX 77002, (713) 209-3373. The Region VI Disability and Business Technical Assistance Center, (713) 520-0232, TDD (713) 520-5136, has information about the ADA and booklets including The Americans with Disabilities Act: Questions and Answers and Your Employment Rights as an Individual With a Disability. The EEOC's Washington Office, 1801 L Street N.W., Washington, DC 20507, (202) 663-4900, TDD (800) 872-3302, also may be contacted for information and booklets.