State Law > Texas > Texas Wage Payment Law

Texas Wage Payment Law

 

Texas Wage Payment Law

Texas provides Wage Payment Law in the Labor Code, Title 2, Chapter 61 of the Texas Statutes and Code, in the sections below.

  • Sec. 61.001. Definitions
  • Sec. 61.003. Governmental Entities Excluded
  • Sec. 61.011. Paydays
  • Sec. 61.012. Designation of Paydays; Notice
  • Sec. 61.013. Payment Other Than on Payday
  • Sec. 61.014. Payment After Termination of Employment
  • Sec. 61.015. Payment of Commissions and Bonuses
  • Sec. 61.016. Types of payments allowed.
  • Sec. 61.017. Wage payments; Means of delivering pay.
  • Sec. 61.018. Withholding Restrictions.
  • Sec. 61.019. Employer violations - Offense as felony.
  • Sec. 61.020. Failure to Pay Wages; Attorney General Action
  • Sec. 61.031. Bond
  • Sec. 61.053. Bad Faith; Administrative Penalty
  • Sec. 61.063. Payment to Commission; Escrow Pending Review; Waiver
  • Sec. 659.082. Payment Twice a Month
  • Sec. 659.132. Deduction Authorized
  • Sec. 659.202. Payroll Reduction Or Deduction Authorized; Use of Funds.)

Sec. 61.001. Definitions
In this chapter:

(1) "Commission" means the Texas Employment Commission or its designee.

(2) "Day" means a calendar day.

(3) "Employee" means an individual who is employed by an employer for compensation. The term does not include:

(A) a person related to the employer or the employer's spouse within the first or second degree by
consanguinity or affinity, as determined under Chapter 573, Government Code; or

(B) an independent contractor.

(4) "Employer" means a person who:

(A) employs one or more employees; or

(B) acts directly or indirectly in the interests of an employer in relation to an employee.

(5) "Employment" means any service, including service in interstate commerce, that is performed for wages or under a contract of hire, whether written or oral or express or implied. The term does not include any service performed by an individual for wages if it is shown that the individual is free from control or direction in the performance of the service, both under any contract of service and in fact.

(6) "Mail" means to deposit for mailing with the United States Postal Service.

(7) "Wages" means compensation owed by an employer for:

(A) labor or services rendered by an employee, whether computed on a time, task, piece, commission, or other basis; and

(B) vacation pay, holiday pay, sick leave pay, parental leave pay, or severance pay owed to an employee under a written agreement with the employer or under a written policy of the employer.

Sec. 61.003. Governmental Entities Excluded

This chapter does not apply to the United States, this state, or a political subdivision of this state.

Sec. 61.011. Paydays

(a) An employer shall pay wages to each employee who is exempt from the overtime pay provisions of the Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.) at least once a month.

(b) An employer shall pay wages to an employee other than an employee covered by Subsection (a) at least twice a month.

(c) If wages are paid twice a month, each pay period must consist as nearly as possible of an equal number of days.

Sec. 61.012. Designation of Paydays; Notice

(a) An employer shall designate paydays in accordance with Section 61.011.

(b) If an employer fails to designate paydays, the employer's paydays are the first and 15th day of each month.

(c) An employer shall post, in conspicuous places in the workplace, notices indicating the paydays.

Sec. 61.013. Payment Other Than on Payday

An employer shall pay an employee who is not paid on a payday for any reason, including the employee's absence on a payday, on another regular business day on the employee's request.

Sec. 61.014. Payment After Termination of Employment

(a) An employer shall pay in full an employee who is discharged from employment not later than the sixth day after the date the employee is discharged.

(b) An employer shall pay in full an employee who leaves employment other than by discharge not later than the next regularly scheduled payday.

Sec. 61.015. Payment of Commissions and Bonuses

(a) Wages paid on commission and bonuses are due according to the terms of:

(1) an agreement between the employee and employer; or

(2) an applicable collective bargaining agreement.

(b) An employer shall pay wages paid on commission and bonuses to an employee in a timely manner as required for the payment of other wages under this chapter.

