Regular Session
Government Affairs & Regulatory Compliance Analysis
HB762 imposes a strict statutory cap on severance pay for all political subdivision employees and independent contractors, limiting payouts to 20 weeks of compensation. The law voids any contractual provision exceeding this cap and prohibits severance entirely if the individual or vendor is terminated for "misconduct. " This impacts all cities, counties, and special districts (excluding public hospitals) and the private sector vendors contracting with them.
Rep. Jeff Leach·House Bill·Regular Session
Governing Body of the Political Subdivision (sole authority to determine 'misconduct') • Texas Civil Courts (prohibited from enforcing non-compliant judgments)
This legislation has regulatory implications for the following Texas businesses and organizations:
Significant regulatory changes (effective 2025-06-22). Review with your legal and compliance teams to understand implications.
Affected business types:
lowMinimal cost impact anticipated.
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Key implementation requirements and action items for compliance with this legislation
JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.
Schedule a ConsultationInformation presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.
This bill's path through the Texas Legislature
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Common questions about HB762
HB762 imposes a strict statutory cap on severance pay for all political subdivision employees and independent contractors, limiting payouts to 20 weeks of compensation. The law voids any contractual provision exceeding this cap and prohibits severance entirely if the individual or vendor is terminated for "misconduct. " This impacts all cities, counties, and special districts (excluding public hospitals) and the private sector vendors contracting with them.
HB762 was authored by Texas Representative Jeff Leach during the Regular Session.
HB762 was signed into law by Governor Greg Abbott on June 22, 2025.
HB762 is enforced by Governing Body of the Political Subdivision (sole authority to determine 'misconduct') and Texas Civil Courts (prohibited from enforcing non-compliant judgments).
The regulatory priority for HB762 is rated as "critical". Businesses and organizations should review the legislation to understand potential impacts.
The cost impact of HB762 is estimated as "low". This may vary based on industry and implementation requirements.
HB762 addresses topics including city government, city government--employees/officers, county government, county government--employees/officers and political subdivisions.
Key dates for HB762: Effective date is 2025-06-22. Consult with legal counsel regarding applicability.
HB762 establishes the following penalties: civil/judicial penalty of Denial of Writ of Execution/Mandamus for Seeking to enforce a severance judgment that exceeds 20 weeks compensation or ignores misconduct findings.; contractual penalty of Forfeiture of excess severance for Termination for misconduct (as determined by governing body) or severance exceeding 20 weeks.. Consult with legal counsel for specific applicability to your situation.
JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.
