Business Lawyers Blog
The Texas legislature has enacted several important laws in the summer and fall of 2025 that will go into effect in 2026.
Texas business owners and HR professionals are advised to stay up to date on these new regulations, as they may directly impact your company’s compliance responsibilities. For guidance on how these changes affect your organization, contact Structure Law Group. An Austin employment law attorney can answer your specific questions and help ensure your business remains in full compliance.
Texas HB 149 Regulates Artificial Intelligence
Companies are increasingly using artificial intelligence to perform routine tasks, and the rise of artificial intelligence (AI) has sparked questions about its ethical use. In response, Texas has passed, HB 149 to establish a basic regulatory framework for AI use.
For example, some companies utilize AI in hiring processes, raising concerns about potential discrimination based on race or other protected traits. Under HB 149, employers are not obligated to inform prospective employees about the use of AI in hiring or employment decisions. However, this new law does prohibit the development or use of AI systems that intentionally discriminate against protected classes under state or federal law.
The Texas Attorney General has the authority to enforce this law, but individuals are not permitted to file private lawsuits against violators.
Texas HB 3699 Changes A Definition Used in Unemployment Compensation
Texas HB 3699 is a state law that updates how initial unemployment insurance claims are processed in Texas. It made a minor tweak to what qualifies as “last work” for an unemployment compensation claimant, simplifying and clarifying when a claimant’s most recent employer should be considered liable for a claim. In practical terms, the bill aims to make it easier for the Texas Workforce Commission to determine who should be responsible for an unemployment claim and reduce administrative confusion or potential fraud arising from ambiguous definitions.
“Ban the Box” Legislation (HB 2466)
Texas’ Ban the Box law (HB2466) took effect on September 1, 2025. With the passage of HB 2466, Texas joins more than 30 states in limiting how employers can use an applicant’s criminal history.
Historically, employers included a box for applicants to check to disclose a prior conviction. The new law prohibits this box.
Under this law, most employers may no longer include criminal background questions on initial job applications and must wait until later in the hiring process to conduct background checks or inquire about criminal records. The purpose of the law is to promote fair hiring practices while still allowing employers to consider criminal history at an appropriate stage. Employers should review their job applications, interview procedures, and screening policies to ensure compliance and reduce the risk of legal exposure. SLG employment lawyers are available to review hiring procedures and ensure compliance with this new law.
Bans on Nondisclosure and Confidentiality Provisions for Sexual Assault (SB 835)
This law also went into effect on September 1, 2025. Under SB835, any confidentiality agreement related to sexual abuse is unenforceable, including any agreement related to sexual assault or aggravated sexual assault. The prohibition also applies to employee settlement agreements.
These agreements were a common part of a settlement for sexual harassment in the workplace. Other parts of the nondisclosure agreements can continue to be kept private, such as the amount of any settlement.
The law also applies retroactively in most cases to agreements signed before September 1, 2025. Employers will need to draft their NDAs with sufficient precision. Also, they should review any NDAs which were already signed but which might be unenforceable. A company could face greater risk as a result.
Contact SLG Law for Assistance
Texas employers will face several meaningful legal updates in 2026, from new restrictions on AI use and hiring practices to expanded limitations on nondisclosure agreements and changes in unemployment compensation rules. Reviewing your hiring procedures, workplace policies, and confidentiality agreements now can help prevent legal exposure and ensure smoother operations in the year ahead.
If you have questions about how these new laws apply to your business, Structure Law Group’s Austin, TX employment law attorneys are here to review your policies, assist with compliance planning, and provide practical guidance tailored to your organization.
Contact our Austin office at (512) 881-7500 today to schedule a consultation and ensure your business is fully prepared for 2026.