Legal Ease: Texas Payday Law and Terminations

(Last Updated On: September 24, 2013)

By Atty. Derrick King

Knowing the legal ramifications that can positively or negatively impact your business is essential.

With respect to payroll matters, every employer or business owner should be aware of laws that govern the release of final paychecks.

A look at two scenarios:

“It is the middle of the week, at the height of your upswing in work, and one of your most dependable employees has decided to quit and, at the same time, demands their paycheck immediately.”

-or-

“It is the middle of the week, at the height of your upswing in work, and you discover that an issue has developed that prompts you to terminate an employee. Of course, the employee demands his or her paycheck immediately.

What do you do to avoid any undue problems with the former employees over their wages?

Fortunately, in accordance with the Texas Payday Law, in Chapter 61 of the Texas Labor Code, the answers to the foregoing, and other similar, questions have been addressed.

In accordance with the Texas Labor Code § 61.014, the answers are as follows:

Scenario No. 1 – the employee must be paid in full no later than the next regularly scheduled pay period.

Scenario No. 2 – the employee must be paid no later than the sixth day after the date the employee is discharged.

Although a thorough examination of the Texas Payday Law is beyond the scope of this article, suffice it to say that, as an employer in the state of Texas, you cannot afford to operate a business with employees, without carefully considering how this law would affect your business. (Note – the act does not apply to independent contractors or close relatives (as defined by Chapter 573, Texas Government Code)

Remember, it is always prudent to refer legal matters that arise while operating your business, whether employee-related or not, to a legal professional.

The Texas Payday Law is administered by the Texas Workforce Commission.

At their website, www.twc.state.tx.us/ui/lablaw/pdlsum.html,you can get an overview of the regulatory system and a glimpse of the various ways the Payday Law is enforced.

The information provided herein is not intended to replace nor is it a substitute for legal advice.

Legal Ease is a regular column of Empower Magazine designed to provide readers with information on a range of legal matters to consider when owning and operating a business.

Legal Ease: Texas Payday Law and Terminations