Sec. 61.016. Types of payments allowed.

(a) An employer shall pay wages to an employee:

(1) in United States currency;

(2) by a written instrument issued by the employer that is negotiable on demand at full face value for United States currency; or

(3) by the electronic transfer of funds.

(b) An employee may agree in writing to receive part or all of the wages in kind or in another form.

(c) Payment by a written instrument that is not negotiable or for which payment is refused for any reason attributable to the employer does not constitute payment of wages for the purposes of this chapter.

Sec. 61.017. Wage payments; Means of delivering pay.

(a) An employer shall pay wages through a means authorized by this section.

(b) An employer may pay wages by:

(1) delivering them to the employee at the employee's regular place of employment during regular employment hours;

(2) delivering them to the employee at a time and place agreed on by the employer and employee;

(3) sending them to the employee by registered mail, to be received by the employee not later than payday;

(4) delivering them in a manner similar to a manner specified by Subdivision (1), (2), or (3) to a person designated by the employee in writing; or

(5) delivering them to the employee by any reasonable means authorized by the employee in writing.

(c) An employer may elect to pay wages to an employee who maintains at a financial institution an account that qualifies for electronic funds transfer through a direct deposit plan that uses electronic funds transfer to deposit the wages in the employee's account. An employer who desires to pay wages through a direct deposit plan shall:

(1) notify each affected employee in writing, at least 60 days before the date on which the direct deposit payroll system is scheduled to begin, that the employer is adopting a direct deposit payroll system; and

(2) obtain from the employee any information required by the financial institution in which the employee maintains the account that is necessary to implement the electronic funds transfer.

Sec. 61.018. Withholding Restrictions. An employer may not withhold or divert any part of an employee's wages unless the employer:

(1) is ordered to do so by a court of competent jurisdiction;

(2) is authorized to do so by state or federal law; or

(3) has written authorization from the employee to deduct part of the wages for a lawful purpose.

Sec. 61.019. Employer violations - Offense as felony.

(a) An employer commits an offense if:

(1) at the time of hiring an employee, the employer intends to avoid payment of wages owed to the employee; and

(2) the employer fails after demand to pay those wages.

(b) An offense under this section is a felony of the third degree.

Sec. 61.020. Failure to Pay Wages; Attorney General Action

The attorney general may seek injunctive relief in district court against an employer who repeatedly fails to pay wages as required by this chapter.

Sec. 61.031. Bond

(a) The commission may require an employer to deposit a bond if:

(1) the employer is convicted of two violations of this chapter; or

(2) a final order of the commission against an employer for nonpayment of wages remains unsatisfied after the 10th day after the date on which the time to appeal from that final order has expired and an appeal is not pending.

(b) The bond must be:

(1) in an amount approved and considered by the commission as adequate under the circumstances;

(2) payable to the state;

(3) conditioned that the employer, for a period not to exceed 36 months, pay the employees in accordance with this chapter; and

(4) conditioned that the employer pay any sum recovered against the employer under this chapter.

Sec. 61.032. Suit to Enforce Bond Requirement

(a) If an employer fails to deposit a bond required under Section 61.031 before the 11th day after the date on which demand is made for the bond, the attorney general may bring a suit in the name of the state against the employer to furnish the bond or to cease doing business until the employer furnishes the bond.

(b) If the court finds just cause for requiring the bond and that the bond is reasonably necessary and proper to secure prompt payment of the wages of the employees of the employer and the employer's compliance with this chapter, the court may enjoin the employer from doing business until the requirement is met. The injunction may also apply to any other person concerned with or in any way participating in the failure to pay wages resulting in the conviction or in a final order of the commission. The court may make any other order appropriate and necessary to compel compliance with the requirement.

(c) In an action under this section, the employer has the burden of proving that the bond is unnecessary or that the amount demanded by the commission is excessive.

