Growing past 4, 15 and 20 employees in Texas: the hiring rules that switch on

The thresholds that matter at your size

A growing Texas company picks up obligations in steps. Some rules apply from the very first employee, including new hire reporting and federal wage and safety laws. The federal and Texas anti-discrimination laws that govern most hiring practices generally apply once you have 15 or more employees, age discrimination rules at 20, and family and medical leave at 50. Knowing which step you are on, and which one is coming, keeps your hiring process ahead of the law instead of behind it.

I am a recruiter and culture consultant, not a lawyer. At Wayne Human Capital in Dallas I work with companies of ten to one hundred employees, which is exactly the range where several of these thresholds are crossed, often without the owner noticing. What follows is general information drawn from federal and Texas agency guidance, to help you know what questions to ask. For advice on your own situation, talk to a licensed employment attorney.

Rules that apply from the very first employee

The Texas Workforce Commission's guide to coverage thresholds lists a number of laws that apply once you have even one employee. These are the basics every employer needs in place before the first paycheck, and they do not wait for you to grow.

The sexual harassment item surprises many owners. Texas law generally covers employers with 15 or more employees for discrimination claims, but the TWC guide notes that the sexual harassment provision applies to an employer with one or more employees. Being small does not mean being exempt from everything.

• Federal wage and hour law (the Fair Labor Standards Act) and workplace safety law (OSHA).
• Federal and Texas new hire reporting.
• The Texas Payday Law for private employers.
• Texas Labor Code protections against sexual harassment, which apply at one or more employees.
• Federal and Texas unemployment tax obligations for for-profit employers.
• The federal Civil Rights Act of 1866, which the TWC lists with no minimum headcount.

At four employees and at fifteen

According to the TWC guide, the anti-discrimination provisions of the federal Immigration Reform and Control Act, which protect against discrimination based on national origin or citizenship status, cover employers with four or more employees. This is a reminder to treat every candidate's work-authorization documents the same way.

Fifteen is the big one. The TWC guide lists Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Genetic Information Nondiscrimination Act and the employment discrimination provisions of the Texas Labor Code at 15 or more employees for each working day in twenty or more calendar weeks in the current or preceding year. Together they cover discrimination based on race, color, religion, sex, national origin, disability and genetic information. The U.S. Equal Employment Opportunity Commission explains that part-time, seasonal and temporary employees are counted when determining coverage, so a company with a mix of full-time and part-time staff may cross the line sooner than expected.

Practically, this is the point where your hiring process needs to be consistent and documented: the same job-related criteria for every candidate, the same interview questions, and any assessment given the same way to everyone at the same stage. The EEOC also notes that an employer too small for the federal laws may still be covered by state or local law, so do not treat fourteen employees as a free pass.

At twenty, fifty and one hundred

The next steps arrive as the company keeps growing. The TWC guide lists the federal Age Discrimination in Employment Act at 20 or more employees, on the same twenty-week test, and federal COBRA health continuation for employers that normally have 20 or more. It also notes a Texas continuation law for small employers with an average of two to 50 employees.

Further out, the TWC lists the Family and Medical Leave Act at 50 employees, and both the WARN Act on mass layoffs and the federal EEO-1 workforce report at 100 for private employers. Most of my clients are below those lines, but owners planning rapid growth should know where they sit.

• 20 employees: federal age discrimination law and federal COBRA.
• 2 to 50 employees: Texas health coverage continuation for small employers.
• 50 employees: the Family and Medical Leave Act.
• 100 employees: the WARN Act and the EEO-1 report for private employers.

The paperwork every new hire needs in week one

Whatever your size, two deadlines start the moment someone is hired. U.S. Citizenship and Immigration Services says the employer must complete Section 2 of Form I-9 within three business days of the date of hire, defined as the first day of work for pay. The Texas Workforce Commission says new hires and rehires must be reported to the Child Support Division of the Office of the Attorney General within 20 calendar days of the hire date.

USCIS also notes that Section 2 can be completed earlier, after the person has accepted the offer but before they start, using the expected start date, which is a simple way to keep it off the crowded first day. Treat both deadlines as part of the offer process rather than an afterthought, and keep a record of when each was done for every hire.

Both are easy to miss when a company is hiring quickly and nobody owns onboarding. Assign one person to each deadline and build them into your offer checklist. My guide on keeping a new hire through the first 90 days covers the rest of that first stretch.

Where your hiring process meets these laws

Most hiring risk does not come from bad intentions. It comes from inconsistency. One candidate gets a casual coffee conversation, another gets a panel interview, a third is asked questions nobody else was asked. When a company crosses 15 employees, that informality becomes a liability as well as a source of poor decisions. It also makes it harder to explain later why one person was chosen over another.

The good news is that the habits that reduce legal risk are the same ones that produce better hires. A written role profile, structured interview questions, job-related criteria and assessments used the same way for everyone all make your decisions more accurate and easier to explain. If you use or are considering personality assessments, the specific rules are covered in using personality tests in hiring yourself. If a recruiter or screening company is involved, ask who handles each compliance step, which I cover in the questions to ask a recruiter before a key hire.

• Write down the job-related criteria before you review applications.
• Ask every candidate for the same role the same core questions.
• Avoid questions about age, family plans, religion, national origin, health or disability.
• Give any assessment to all finalists at the same stage, in the same way.
• Keep notes on why each candidate was or was not selected.

At-will employment, and what it does not cover

Texas is an employment at-will state, which generally means either side can end the relationship at any time for any lawful reason. Owners sometimes take that to mean hiring and firing decisions carry little risk. That is a misreading. At-will status does not allow decisions based on a protected characteristic or in retaliation for protected activity, and the discrimination laws above apply at every stage, including who you choose not to hire.

The way you describe a job and make an offer can also affect the relationship. Promises in interviews or offer letters deserve care, which is another reason to put a consistent process in writing and to have an attorney look over your standard offer letter.

Questions to bring to an employment attorney

A short meeting with an attorney before you cross the next threshold is far cheaper than fixing a problem afterward. If you do not already have one, a business attorney like Steven Besly can advise you or point you to an employment specialist. These are the questions I suggest owners bring.

• Which federal and Texas thresholds have we crossed, counting part-time staff?
• Do our job postings, application and interview questions need changes?
• Is our offer letter consistent with at-will employment?
• Are any of the assessments or background checks we use a problem?
• Who should own I-9 and new hire reporting, and how do we document it?
• What should change in our handbook as we approach the next threshold?

Building a hiring process that grows with you

The companies that handle growth well treat hiring as a system, not an event. They write role profiles, use structured interviews, assess candidates consistently and onboard deliberately, so each new threshold is a small adjustment rather than a scramble. That system is also what I help owners build, because the same structure that keeps you on the right side of the law is what keeps you from hiring the wrong person.

Growth also changes who does the hiring. At ten employees the owner usually interviews everyone; at forty, managers are making most of the decisions, often with no training in how to do it consistently. That handoff is where many companies lose both quality and consistency, and it is the moment to teach managers a shared method.

If your company is growing across Dallas–Fort Worth and hiring has started to feel improvised, I am glad to look at your process with you. I can help with the selection side, a structured, personality-based approach your managers can run, while your attorney handles the legal review.

Questions people ask me