When a person loses their job due to firing, the Texas Payday Law guarantees that they will get their final paycheck within a few days of the event. It is illegal for an employer to withhold a worker's final paycheck for any reason. An employee who does not get their last check has the right to file a wage claim with the Texas Workforce Commission (TWC).
Texas Final Paycheck Laws
Texas Payday Law states that employees terminated through layoffs, firings, discharge or another involuntary separation from their employer will get their final payment of wages within six calendar days of that relationship termination. If they leave voluntarily by quitting, retiring or resigning, they'll get their last paycheck on the next scheduled payday following the day they leave.
The state views "mutual agreement" separation between employers and employees as involuntary, but this will depend on the circumstances of that separation. State laws determine this through rules from unemployment compensation cases. In short, the separation is voluntary if the employee quits with work still available to them, but if the employer severs the tie, and the employee has no choice, it is involuntary.
What the Employee's Final Paycheck Includes
Final pay to a worker includes several things, from regular wages to fringe benefits. The employer must pay a worker their standard earnings no later than the regularly scheduled payday if they left voluntarily and by the sixth calendar day for employees for whom the employer severed the tie.
Fringe benefits deadlines and other types of pay, like commissions and bonuses, are under the same timeline as payment of regular wages. The only time this would not be the case is if there was a wage agreement or policy regarding payment in place between the employer and employee. In that case, an employee will get paid according to the agreement or policy.
Withholding a Paycheck for Final Wages
Texas does not allow employers to hold a final paycheck past the previously mentioned deadlines. The employee's failure to return company property or sign time sheets are not valid excuses for withholding a paycheck. If the employer knows the amount of the employee's pay, they must deliver their final paycheck no later than the deadlines mentioned above.
If a former employee fails to return the employer's property, that can result in wage garnishment. The employer can handle other violations via a wage agreement that offers a lower wage unless certain conditions are satisfied. However, the employer cannot hold back a check.
If an employer accepts the employee's notice of resignation before its effective date, they do not owe the worker any pay for the days not worked. The only exception is in the instance that an employment contract was in place obligating the employer to pay for that time.
Final Pay for Commissions and Bonuses
Pay agreements for commissions, whether oral or in writing, should be clearly stated and any changes to them should be in writing. A thorough agreement will show how the employee earned the commission, how payment took place, if there are chargebacks (and the circumstances under which they occurred), and what happens to commissions still in process at the time of separation. An employer can offset prior commission draws against the employee's final pay.
Similarly, bonus agreements should clearly show how the employee earned the bonus. It should also show the bonus calculation, when payment usually takes place, if the bonus is discretionary in amount, timing or the ability of the company to cancel it under specific conditions, and what happens to a bonus that was in process before the employee left the company.
Wage Garnishment for Support Obligations
Wage garnishments for support obligations may apply to certain lump-sum payments after termination and be deducted from an employee's commission, bonus or payout of accrued leave. If the lump sum is $500 or more, the employer must inform the attorney general's office before making the employee's payment. The agency will then determine if it should make the support deduction.
The attorney general's office has 10 days after that date to let the employer know if it will make a support deduction. If the employer does not get a notification, they can make the payment without the deduction.
Filing a Wage Claim Against a Texas Employer
If an employer withholds an employee's final pay after the above deadlines, that person can submit a wage claim with the Texas Workforce Commission (TWC), but they must do so no later than 180 days after the wages were initially due. If the company goes bankrupt, the claimant must file the claim in the bankruptcy court – the TWC cannot process it.
An employee who didn't get their last paycheck can file a claim using TWC's online system. They can also send a wage claim form and supporting documents by fax or regular mail to the Texas Workforce Commission, Labor Law Section, 101 E. 15th Street, Rm 514, Austin, Texas 78778-0001. The TWC's fax number is 512-475-3025.
Processing an Unpaid Wage Claim
When the agency receives the claim, it will send an acknowledgment notice to the person making it, providing an overview of the process. The agency will also notify the employer that someone has filed an employee wage claim and request a response. This notice includes a copy of the claim and any supporting documents that the claimant submitted.
Once the investigation begins, an investigator from the TWC may contact either party for additional information. When the TWC decides on the wage claim, it will contact both parties by mail. If either one disagrees with the outcome, they both have the right to appeal the case.
Michelle Nati is an associate editor and writer who has reported on legal, criminal and government news for PasadenaNow.com and Complex Media. She holds a B.A. in Communications and English from Niagara University.