Skip to main content

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. 

Comments

Popular posts from this blog

NLRB: Discussion Among Employees About Tip Pooling is Protected Concerted Activity

  This Advice Memorandum from the National Labor Relations Board’s Associate General Counsel, Jayme Sophir, addressed whether employees which discussed and complained about tip pooling at work constituted protected concerted activity. In relevant part, an employer in New York operated a chain of steakhouses.  While tip pooling was in place at these steakhouses, some of the employees objected to it on the grounds that it was not transparent and improperly divided tips among the workers.  Employees were told not to complain or talk to each other about the tip pool and were told that doing so would endanger their jobs.  Despite the employer later attempting to provide some clarity as to how the tips were being divided, rancor still existed among some employees.  At one point, the employees were told by a general manager that some employees that had been talking about the tip pool were “cleared out” and the employer would continue to do so. In the Advice Memorandum,...

Utah Non-Compete Bill Falters in House

Last month, a non-compete bill sponsored by Representative Brian Greene (Republican from Pleasant Grove) & up for vote in the Utah House failed to make it through the Legislature.  The bill sought to ban enforcement of non-competes if they came after a worker was already employed, given no compensation (such as a bonus or promotion) for signing the non-compete, and laid off within six months.  However, by a 22 - 49 vote, the bill was resoundingly defeated after some business groups lobbied to kill the non-compete bill.  One group in particular, The Free Enterprise Utah coalition, argued that the Utah State Legislature should hold off on any changes to non compete laws in the state until a survey about non competes was done among Utah businesses.  Representative Greene had countered this claim and argued that a survey was not needed to show that the current non compete laws in the states allowed many businesses, including some small high tech companies i...

What I've Been Reading This Week

Recently, Equal Employment Opportunity Commission Commissioner, Chai Feldblum, had her re-nomination on the brink, after Utah Republican Senator Mike Lee took steps to block it .  Readers might have heard that late last week, Commissioner Feldblum's re-nomination quietly slipped away and she tweeted out a thank you to supporters and friends, acknowledging that her time at the EEOC was over.  While there has not been much in the way of a further update in regard to that ongoing saga, we wait to see how things will play out at the EEOC, now that it has lost a quorum until additional Commissioners are confirmed by the Senate. For the time being, there are other developments for readers to review this week.  In particular, I call attention to the article on managing a wage & hour audit by the Department of Labor as well as steps an employer can take to better ensure compliance with the ADA. As always, below are a couple articles that caught my eye this week. ...