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Final Paycheck and Payroll Laws
Not Paid Your Final Paycheck on Time?
When your employment ends, the deadline for your employer to pay your final paycheck can vary based on the state where you were employed. In Texas, if you resign, the employer must pay you by the next regularly scheduled payday. However, if your employment (in Texas) is terminated by the employer, the employer must pay you no later than the sixth day after the end of your employment.
If the employer does not pay you the final paycheck by the required payday, it is generally a violation of the Fair Labor Standards Act (“FLSA”) minimum wage law in addition to other laws. The employer may have to pay the employee $14.50 for each hour worked in the pay period that would have been covered by the final paycheck plus legal fees and costs when the employee is not paid on time. Even in situations where the employer comes to their senses and pays the full wages owed, but does so after the payday for those wages, the employer still generally has to pay liquidated damages of $7.25 per hour times all hours worked in the subject pay period plus legal fees and costs. The FLSA is clear that a failure to pay by the payday is considered a failure to pay, so the penalties of the FLSA are triggered even if the employer later pays the employee some or all of the straight time wages owed.
Employer Taking Money from Your Paycheck?
Some employers attempt to take money from an employee’s final paycheck for alleged equipment/property damages or money supposedly owed to the employer. However, where the employer withholds money from the last paycheck, the FLSA’s minimum wage provisions and other payroll laws may be violated – it depends on the facts.
Courts have held that where employers withhold the entire paycheck to pay for alleged damage to the employer’s equipment, property, or vehicle, the FLSA minimum wage law is violated. Even if the employee is at fault for the damage, the employer cannot withhold the final paycheck without violating the FLSA. Where that happens, the employee may be entitled to double the minimum hourly wage for all hours worked in the workweek or workweeks covered by the final paycheck plus legal fees and costs.
Even where the employer and employee have a wage deduction agreement for the allegedly damaged equipment, property, or vehicle, the FLSA’s minimum wage provisions cannot be waived. This means that, even after the deductions per the agreement, the non-exempt employee must still be paid at least $7.25 per hour worked in the corresponding pay period. If the deductions drop the hourly wage below $7.25 per hour, then the FLSA is generally violated even if there was an agreement between the employer and employee for those deductions. The employer may be liable for the difference between the wages paid and the minimum wage rate, liquidated damages for the FLSA violation, legal fees, and costs.