What Texas HB 149 Means for HR Professionals

AI is already changing how companies hire, manage, and evaluate employees in the workplace. For HR professionals, AI is a game changer because it can help with things like speeding up resume screening, predicting employee turnover, and guiding performance evaluations.

But using new methods comes with responsibility and legal compliance.

The role of AI in HR is expanding, and it’s imperative that these technologies are used fairly, ethically, and in accordance with the law. New legislation is aimed at protecting individuals from the consequences of AI, including its use in the workplace. One major example is a new law from Texas: HB 149, also known as the Texas Responsible Artificial Intelligence Governance Act, that went into effect January 1, 2026.

Here's What You'll Learn

What Is Texas HB 149?

Texas HB 149 is one of the first state laws that create a regulatory framework around the use of AI, with a strong focus on transparency, fairness, and accountability. While it doesn’t target HR specifically, many of its provisions directly touch on core HR processes, especially those related to hiring, promotions, and performance evaluations.

HB 149 prohibits practices such as:

• Using or developing AI systems with the intent to unlawfully discriminate against protected classes under state or federal law;
• Failing to disclose AI interactions to consumers (in the case of state agencies).

It even goes deeper, especially for employers. The law gives the Texas Attorney General enforcement authority, and when investigating complaints, they can demand detailed documentation on how your AI systems work and how they’re used.

So, if your HR tech stack includes AI, then you’ll need to make sure that your AI vendors comply with and can produce the following (outlined in Section 552.103):

1. A high-level description of the AI system’s purpose, intended use, deployment context, and associated benefits;
2. A description of the type of data or program used to train the AI;
3. A summary of the categories of data processed as inputs for the AI system;
4. A high-level overview of the outputs the AI system generates;
5. Any metrics used to evaluate performance of the system;
6. Any known limitations of the system;
7. An outline of post-deployment monitoring and safeguards, including how oversight, user feedback, and real-world learning are managed.

Quick translation? Even before you deploy an AI system in your hiring or HR processes, you should already be asking these questions to your vendors and documenting the answers. If they can’t provide answers to these items, then it may be time to look for a new vendor.

Who Does This Texas Bill Apply To?

If your company operates in Texas and uses AI in any employment-related way, then this law applies to you. That includes:

• HR teams using AI for recruiting, screening, performance evaluations, or workforce planning;
• Managers using AI-generated data to make decisions about employees;
• Vendors or software providers who build or sell AI-driven tools like applicant tracking systems (ATS), video interviewing platforms, or predictive analytics models.

It’s critical to note that, even if your organization didn't build the AI, you’re still responsible for how it's used and whether it meets both legal and ethical standards.

What This Looks Like in Practice: HR Functions Under the Microscope

Let’s break down how HB 149 could impact the most common ways HR uses AI today, and how you can stay ahead.

1. Recruitment and Candidate Screening

AI is widely used to filter resumes, rank candidates, and even conduct initial interviews. But under HB 149, you can’t use these tools with discriminatory intent, and you must use them transparently.

What can you do?

Now here’s where it gets a little nuanced. HB 149 specifically states that disparate impact alone is not enough to prove discrimination. So, if your AI tool unintentionally leads to unequal outcomes in Texas, that doesn’t automatically violate this law, unless it can be shown that there was an intent to unlawfully discriminate.

Even without intent, your tools are still subject to federal civil rights laws, which do consider disparate impact when evaluating discrimination. If you're operating outside of Texas, keep in mind that many other state laws also recognize disparate impact liability.

So, while the restrictions under HB 149 are narrow, they don’t override broader legal obligations. Make sure any criteria used by your AI tools are job-related and consistent with business necessity. Ask your vendors for validation studies that demonstrate this, and not just generally, but for your specific use case.

2. Employee Management and Performance Evaluation

AI is increasingly used to support decisions around promotions, compensation, and performance feedback. Without proper oversight, these systems can amplify bias or reinforce inequities.

How can you stay on the right side of the law (and ethics)?

Remember that even if your AI systems are compliant with HB 149’s standards, you’re still accountable under federal laws and broader employment regulations.

3. AI Governance & Policy Building

This is your chance to take the lead. HR can help shape how AI is adopted responsibly across the organization.

Start with these key actions:

Again, just because you didn’t build the AI doesn’t mean you’re off the hook. You’re still accountable for its use and impact.

4. Risk Mitigation and Accountability

AI in HR can be a legal and reputational risk. Legal risks can include financial remedies, and in some instances, penalties, and reputational risk can negatively impact your overall business. Managing that risk is extremely important.

Here are some tips on how to manage this:

Remember that this isn’t only about protecting your company. It’s about protecting your employees and job candidates, too.

What Should HR Do Now?

Here are the steps HR should take to ensure their compliance with the law:

1. Audit Your AI Tools: Take inventory of every AI-driven tool you're using. Evaluate them for transparency, fairness, and legal compliance, especially in light of HB 149, federal law, and other applicable state laws.
2. Talk to Your Vendors: Ask them questions, such as:
   • How was the tool validated?
   • Was it validated for our specific use case?
   • Is the tool explainable and auditable?
   • Can you provide documentation to help us comply with HB 149?
3. Create Clear AI Use Policies: Define how AI is used in HR. Spell out who’s responsible, what’s allowed, and how to escalate concerns.
4. Train Your Teams: Make sure your HR teams understand:
   • The basics of AI systems and how they function;
   • How to recognize bias or legal risks;
   • The legal aspect, including Texas HB 149, federal civil rights law, and other states’ employment laws.
5. Consult with Compliance Experts: All of this can feel overwhelming. Compliance experts like OutSolve can help you build policies, vet tools, and help with AI deployment.

What Texas HB 149 Means for Your Organization

While Texas HB 149 is one the first states laws addressing AI, employers should expect more to come. As more states move toward AI regulation, and as the technology continues to change, HR has an opportunity to lead with knowledge and integrity.

While this is about legal compliance, it’s also about making sure that the technologies we use reflect our core values, such as fairness, transparency, and respect for every applicant and employee.

If you haven’t started preparing for HB 149, now is the time. OutSolve's compliance consultants are ready to partner with you & support you every step of the way.

Looking for insights on implementing AI practices into your HR routine? Join HR Gumbo City on Slack, the OutSolve community where you can chat with other HR professionals, get advice, and more!