A number of incentives direct Mexico’s capital to the Texas market: new supply chains, security concerns, a growing Hispanic population in dynamic Texas cities, and a simple need for growth.
One feature is the flexibility of Texas labor law. The entrepreneur who relocates or expands from Mexico to Texas, will be pleasantly surprised by the absence of the obligation to grant profit sharing, paid rest days, severance pay, absence of income tax for companies and individuals, as well as the payment of the Christmas bonus, not having the need to enter into written employment contracts, the relative rarity of unionized workforces, as well as not having to specify any definite reason for all terminations.
The average unemployment insurance rate among new employers is 2.7% for a taxable base of $ 9,000, the typical rate for workers’ compensation (the equivalent of Social Security in Mexico), even in a large city like Dallas is $ 0.29 per $ 100, and employees can enjoy a relatively high lifestyle compared to other major US cities.
If properly managed, such employer flexibility can translate into significant productivity and profit gains, even with high wages in Texas compared to Mexico.
On the other hand, in Texas, employers are required to observe minimum safety standards; comply with the established payday, and the minimum wage and overtime provisions; make accommodations for disabled workers and candidates; avoid discrimination, harassment and retaliation against protected groups; as well as provide equal opportunities for all. However, the responsible business owner in Texas can meet and exceed these requirements with careful planning.
In addition, Texas allows employers rigorous protection of company secrets (both “trade secrets,” as defined by Texas law, and simple confidential information, as defined in an internal policy or manual), and the ability to delay or stop unfair competition by current and former workers.
In their first year of operations, the new entrepreneur in Texas should focus on the following five areas:
1. Develop a safety program:
An employer cannot avoid its obligation to maintain a safe workplace and workforce. Although there is no government inspection prior to opening, the fact that (a) employees can file workers’ compensation claims for “work-related” injuries; and (b) Federal agencies can conduct random inspections at any time, creating the need to focus on safety.
Recommendations: From the beginning of the formation of a company, care must be taken to acquire adequate workers’ compensation insurance (either “statutory” or “unregistered” employer insurance), to cover the risks of your own. industry, its personnel, type of work and region. This must be done before starting any work. Over time, workers’ compensation claims can impact profit margins, as premiums increase with the incidence of claims.
Even in the beginning, it helps to have a manager who takes responsibility for the safety issue. Although this does not have to be the only role of the manager, especially when the company is small, it should be a primary responsibility. This includes mandatory (and documented) safety training for employees. The safety manager should anticipate the elements that an OSHA (Occupational Safety and Health Act) inspection would contain, and develop the kind of safety awareness and protocols that they would be proud to present at a workers’ compensation procedure or the media.
There are professional consultants available to help, but whether outside vendors or an internal leader are used, you can and should build a workplace safety program that you are proud of before an accident occurs.
2. Establish and maintain an adequate job description:
During business launch, many employees have activities that overlap. However, as soon as the roles are clear, it is prudent to establish job descriptions accurately and in compliance with legal provisions.
The benefits of business organization are obvious, but in the field of US labor law, having an adequate and well-written job description helps the new employer indirectly in several ways: (a) decisions about which employees are considered exempt from pay overtime can be better evaluated by you and your attorney; (b) when your hiring, disciplinary, promotion, demotion or firing decisions are challenged in discrimination cases, your reasons will have a solid business base; and (c) disability law can be very complex for the employer — if essential job functions are adequately described, compliance will be more direct and objections to compliance can be resolved more quickly.
A poorly written or outdated job description could be worse than no job description at all. Therefore, check and correct periodically; A good time to review the accuracy of your job descriptions is at the end of the first year. Use outside consultants to conduct quick but important reviews of your job descriptions to mitigate the risk of overtime and disability litigation.
You can insist that anyone you hire or work for is and continues to be “qualified,” but it is reasoned and appropriate job descriptions that will make your point clearer.
Use your job descriptions as guides when interviewing for new hires. Your job descriptions, as well as your questions, must be free of any expression of color, national origin, religion, disability, pregnancy, gender, or sexual orientation.
3. Take control of prohibited discrimination:
Some foreign investors are unfoundedly concerned about the possibility of frivolous and harmful litigation related to discrimination and harassment. It is impossible to completely avoid all risk from such claims, but you have a high degree of control over some areas that can reduce your risk of liability.
Develop a well-written employee handbook that prohibits unlawful discrimination, harassment, and retaliation based on color, national origin, genetic status, religion, citizenship status, veteran status, disability, pregnancy, gender, age, and sexual orientation .
A good outside attorney can help you create such manuals, in accordance with the latest legislation. In many Texas workplaces your manual must be bilingual.
Be sure to reinforce these principles with regular affirmations of your company’s commitment to equal opportunity. Make all key employment decisions for legitimate business-based reasons only, with an identifiable relationship to the job.
Make sure your employees receive, and acknowledge, your anti-bias policies. Clearly identify to whom and how they can report perceived harassment and bias. When your employees use such processes, protect them against retaliation, conduct prompt and effective investigations, and make consistent and ethical decisions about appropriate solutions.
When a disability issue arises, the most important thing would be to have a dialogue about the necessary accommodations. This is an area of Texas and U.S. law that generally requires consultation with an attorney.
4. Be careful who you hire:
Many problems can be avoided simply by not hiring employees who lack the skills or desire to be part of your workforce.
Although there are limits on drug and alcohol tests or background checks, you should consider using these tools only to the extent permitted by Texas law.
When conducting interviews, be sure to have question lists or scripts designed so as not to lead to discrimination complaints. The people you hire in the first year can often have a disproportionate impact on your success in the first few years.
5. Pay correctly:
Federal law establishes minimum wages; the market itself establishes what you are actually going to pay for. The most important issue as a new employer in Texas is “how” you will pay. The broad distinction between “exempt” (salaried employees who are not entitled to overtime) and “non-exempt” (hourly employees who must be paid overtime when they work even one hour more in a week) is crucial. It is critical to carry that correctly. Classifying employees into the correct category may often require fact-specific advice from an employment law specialist. Additionally, there are specific deadlines and limits in Texas for paying employees (and former employees). Finally, commission payments can be complex.
When starting out as an employer, especially in the first year, using a reliable payroll service can help. After the first year, if your infrastructure has grown large enough, you can consider having this role within the company.