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May 11, 2024

Texas Final Paycheck Laws: Ensuring Timely Payment

In Texas, the regulations concerning the issuance of final paychecks to employees are governed by the Texas Payday Law.

This law specifies the timeframe within which an employer must provide a final paycheck depending on whether the employment ended due to termination or resignation. Understanding these laws helps protect the rights of employees and ensures they receive what they are owed promptly.

In this article, we will delve into the specifics of these regulations and what employees can expect.

When Must an Employer Pay a Final Check?

The Texas Payday Law mandates distinct deadlines for final paychecks based on the circumstances under which an employee departs:

  • If terminated: Employers must provide the final paycheck within six calendar days of the employee's discharge or termination.
  • If resigned: The final paycheck should be issued on the next regularly scheduled payday following the employee’s last working day.

What Should Be Included in the Final Paycheck?

A final paycheck should comprise all due regular wages. Additionally, if the company policy explicitly states, accrued and unused benefits like vacation pay may also be included. However, it's important to note that in Texas, there's no legal obligation for employers to pay for unused vacation or sick leave unless stipulated by the employer's policy.

What Happens If an Employer Does Not Pay on Time?

Failure to comply with these timelines can lead to penalties under the Texas Payday Law. Employees can file a claim with the Texas Workforce Commission (TWC), which will investigate the complaint and enforce penalties against the employer for non-compliance.

How to File a Claim for Unpaid Wages

Employees seeking to file a wage claim can do so through the TWC. The process involves submitting a detailed form that includes information about the employment period, the amount believed to be owed, and any pertinent employment agreements or communications.

Can Employers Withhold Part of a Final Paycheck?

Texas law permits deductions from a final paycheck only if they comply with legal standards and the employee has given prior written authorization. This includes deductions for items like uniform costs, company loans, or equipment that was not returned.

However, it is illegal for employers to withhold final paychecks as a punitive measure or for reasons such as unreturned company property or incomplete timesheets. Employers are required to pay what they know is owed to the employee by the prescribed deadline.

Tips for Employees

  • Review Company Policies: Understanding your company’s specific policies on final paychecks can provide clarity and help manage expectations regarding what you are entitled to upon leaving.
  • Keep Detailed Records: Maintain records of hours worked, accruals of benefits, and any correspondences related to employment termination and final wages. This information is vital in case of disputes.
  • Seek Legal Advice if Necessary: If issues arise with receiving your final paycheck, or if you believe your employer is not adhering to legal requirements, consulting with an employment lawyer might be advisable to ensure your rights are protected.