Hiring your first employees is a pivotal moment for any Texas business. It transforms your operation from a solo venture into an employer, and it opens the door to a range of government programs specifically designed to support job creation and workforce development. Texas offers some of the strongest employer-focused incentive programs in the country, from direct training grants to tax credits for hiring from specific populations.
Skills Development Fund
The Texas Workforce Commission's Skills Development Fund is the state's premier workforce training program. It provides grants to community and technical colleges to create customized training programs for employers who are creating new jobs or upgrading the skills of existing workers.
The program covers training costs including curriculum development, instructor fees, training materials, and in some cases equipment purchases directly related to training. Awards have ranged from small grants for a handful of positions to multi-million-dollar grants for large-scale hiring initiatives.
To access the Skills Development Fund, you work with a local community or technical college to develop a training proposal. The college submits the application to TWC on behalf of your business. Complete guide to workforce training grants.
Jobs and Education for Texans (JET) Grant
The JET Grant program funds equipment purchases at community and technical colleges to support career and technical education programs. While this is not a direct employer grant, businesses that partner with community colleges on JET-funded programs benefit from a pipeline of trained workers. If you are hiring for skilled positions, check whether your local college has JET-funded programs in your industry.
Work Opportunity Tax Credit (WOTC)
The Work Opportunity Tax Credit is a federal tax credit available to employers who hire individuals from specific target populations, including veterans, ex-felons, long-term unemployment recipients, and residents of designated empowerment zones. The credit ranges from $2,400 to $9,600 per qualifying hire, depending on the target group and hours worked.
Texas employers claim the WOTC through the Texas Workforce Commission, which certifies eligible employees. You must submit IRS Form 8850 on or before the day the employee starts work to preserve eligibility.
Federal Bonding Program
The Federal Bonding Program provides fidelity bonds at no cost to employers who hire individuals with barriers to employment, including those with criminal records. The bond protects you against employee theft or dishonesty for the first six months of employment. This program reduces the risk of hiring from populations that many employers overlook.
On-the-Job Training (OJT) Through WIOA
The Workforce Innovation and Opportunity Act (WIOA) funds On-the-Job Training programs through Texas's local workforce development boards. Under OJT, you hire and train a new employee, and the workforce board reimburses you for up to 75% of the employee's wages during the training period. This is a significant cost offset when you are hiring employees who need training to become productive.
Contact your local Workforce Solutions office to learn about OJT availability in your area. Eligibility varies by board, and funding is limited.
Registered Apprenticeship
Texas supports registered apprenticeship programs that combine on- the-job training with classroom instruction. If you are hiring for skilled trades or technical positions, establishing a registered apprenticeship can qualify you for federal and state training subsidies, tax credits in some states, and access to a steady pipeline of skilled workers.
The Texas Workforce Commission's Apprenticeship Training Program provides support and guidance for employers establishing new apprenticeship programs.
Local Hiring Incentives
Many Texas cities and counties offer incentives tied to job creation. These programs typically require you to create a minimum number of jobs at specified wage levels within a defined period. Common incentives include:
- Property tax abatements conditioned on meeting job creation thresholds
- Economic development grants tied to per-job performance metrics
- Utility rate discounts for qualifying employers in economic development zones
Contact your local economic development office to learn about available programs. Dallas-area programs. Houston-area programs. San Antonio-area programs.
Practical Steps for First-Time Employers
- Register for Texas unemployment insurance with the Texas Workforce Commission before your first hire.
- Obtain workers' compensation coverage. While not required in Texas, it is strongly recommended and may be required for government contracts.
- Submit WOTC pre-screening forms (IRS Form 8850) for every new hire to preserve potential tax credit eligibility.
- Contact your local workforce board about OJT and training subsidy programs before you hire.
- Explore Skills Development Fund partnerships with your local community college if you plan to hire multiple employees.
Bottom Line
Hiring your first employees unlocks some of the most impactful government programs available to Texas businesses. Skills Development Fund training grants, WOTC tax credits, WIOA on-the-job training reimbursements, and local job creation incentives can significantly reduce the cost of building your team. The key is engaging with workforce development programs before you hire, not after, so you can maximize the benefits available to you.
Not sure which programs may fit your business? Our free screening report checks your business against 150+ verified programs — grants, tax credits, loans, and incentives — and shows you which ones may match. Start your free screening →