The time a Texas employer has to pay their employees their final paycheck depends on the circumstances surrounding the employee’s separation. There is no federal employment law that mandates an employer provide their employee with their last paycheck immediately; however, the Texas Payday Law provides employers with specific requirements.
Texas Payday Law governs all Texas businesses regardless of their size, excluding employers at the federal, state, and political subdivision level. Anyone who performs a service for compensation is an employee, except independent contractors and close relatives of the employer. Typically, unless there is a written agreement, employers must pay their employees in United States currency and deliver them their funds directly during working hours or through direct deposit. Employees have 180 days from the date their wages were due to file a claim for unpaid wages with the Texas Workforce Commission.
When an employee quits or is constructively discharged from their employment, the employer must pay him or her their final wage by the next regular payday. In instances where an employee receives paychecks on a monthly cycle, they must wait until the next month’s due date to obtain their final wage. If an employer terminated an employee, either by firing or laying them off, the employer must pay the employee within six days of their discharge.
In addition to regular wages, employees may be entitled to commissions or bonuses. Texas employers do not have to fast-track these payments. The law permits employers to pay their employees these benefits on their regular pay date, which may be several months or years away. However, an exception exists if the employee and employer entered a contractual agreement that includes an acceleration clause.
Employers may face liability if they unlawfully delay a final payment to their employee. This may occur when the employer does not have the funds to pay their employees their wages. This situation can result in a lengthy legal process that may include placing a lien on the employer’s assets or asserting rights during bankruptcy proceedings. Further, sometimes an employer may delay final wages as a form of retribution against the employee. Employers are not permitted to hold payments in an attempt to punish their former employees.
Finally, employers may withhold wages if they are using the paycheck as collateral. For example, an employer may withhold payments until the employee returns a company computer. Employers can require employees to agree to certain things, such as replacing or returning company equipment, before termination, but they cannot delay payment. If an employee violates the agreement, the employer must still pay the employee at least minimum wage until the agreement is complete.
Has a Texas Employer Withheld Your Final Paycheck?
If your Texas employer is withholding your final paycheck, you should contact the dedicated Dallas employment lawyers at our firm, Rob Wiley, P.C. We can assist you in determining your rights and remedies regarding the benefits to which you are entitled. Contact our office at 214-528-6500 to schedule a consultation with one of our Dallas employment lawyers.