Curated News
By: NewsRamp Editorial Staff
February 25, 2026
Fractional HR: Texas's Answer to Growth & Compliance Risks
TLDR
- Exceptional HR Solutions' fractional services give Texas businesses a competitive edge by reducing HR costs and compliance risks while freeing leaders to focus on growth.
- Fractional HR services work by providing expert support for hiring, onboarding, investigations, compensation, and compliance without the expense of a full-time department.
- These services help Texas businesses and municipalities operate more ethically and efficiently, creating better workplaces and stronger communities through proper employee classification and support.
- A key insight from CEO Neil Katz is that workers using company email or equipment should likely be classified as W-2 employees, not 1099 contractors.
Impact - Why it Matters
This news matters because it addresses a critical pain point for the backbone of the Texas economy: small to medium-sized businesses and local governments. Misclassifying employees as contractors is a widespread and expensive error that can trigger audits, back-taxes, penalties, and lawsuits from both state and federal agencies. For business owners already stretched thin, dedicating significant time to complex HR and compliance issues directly hinders growth and innovation. Fractional HR services, as detailed here, provide a scalable, expert-led solution. This model democratizes access to professional HR guidance, which was previously a luxury only large corporations could afford. By adopting this approach, Texas businesses can protect themselves from devastating legal and financial consequences, retain talent through proper management, and free up leadership to drive the economic expansion the state is experiencing.
Summary
In the midst of Texas's economic boom, small to medium-sized businesses and municipalities are grappling with complex human resources challenges that can divert leaders from core operations and expose them to significant legal risks. Neil Katz, CEO of Exceptional HR Solutions, recently appeared on The Building Texas Show to discuss how fractional HR services offer a strategic solution. With over 25 years of experience, Katz revealed that business owners often spend 10–50% of their time on people-related issues. Fractional HR services provide expert support in areas like hiring, onboarding, compliance, and employee relations without the prohibitive cost of a full-time department, allowing companies to manage growth while reducing risk.
A critical focus of the discussion was the dangerous misclassification of employees as 1099 independent contractors. Katz issued a stark warning on The Building Texas Show's Youtube Channel, emphasizing that this common mistake could sink a small business. He clarified that the law, not the employer or worker, defines classification status. Key indicators that a worker should be a W-2 employee include using company email or equipment, or receiving the majority of their income from a single employer. "If you're not sure," Katz advised, "the rule of thumb is to hire them as an employee." This guidance is vital for Texas businesses aiming to avoid costly legal penalties and audits.
Exceptional HR Solutions extends its fractional model beyond private companies to serve public entities like the City of Bonham, providing municipalities with professional HR leadership without the overhead of a full-time director. This approach is ideal for small cities and businesses that need top-tier expertise but lack the budget for a dedicated department. By visiting ExceptionalHRSolutions.com, organizations can access a team of 20 experts to navigate the complexities of modern workforce management. The core message from Katz's interview is clear: leveraging fractional HR expertise enables Texas leaders to refocus on what they love—growing their business and serving their community—while ensuring compliance and mitigating people-related risks.
Source Statement
This curated news summary relied on content disributed by Newsworthy.ai. Read the original source here, Fractional HR: Texas's Answer to Growth & Compliance Risks
