Texas Payday Law Basics - Are You in Compliance?

All Texas business entities, regardless of size, are covered by the Texas Payday Law.

Employers must have pay day information posted for employees near / with Federal Employment posters. It's best to post in the employee break room or next to the clock in / clock out stations. Make sure to also have pay frequency (weekly, bi-weekly, semi-monthly) and other pay related information in your company handbooks for your employees to reference.

The most common question employers have is when to pay a terminated employee. There are two basic scenarios:

1. Employees who are terminated by the employer must be paid within six (6) calendar days following the date of their termination. 
2. Employees who resign / voluntarily quit must be paid their final pay earned / due to them on their next regularly scheduled payday. 

The second most common question is what can and cannot be deducted from an employees paycheck. Its very simple if you follow this basic rule:

• Deductions are allowed if authorized by law or by court order or 
• Authorized by the employee in writing and in advance (before deduction is made) 

WARNING: Directly from TWC Texas Payday Law Summary "If the Commission determines that an employer acted in bad faith in not paying wages as required by the statute, the Commission may assess an administrative penalty against the employer in the amount of the wages claimed or $1,000, whichever is lesser. Penalties in the same amount may be assessed against an employee who files a wage claim in bad faith." (http://www.twc.state.tx/ui/lablaw/pdlsum.html)

TrendHR offers clients various Quick Tips and Trains over major topics such as Pay Day Laws. Contact TrendHR today to see how we can help you become and maintain compliance at 866-582-1578.