Can an Employer Withhold Pay as Punishment in Texas?

An employer in Texas cannot withhold a paycheck for any reason. Employers should also not engage in the withholding of overtime pay. In Texas, employers are required to provide their employees paychecks for their hours worked at least once a month. They can deliver the paycheck in person, by check or by mail if the employee requests it.

In addition, if the employee agrees, their paycheck may be provided through direct deposit to the employee’s bank account on the day following the day it is issued. Employers have to post notices of their pay periods in locations in which employees are likely to see them. If the employer does not identify paydays, the employer’s paydays have to be the first and 15th of each month.

Common concerns and issues include paychecks that are delayed or from which deductions have been made. It is essential for an employee to review their employment contract or other documents so they know when they should receive their paycheck and when deductions are made and for what reason, e.g., local, state, and federal taxes.

An employer might also make deductions from an employee’s paycheck for legally authorized, court-ordered wage garnishment for such items as back-owed child support payments.

It is important for employers to note that an employee’s pay cannot be docked because of claimed poor work performance or a bad performance review. Deductions for alleged stealing by employees can be made if it can be proven that the employee in fact stole something, destroyed a product or damaged equipment. In most cases, an employer should notify an employee if their pay will be docked before it is done and why.

Texas laws that regulate worker pay specify the timing of the payment of final paychecks. If an employee is laid off, discharged, or fired, their final pay must be paid within 6 calendar days of their discharge. If an employee quits, retires, resigns, or otherwise leaves employment voluntarily, the final pay is due on the next regularly-scheduled payday following the effective date of the resignation.

Is It Illegal To Withhold Wages From an Employee?

It is not legal for an employer to hold a final paycheck past the deadline for reasons such as the employee’s failure to return company property, failure to sign timesheets, or similar issues. If the company knows or should know what the pay should be, it must deliver the final paycheck no later than the deadline, as noted above.

Failure to return company property can, in many instances, be handled by an employer withholding salary or hourly wages or having a security deposit from an employee to ensure the return of employer property as needed.

Experts recommend having a wage agreement with employees. This agreement should provide for payment of a lower wage rate during the final pay period unless the employee satisfies certain conditions. Among the conditions would be the following:

• 2 weeks’ Notice: An employee should be required to give at least 2 weeks’ advance written notice of their resignation if they leave voluntarily.
• Return Company Property: The employee should be required to return all company property that has been issued to me within a specified number of days of their last day on the job.
• Return of Means of Access: The employee should hand over to their supervisor any keys, passwords or other means of access to the employer’s property and computer files that they used in their work. They should do this within a specified number of days after their final day on the job.

The agreement would then state that the employee’s rate of pay for the final pay period would be their usual pay rate, and the agreement would be signed by both the employer and the employee. An employer would be well advised to have a lawyer consultation in Texas with a Texas lawyer to review the legal requirements for the contents of an agreement regarding final paychecks.

The Texas Family Code provides that wage garnishment for child support obligations apply to certain post-termination lump-sum payments, such as the payments of a bonus, commission, or pay in lieu of accrued leave. If such a lump-sum payment is $500 or more, the employer must notify the Texas Attorney General’s office before making the payment, so that the agency can determine whether a deduction for past due child support should be made.

The AG’s office has 10 days after that date to notify the employer about its obligation to make a deduction for child support. If this notification is not made, the employer may make the payment without the deduction.

If, however, the AG’s office tells the employer that the support order applies to the lump-sum payment, the employer would need to make the required deduction. Because the deduction would be made per a court order, it would not have to be authorized in writing by the employee.

What Is the Difference Between Exempt Employees and Non-Exempt Employees?

Exempt employees are employees who are paid hourly wages and overtime pay for hours worked over 40 per week. Exempt employees are paid a salary and are expected to spend as much time as it takes to do their job without receiving additional pay for hours worked over 40 per week.

Non-exempt employees are employees who must be paid per the requirements of the federal Fair Labor Standards Act, including being paid at least the federal minimum wage and overtime pay for hours worked over 40 per week.

Labor laws provide the legal guidelines for how an employer should pay its employees. The federal Department of Labor (DOL) enforces federal laws that regulate wages and hours, as do Texas laws. These laws include provisions for the minimum hourly wage, overtime pay, paid leave, and breaks. They apply to both private businesses and public agencies, and employers who do not follow them are subject to legal consequences.

What Are the Consequences for Wrongfully Withholding Salary?

In Texas, an employee may file a claim to recover back wages. The Texas Workforce Commission (TWC) suggests that an employee contact their employer before filing a wage claim. Or they may wish to have a Texas employment lawyer talk to their employer to negotiate a resolution.

If an employee cannot resolve the issue with their employee through discussion, they need to file a wage claim within 180 days from the date on which the wages were supposed to be paid. They would file their complaint with the TWC. If the employer has violated Texas law in withholding pay, failing to pay when pay is due or making deductions that are not legally authorized, they would probably be found liable to pay the employee what they are owed.

Or an employee may contact the federal Department of Labor, Wage and Hour Division, which enforces the federal Fair Labor Standards Act and other federal laws relating to employment, pay and benefits. Employers may have to pay penalties to the government and would also have to pay their employee or former employee what they are owed.

Do I Need an Attorney for Issues Involving Withheld Salary?

If your employer has not paid you the full amount of pay they owe on schedule, you need to talk to a Texas employment lawyer. LegalMatch.com can connect you to a lawyer who knows both Texas and federal law relating to paychecks and can get you the remedy you deserve if you have not been paid what you are owed.