Texas Payday Law Places Rules on Employers The Federal Fair Labor Standards Act sets a basic framework

for minimum wage and overtime pay, but most states have adopted additional rules on how and when employees receive their pay. One prominent example, and occasional stumbling block for employers, is the Texas Payday Act, which spells out in details employer obligations and employee rights in those areas.

Found in Title 2, Chapter 61 of the states Labor Code, the Texas Payment of Wages Act, more commonly called the Texas Payday Law, took effect in 1990. It requires every private-sector employer to make full payment of earned wages on regularly scheduled paydays. Enforced by the Texas Workforce Commission, which can adjudicate pay disputes, it also requires a conspicuously displayed Texas labor law posters with payday notices in nearly every workplace in the state (government entities, close relatives of a private employer and independent contractors are not covered).

The Texas Payday Law defines wages broadly, to include any form of compensation a worker is due, whether calculated on the basis of time, piecework, number of tasks, or on commission basis or otherwise. It also includes severance pay, vacation or holiday pay, or payments for sick leave or parental leave, but Texas takes a narrower view in this area. In Texas, for such a benefit payment to be owed, it must either be part of a written agreement between the employer and worker, or else part of the employers written policy.

The law requires employers to make at least monthly payments to workers whose duties and salary levels exempt them from the Fair Labor Standards Acts minimum wage and overtime requirements. Other workers must be paid at least twice a month, and employers must ensure each pay period as closely as possible has the same number of days. Employers must publicly notify workers of the payment method and schedule. If the employer fails to designate a pay schedule for FLSA non-exempt workers, the law sets the 1st and 15th of the month as the default dates.

Workers who leave the employer must receive payment in full at least by the next regularly scheduled payday. A worker who has been fired must be paid by six or seven calendar days after being terminated. Cash, check and electronic payment are all acceptable payment methods, but the law specifies steps employers must take before moving to direct deposit payments. The Texas Payday Law also allows an employee to agree in writing to accept whole or partial payment in kind rather than cash, or in other payment forms.

The law restricts an employers ability to take deductions from a workers pay, limiting it to three cases: where a court with proper jurisdiction has ordered it (such as a child-support or alimony order), a state or federal law allows it, or the employee has given written authorization for a partial deduction for a legitimate purpose.

The Texas Payday Law specifies the workers written consent is needed to withhold any part of wages to recoup wage or loans advances, tip credits, furnished meals, lodging or required tools or uniforms, or to offset cash shortages or loss or damage of the employers property. Worker authorizations must clearly indicate a wage deduction is intended, show the specific purpose, and give the worker a reasonable expect of the amount to be withheld.

Under the Texas Payday Law, workers have 180 days to file an unpaid wage claim with the Texas Workforce Commission. The agency investigates and holds hearings on claims, and collects any unpaid wages from the employer. It can also impose administrative penalties on employers who violate the law or employees who file bad-faith claims. Employers who hire intending not to pay wages or fail to make agency-ordered payments could face third-degree felony charges.