Phase 1 · Legal Hygiene
You did not start a business to memorize the FLSA.
The law does not care that you have eight people and no handbook. A consultant builds the baseline a small shop can actually run.
The owner question
“Am I even allowed to do this?”
Phase 1 of 3
Legal Hygiene
Stay legal without becoming a lawyer: the Texas and federal rules that still apply when the owner is the HR department.
The engagement
HR legal hygiene for shops with 5 to 50 people
- Written answers from Ask Jennifer
- Handbook
- Classification review
- Posters and notices
- A call us before you fire someone line
Why owners call
A single employment dispute tends to cost far more than the policy that would have prevented it.
What you will be fluent in
The 20 ideas that do the heavy lifting in this phase.
Each one in plain English. Open a row for the business example, why it matters, and where it comes from.
Or read every term across all three phases
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At-will employment At will employment is the Texas default, so either side may end the job at any time for a lawful reason unless a contract or a legal exception says otherwise. 01
The default permits the ending. The record has to survive the reason.
- What it looks like in business
- An owner may eliminate a role without proving misconduct, yet may not pick that person because she filed a wage complaint.
- Why it matters
- The power to end employment is broad, and the exceptions that police the reason are narrower, so the file has to show the lawful reason.
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Texas Commission on Human Rights Act This is the Texas law against employment discrimination, retaliation, and related unlawful practices based on protected characteristics. 02
Identify the protected basis, the action, the coverage rule, and the complaint deadline.
- What it looks like in business
- A shop with fewer than fifteen people still needs a harassment response, because the sexual harassment coverage can attach at a smaller size than the general rule.
- Why it matters
- Coverage, deadlines, and employer size depend on the claim, and guessing the federal threshold as the only number leaves a Texas gap.
- Source
- Tex. Lab. Code Ch. 21
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Texas Payday Law Texas employers must pay wages on established paydays and may withhold money only when the law permits it. 03
Ask when wages were due, what counted as wages, and what authority supported each deduction.
- What it looks like in business
- Payroll pays nonexempt staff at least twice each month, pays exempt staff at least monthly, and checks written authorization before a deduction.
- Why it matters
- A late final paycheck, a handshake bonus, or an unsupported deduction can become a wage claim even when payroll meant no harm.
- Source
- Tex. Lab. Code Ch. 61
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Fair Labor Standards Act Covered nonexempt employees must receive minimum wage and overtime after forty hours in a workweek, with accurate records of compensable time. 04
Count the hours first and prove the exemption second.
- What it looks like in business
- An owner titles someone manager and pays a salary, then a consultant checks duties and salary tests before treating the role as exempt.
- Why it matters
- Job titles and salary alone do not create an exemption, and small recurring time errors can produce large group claims.
- Source
- 29 U.S.C. § 201 et seq.
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Worker classification Calling someone a contractor does not make it so. The work, the control, and the economic reality decide the class. 05
Label last. Facts about control and independence first.
- What it looks like in business
- A designer works only for this shop, uses its tools, and follows its hours, so a 1099 label will not survive a wage or tax review.
- Why it matters
- Misclassification is one of the most expensive small business HR mistakes, because back wages, taxes, and penalties stack on the same facts.
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Form I-9 Every new employee must prove identity and work authorization on this form, and the employer must examine the documents in person or through an authorized alternative. 06
Section 1 on day one. Section 2 by day three. Keep the form.
- What it looks like in business
- An owner means to finish the form next week, hires four people in a busy month, and later faces per form fines for late or incomplete files.
- Why it matters
- The duty is the same at five employees as at five thousand, and an audit compounds one miss across every hire.
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Texas new hire reporting Employers send basic identifying and employment information so child support agencies can locate income and enforce support orders. 07
Every hire and rehire starts a twenty day reporting clock.
- What it looks like in business
- Payroll enrolls a returning employee and assumes that is enough, while the separate twenty day reporting clock has already started.
- Why it matters
- A payroll record alone does not satisfy the reporting duty, and missing rehires is a common small shop gap.
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Texas Workers' Compensation Texas usually lets a private employer choose coverage, but that choice changes benefits, notices, reporting, defenses, and lawsuit exposure after an injury. 08
Coverage status is the first fact in every Texas workplace injury response.
- What it looks like in business
- Before giving an injured worker forms or claims talk, the owner confirms whether the shop is a subscriber, because the next sentence depends on that fact.
- Why it matters
- Treating a nonsubscriber like a subscriber, or the reverse, can mislead the employee and mishandle a serious claim.
- Source
- Tex. Lab. Code Title 5
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Employee handbook A handbook is not a novel. It is the short, current list of how pay, time, conduct, complaints, and accommodations work here. 09
Write the rules before you need them, then keep them short enough to use.
- What it looks like in business
- A harassment complaint arrives and the owner has no written path, so the response is invented at the lunch table and later looks unfair.
- Why it matters
- Texas does not require a handbook, yet a missing complaint path and missing at will language are how small shops lose both trust and claims.
- Source
- EEOC Small Business
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Required employment posters Some notices have to hang where people work, not in a binder the owner meant to print. 10
If the people who work here cannot read it, it is not posted.
- What it looks like in business
- A consultant walks the floor, finds last year's federal set behind the office door, and replaces it with the current federal and Texas set in the break area.
- Why it matters
- Missing or outdated notices are an easy citation, and they are also how employees never learn the complaint path you claim to offer.
