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An Employee Leaves the Company - Handling the Final Paycheck in Texas



Most employers will face a time when an employee leaves the company, whether it be voluntary or involuntary.  Each state handles how the former employee is to receive their final paycheck differently.  This particular note focuses on the law in Texas.
Voluntary

The Texas Payday Law requires that when an employee quits, retires, resigns, or otherwise leaves employment voluntarily, the final pay is due on the next regularly-scheduled payday following the effective date of resignation.  

As a result, if a company has paydays on the 1st and 15th of each month, if an employee quits on February 5, the employer can pay that employee the final pay check on the next regularly-scheduled payday, in this case, February 15.

 Involuntary 

However, in the case of involuntary termination such as a discharge, termination, layoff, "mutual agreement," and resignation in lieu of discharge, the employer has six calendar days from the effective date of discharge to give the employee the final paycheck.  If the sixth day falls on a day on which the employer is normally closed for business, the employer may wait until the next regular workday to give the employee the final check.   

Take the above example:  if the company terminates the employee on February 5, the employer must pay that employee its final pay check no later than February 11.  If February 11 fell on a Saturday or Sunday (when the employer was closed), the final pay check must be given to that employee the next business day, likely the Monday following the office being closed.
Employers need to be aware of this distinction or risk a potential suit by a former employee.  While these types of distinctions are easy enough to remember and should be in an employer's handbook or HR resource binder, these are the type of issues that can lead to easily avoidable litigation. 

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