From: Staffing
The Texas Payday Law is located at Tex. Lab. Code §§ 61.001 – 61.095. As used in the law, wages means compensation owed by an employer for:
- Labor or services rendered by an employee, whether computed on a time, task, piece, commission, or other basis.
- Vacation pay, holiday pay, sick leave pay, parental leave pay, or severance pay owed to an employee under a written agreement with the employer or under a written policy of the employer.
Coverage
The law covers all Texas employers.
Franchises
A franchisor is not considered to be an employer of either a franchisee or a franchisee’s employees.
Franchisee and franchisor have the meanings assigned by 16 C.F.R. § 436.1.
Note. Effective September 1, 2015, a franchisor will not be considered an employer for claims related to employment discrimination unless the franchisor has been found by a state court to have exercised a type or degree of control over its franchisee or its franchisee’s employees not customarily exercised by a franchisor for the purpose of protecting the franchisor’s trademarks and brand.
Frequency of Payment
An employer must pay employees who are exempt from the federal Fair Labor Standards Act (FLSA) on designated paydays at least once a month. All other employees must be paid on designated paydays at least twice a month. If wages are paid twice a month, each pay period must consist, as nearly as possible, of an equal number of days.
If an employer fails to designate paydays, the paydays are the 1st and 15th of each month. If an employee is not paid on payday for any reason, including the employee’s absence, payment must be made on another regular business day on the employee’s request.
Wages paid on commission and bonuses are due according to the terms of either an agreement between the employee and employer, or an applicable collective-bargaining agreement. In the absence of any such agreement, commissions and bonuses must be paid in the same timely fashion required for other wages.
Termination of Employment
An employee who is discharged from employment must be paid no later than the sixth day after termination. An employee who quits or resigns must be paid no later than the next regularly scheduled payday.
Form of Payment
Employers must pay wages in cash or by checks that are convertible to cash on demand, or by the electronic transfer of funds. Employees may agree in writing to receive part or all of the wages in kind or in another form.
Payment by a written instrument that is not negotiable or for which payment is refused for any reason attributable to the employer does not constitute payment of wages.
Delivery of Payment
An employer must pay wages by the following means:
- Delivering them to the employee at the employee’s regular place of employment during regular employment hours.
- Delivering them to the employee at a time and place agreed on by the employer and employee.
- Sending them to the employee by registered mail, to be received by the employee no later than the regular payday.
- Delivering them to a person designated by the employee in writing.
- Delivering them to the employee by any reasonable means authorized by the employee in writing.
- Delivery through a direct deposit plan.
An employer may pay wages to an employee with an account at a financial institution that qualifies for and utilizes an electronic funds transfer through a direct deposit plan.
Employers who pay by direct deposit must do the following:
- Notify each affected employee in writing, at least 60 days before the date when the direct deposit payroll system is scheduled to begin, that the employer is adopting a direct deposit payroll system.
- Obtain from the employee any information required by the employee’s financial institution that would be necessary to implement the electronic funds transfer.
Deductions
Generally, an employer may not withhold or divert any part of an employee’s wages unless the employer:
- Is ordered to do so by a court of competent jurisdiction.
- Is authorized to do so by state or federal law.
- Has written authorization from the employee to deduct part of the wages for a lawful purpose.
The Texas Workforce Commission has established a web page that describes in detail the permissible deductions an employer may deduct from an employee’s pay.
Bonds
The Texas Workforce Commission may require an employer to deposit a bond if:
- The employer is convicted of two violations of the wage payment law.
- A final order of the commission against an employer for nonpayment of wages remains unsatisfied after the 10thday after the date on which the time to appeal from that final order has expired and an appeal is not pending.
The bond must be:
- In an amount approved and considered by the commission as adequate under the circumstances.
- Payable to the state.
- Conditioned that the employer, for a period not to exceed 36 months, pay the employees in accordance with the wage payment law.
- Conditioned that the employer pay any sum recovered against the employer under the wage payment law.
Suits to Enforce Bond Requirement
If an employer fails to deposit a required bond before the 11th day after the date on which demand is made for the bond, the Attorney General may bring a suit in the name of the state against the employer to furnish the bond or to cease doing business until the employer furnishes the bond.
If the court finds just cause for requiring the bond and that the bond is reasonably necessary and proper to secure prompt payment of the wages of the employees of the employer and the employer’s compliance with this chapter, the court may enjoin the employer from conducting business until the requirement is met. The injunction may also apply to any other person concerned with or in any way participating in the failure to pay wages resulting in the conviction or in a final order of the commission. The court may make any other order appropriate and necessary to compel compliance with the requirement.
In an action under the law, the employer has the burden of proving that the bond is unnecessary or that the amount demanded by the commission is excessive.
Posting Requirements
Texas employers must conspicuously post and maintain the Texas Payday Law poster (both the English and Spanish version). If the employer is covered by the state unemployment compensation and is covered by the Texas Payday Law, the employer can obtain a poster combining both laws.
Employers must also post notices of paydays in conspicuous places in the workplace.
Enforcement
An employee who is not paid wages as prescribed by Texas’ wage payment law may file a wage claim with the Texas Workforce Commission no later than the 180th day after the date the wages claimed became due for payment. The 180-day deadline is a matter of jurisdiction. If a wage claim is filed later than the 180-day deadline, then the examiner will dismiss the wage claim for lack of jurisdiction.
A wage claim must be filed in a manner and on a form prescribed by the commission and must be verified by the employees. Employees may file a wage claim by using any of the following methods:
- In person at an office of the commission.
- By mailing the claim to an address designated by the commission.
- By faxing the claim to a fax number designated by the commission.
- By any other means adopted by the commission by rule.
The commission will analyze each wage claim and, if the claim alleges facts actionable under the wage payment law, will investigate the claim and issue a preliminary wage determination order dismissing the wage claim or ordering payment of wages determined to be due and unpaid. If the commission imposes an administrative penalty, the preliminary wage determination order must include an order for payment of the penalty.
Either party may request in writing a hearing before a wage claim appeal tribunal to appeal a preliminary wage-determination order no later than the 21st day after the date the commission examiner mails notice of the order. If neither party requests a hearing within the prescribed period, the order becomes the final order of the commission for all purposes, and neither party is entitled to judicial review of the order.
An employer that does not request a hearing within the prescribed period must pay the amount ordered to the commission no later than the 21st day after the date the commission mails notice of the order. The payment must equal the net amount of outstanding wages after any valid deductions and must include an itemized list of those deductions.
After a hearing, the commission examiner will enter a written order for the payment of wages that it determines to be due or for the payment of any assessed penalty.
Criminal Penalties
An employer violates Texas’ wage payment law if the employer:
- At the time of hiring an employee, intends to avoid payment of wages owed to the employee.
- Fails after demand to pay those wages.
In addition, an employer commits an offense if the employer:
- Intends to avoid payment of wages owed to an employee.
- Intends to continue to employ the employee.
- Fails after demand to pay those wages.
Any violation of Texas’ wage payment law is a third degree felony and each failure to pay constitutes a separate offense. If the Texas Workforce Commission examiner, a wage claim appeal tribunal, or the commission determines that an employer acted in bad faith in not paying wages as required, the examiner, tribunal, or commission, in addition to ordering the payment of the wages, may assess an administrative penalty against the employer. The administrative penalty assessed may not exceed the smaller of the amount of wages in question or claimed, or $1,000.
The Attorney General may seek injunctive relief against an employer who repeatedly fails to pay wages in accordance with the law.
Contact Information
Texas Workforce Commission
www.twc.state.tx.us