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Family and Medical Leave Act Eligible workers at covered employers may take protected leave for qualifying needs and generally return to the same or an equivalent job. 11
Check employer coverage, employee eligibility, qualifying reason, and required notices in that order.
- What it looks like in business
- A shop with thirty people is usually not a covered employer, so the consultant tracks headcount instead of copying a big company leave policy.
- Why it matters
- Coverage does not make every employee eligible, and the fifty employee line is a planning fact, not a surprise to meet in a crisis.
- Source
- 29 U.S.C. § 2601 et seq.
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Texas educator certification requirement A district or charter cannot treat a degree or prior experience as a substitute for the Texas credential legally required for a covered educator role. 12
Verify the credential against the assignment before the employee begins work.
- What it looks like in business
- Before a small charter posts a teacher vacancy, HR matches the active certificate or permit to the proposed assignment rather than the résumé story.
- Why it matters
- A person may be highly qualified yet legally ineligible for that role, grade span, subject, or student population.
- Source
- Tex. Educ. Code § 21.003
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Texas Minimum Wage Act Covered Texas workers must receive at least the applicable minimum hourly wage, subject to lawful credits, exemptions, and federal protections. 13
Start with hours and pay, then prove any credit or exemption instead of assuming it.
- What it looks like in business
- Payroll checks whether a tipped employee, trainee, student worker, or other special category satisfies every condition before applying a lower cash wage or exemption.
- Why it matters
- Calling someone salaried, contract labor, or a trainee does not by itself remove minimum wage duties.
- Source
- Tex. Lab. Code Ch. 62
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Texas Unemployment Insurance The unemployment system collects employer taxes and may provide temporary benefits to eligible workers who lose work through qualifying circumstances. 14
Register, report, document the separation, and answer the agency on time.
- What it looks like in business
- After a separation, HR sends accurate wage and separation facts to the Texas Workforce Commission instead of relying on a vague internal label such as terminated.
- Why it matters
- Late registration, incorrect worker classification, or weak separation records can affect taxes, benefit decisions, and appeal rights.
- Source
- Tex. Lab. Code Title 4
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Workers' compensation retaliation An employer may address legitimate performance issues, but it may not punish a worker for using the workers' compensation system. 15
Separate the claim from the decision and prove the same action would have occurred without it.
- What it looks like in business
- A supervisor proposes termination immediately after learning about a claim, so HR compares the timing with earlier records and tests whether the stated reason is consistent.
- Why it matters
- Sudden discipline, hostile comments, and shifting explanations can make a lawful decision look retaliatory or reveal that it actually is.
- Source
- Tex. Lab. Code § 451.001
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Texas child labor law A minor may work only when the job, task, equipment, schedule, and age fit the applicable state and federal rules. 16
Age plus task plus hours determines whether the assignment is lawful.
- What it looks like in business
- Before assigning a sixteen year old to a kitchen, warehouse, vehicle, or powered machine, HR checks the exact duty rather than the broad job title.
- Why it matters
- A generally safe workplace can still contain a prohibited task, and the stricter rule controls when state and federal limits differ.
- Source
- Tex. Lab. Code Ch. 51
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Right-to-work Texas is a right-to-work state, so union membership and union dues can never be made a condition of getting hired or staying hired. 17
The choice belongs to the worker. The bargaining duty still belongs to the employer.
- What it looks like in business
- A crew votes in a union. The shop still cannot fire the two people who decline to join or to pay dues.
- Why it matters
- The rule protects the worker's choice, and it does not free an employer from bargaining with a union the crew actually chose.
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Exempt / non-exempt Exempt and non-exempt describe whether overtime is owed, and the label is earned by how someone is paid and what they actually do, never by the job title. 18
Salary is one test. Duties are the other, and the title is neither.
- What it looks like in business
- A salaried assistant manager who mostly runs a register stays non-exempt, so hour forty one still costs time and a half.
- Why it matters
- Calling a role exempt to dodge overtime is the classification mistake that produces two years of back pay plus an equal amount again.
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Texas Workforce Commission The Texas Workforce Commission is the state agency an owner hears from when someone files for unemployment or claims unpaid wages. 19
The letter has a deadline. The file has the answer.
- What it looks like in business
- A former cook files a wage claim. The agency writes to the shop, reads both sides, and issues a decision the owner can appeal on a deadline.
- Why it matters
- Its rulings turn on the paperwork already in the file, so the response is usually won or lost before the letter ever arrives.
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Paid time off Texas requires no private employer to offer vacation, sick days, or holidays, so any paid leave a small business gives is a promise it wrote itself. 20
The state sets no floor. Your own handbook sets one for you.
- What it looks like in business
- A handbook says unused vacation is paid out at separation. That sentence turns the payout into wages the state will enforce on the final check.
- Why it matters
- Silence leaves an owner free, and a written policy binds them, which makes the handbook wording the whole decision.
- Source
- TWC, Texas Payday Law
The other two questions
Phase 2 · Hire, Land, Keep
“Why can I not find, or keep, good people?”
Informal hiring feels fast. It is expensive. We rebuild one role's hiring and onboarding, then you copy the pattern.
Hire well and keep people past the 90 day cliff
Phase 3 · Hard Conversations
“What do I do with this person?”
When the owner is also HR, every conflict feels personal. A fair process keeps the team, and the file, intact.
Handle hard people moments without making them worse
Next step
Ask Jennifer: send what is keeping you up and get a straight answer.
One conversation, no retainer, and a straight answer about whether this is a fix or a phone call to a lawyer.