Top 5 Compliance Risks that Could be Lurking In your HR Department

Regulatory compliance isn’t just paperwork—it’s protection for your business. That protection can quickly get complicated in Texas thanks to overlapping federal, state, and local rules. Between wage laws, data privacy, and safety requirements, staying compliant is tough—and falling behind can mean fines or legal headaches.

That’s where a dedicated HR partner like Lone Star PEO comes in. We help Texas businesses handle compliance confidently, so you can focus on growth, not red tape.

Texas Wage Laws

Texas businesses must follow both the federal Fair Labor Standards Act (FLSA) and Texas-specific regulations. That means minimum wage laws, overtime requirements, and restrictions on child labor all apply.

Here’s what you need to know:

• Federal minimum wage is $7.25/hour (some employees, like those earning tips, have different rules).
• Nonexempt employees—most hourly workers—must get overtime for hours worked over 40/week.
• Strict rules protect minors, including what jobs they can do and their work hours.

Are you unsure if your employees are exempt or nonexempt? Mistakes here can trigger costly lawsuits and fines. According to the U.S. Department of Labor, back wages collected for FLSA violations exceeded $230 million in 2023.

How Do You Stay Payroll Compliant in Texas?

Payroll compliance is about more than paying people on time. You must also properly deduct taxes, calculate overtime, and manage benefit contributions. Even an honest mistake can mean IRS penalties—and unhappy employees.

Payroll compliance essentials:

• Subtracting the right federal, state, and local taxes
• Documenting and paying overtime accurately
• Handling pre-tax plan contributions (like 401(k) or FSA)

The IRS assessed more than $6 billion in payroll tax penalties in 2022. That’s avoidable.

What Are Workplace Safety Rules?

OSHA (Occupational Safety and Health Administration) sets nationwide standards designed to prevent workplace injuries. Texas businesses of all sizes must provide a safe workspace for every employee—no exceptions.

Safety compliance includes:

• Marked, clear exits and fire plans
• Uncluttered walkways and safe work surfaces
• Access to first aid kits and up-to-date emergency protocols

The requirements are even stricter if you’re in construction, manufacturing, or agriculture. Following OSHA guidelines can result in fines—OSHA issued more than $4 billion in penalties in 2023, according to OSHA enforcement data.

Data Privacy and Cybersecurity 

If you collect or store sensitive data—employee info, customer records—you’re affected by privacy laws. Texas businesses must heed the Texas Privacy Protection Act and related regulations. Not complying exposes you to:

• Risk of costly data breaches
• Lawsuits from consumers or employees
• Loss of customer trust

Texas Hiring and Benefits Laws

Texas employment law is always evolving. From correctly classifying employees and contractors to delivering mandatory benefits, compliance is challenging, especially for small businesses. Key compliance factors include:

• Differentiating between independent contractors and W-2 employees
• Properly carrying Texas Workers’ Compensation, if required
• Keeping up-to-date with state-specific benefit requirements

How Does Lone Star PEO Help You Stay Compliant?

Staying compliant doesn’t have to be overwhelming. Partnering with Lone Star PEO gives you peace of mind and expert support, all year round. Here’s how we help:

• Regulatory alerts: You get updates anytime federal, state, or local laws change.
• Ongoing training: We deliver practical, staff-friendly compliance and workplace safety courses.
• Internal reviews: Frequent audits help you catch and fix issues early.
• Crisis planning: If a problem comes up, we support a fast and effective response.

Ready to Take the Stress Out of Compliance?

Lone Star PEO helps Texas businesses handle compliance, so you can get back to what you do best. From payroll and safety to benefits and training, our experts provide the guidance and support you need to stay protected.

Want to make compliance simple? Contact Lone Star PEO today and see how we help Texas companies thrive.