Sec. 61.051. Filing Wage Claim

(a) An employee who is not paid wages as prescribed by this chapter may file a wage claim with the commission in accordance with this subchapter.(b) A wage claim must be in writing on a form prescribed by the commission and must be verified by the employee.(c) A wage claim must be filed not later than the 180th day after the date the wages claimed became due for payment. The 180-day deadline is a matter of jurisdiction.(d) The employee may file the wage claim:

(1) in person at an office of the commission; or(2) by mailing the claim to an address designated by the commission.

Sec. 61.052. Preliminary Wage Determination Order

(a) The commission shall analyze each wage claim filed under Section 61.051 and, if the claim alleges facts actionable under this chapter, shall investigate the claim and issue a preliminary wage determination order:

(1) dismissing the wage claim; or(2) ordering payment of wages determined to be due and unpaid.

(b) If an administrative penalty is imposed under Section 61.053, the preliminary wage determination order must include an order for payment of the penalty.

(b-1) If a wage claim is filed later than the date described by Section 61.051(c), the examiner shall dismiss the wage claim for lack of jurisdiction.

(c) The commission shall mail notice of the preliminary wage determination order to each party at that party's last known address, as reflected by commission records.

Sec. 61.053. Bad Faith; Administrative Penalty

(a) If the commission determines that an employer acted in bad faith in not paying wages as required by this chapter, the commission, in addition to ordering the payment of the wages, may assess an administrative penalty against the employer.

(b) If the commission determines an employee acted in bad faith in bringing a wage claim, the commission may assess an administrative penalty against the employee.

(c) An administrative penalty assessed under this section may not exceed the lesser of:

(1) the amount of the wages in question or claimed; or

(2) $1,000.

(d) In determining the amount of an administrative penalty assessed under this section, the commission shall consider:

(1) the seriousness of the violation;

(2) the history of previous violations;

(3) the amount necessary to deter a future violation; and

(4) any other appropriate matter, including mitigating circumstances.

Sec. 61.054. Request for Hearing on Preliminary Order

(a) Either party may request a hearing to contest a preliminary wage determination order.

(b) The request for hearing must be made in writing not later than the 21st day after the date the commission mails the notice of the preliminary wage determination order.

Sec. 61.055. Preliminary Order Final if Hearing Not Requested

If neither party requests a hearing to contest a preliminary wage determination order within the period prescribed by Section 61.054, the order becomes the final order of the commission for all purposes, and neither party is entitled to judicial review of the order under this subchapter.

Sec. 61.056. Payment Required if Hearing Not Requested

(a) An employer that does not request a hearing within the period prescribed by Section 61.054 to contest a preliminary wage determination order shall pay the amount ordered to the commission not later than the 21st day after the date the commission mails notice of the order. The payment must equal the net amount of outstanding wages after any valid deductions and must include an itemized list of those deductions.

(b) Payment to the commission constitutes payment to the employee for all purposes.

Sec. 61.059. Commission Consideration of Preliminary Wage Determination Order

The commission may modify, affirm, or rescind a preliminary wage determination order.

Sec. 61.061. Notice and Finality of Order

(a) The commission shall mail to each party to the appeal notice of:

(1) the decision;

(2) the amount of wages subject to the order;

(3) the amount of any penalty assessed; and

(4) the parties' right to judicial review of the order.

(b) The notice shall be mailed to a party's last known address, as shown by commission records.

(c) The order becomes final 14 days after the date on which it is mailed unless before that date:

(1) a party to the appeal files a written motion for rehearing; or

(2) the commission reopens the hearing.

Sec. 61.062. Judicial Review

(a) A party who has exhausted the party's administrative remedies under this chapter may bring a suit to appeal the order.

(b) The suit must be filed not later than the 30th day after the date the final order is mailed.

(c) The commission and any other party to the proceeding before the commission must be made defendants in the suit.

(d) The suit must be brought in the county of the claimant's residence. If the claimant is not a resident of this state, the suit must be brought in the county in this state in which the employer has its principal place of business.

(e) An appeal under this subchapter is by trial de novo with the substantial evidence rule being the standard of review in the manner as applied to an appeal from a final decision under Subtitle A, Title 4.

Sec. 61.063. Payment to Commission; Escrow Pending Review; Waiver

(a) Not later than the 30th day after the date a commission order becomes final, the party required to pay wages or a penalty shall:

(1) pay the amount to the commission; or

(2) if the party files a petition for judicial review in a court of competent jurisdiction contesting the final order, send the amount to the commission for deposit in an interest-bearing escrow account.

(b) Unless the party files an affidavit of inability to pay with the clerk of the court within the period specified in Subsection (a), failure to send the amount within that period constitutes a waiver of the right to judicial review.

(c) If after judicial review it is determined that some or all of the wages are not owed or the penalty is reduced or is not assessed, the commission shall remit the appropriate amount to the party assessed the wage payment or penalty, plus the interest accrued on the escrowed amount. Interest under this section shall be paid for the period beginning on the date the assessed amount is paid to the commission and ending on the date the amount is remitted to the party.

Sec. 659.082. Payment Twice a Month

(a) An employee is entitled to be paid employment compensation twice a month if:

(1) the employee is employed by:

(A) the Texas Department of Mental Health and Mental Retardation;

(B) the Texas Department of Transportation;

(C) the Texas Department of Human Services;

(D) the Texas Workforce Commission;

(E) the Department of Public Safety; or

(F) any other state agency designated by the comptroller;

(2) the employee holds a classified position under the state's position classification plan;

(3) the employee's position is classified below salary group A12 under classification salary Schedule A in the General Appropriations Act;

(4) the employing state agency satisfies the comptroller's requirements relating to the payment of compensation twice a month; and

(5) at least 30 percent of the eligible employees of the agency choose to be paid twice a month.

(b) Employees of an institution of higher education as defined by Section 61.003, Education Code, may be paid twice a month at the election of the employing institution of higher education.

Sec. 659.132. Deduction Authorized

(a) A state employee may authorize a deduction each pay period from the employee's salary or wage payment for a charitable contribution as provided by this subchapter.

(b) Except as provided by Subsections (c), (d), and (e), a state employee may authorize a deduction only during a state employee charitable campaign.

(c) A state employee who begins working for the state when a campaign is not being conducted may authorize a deduction according to the comptroller's requirements.

(d) A state employee who works for a state agency that does not allow deduction authorizations under Subsection (i) may authorize a deduction that is effective with the first full payroll period after the agency is converted to a system in which uniform statewide payroll procedures are followed.

(e) A state employee who works for a state agency that does not allow deduction authorizations under Subsection (i) may authorize a deduction after transferring from that agency to:

(1) a state agency that allows deduction authorizations even though it may prohibit them under Subsection (i); or

(2) a state agency not covered by Subsection (i).

(f) A state employee who authorized a deduction while working for a state agency may continue the deduction after transferring to another state agency if the comptroller's rules for continuing the deduction are followed.

(g) An authorization must direct the comptroller to distribute the deducted funds to a participating federation or fund and a local campaign manager as prescribed by rule.

(h) A deduction under this subchapter must be in the form prescribed by the comptroller.

(i) A state agency other than an institution of higher education is not required to permit an employee to authorize a deduction under this subchapter until the first full payroll period after the agency converts to a system in which uniform statewide payroll procedures are followed.

(j) The comptroller by rule may establish a reasonable minimum deduction for each pay period.

Sec. 659.202. Payroll Reduction Or Deduction Authorized; Use of Funds.

(a) An employee of an institution of higher education may authorize in writing a reduction each pay period from the employee's salary or wage payment for the payment of any fee or charge for parking, a parking permit, a transportation pass, or other qualified transportation benefit authorized under section 132(f), Internal Revenue Code of 1986, as amended. An authorization for a reduction under this subchapter by the employee must be voluntary. The institution shall determine which fee or charge an employee may pay under this subsection.

(b) An employee of an institution of higher education may authorize in writing a deduction each pay period from the employee's salary or wage payment for the payment of any fee or charge for parking or for a club membership, recreational sports membership, or similar activity or program. An authorization for a deduction under this subchapter by the employee must be voluntary. The institution shall determine which fee or charge an employee may pay under this subsection.

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