Payment of Wages: Texas

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor

Summary

• The term wages is extensively defined in the Texas wage payment law. See Definition of Wages.
• Texas employers may pay wages in cash, by written instrument that is negotiable on demand at full face value for US currency, or by direct deposit or paycard. Penalties are imposed for noncompliance. See Wage Payment Methods.
• Different pay frequency rules apply to exempt and nonexempt employees. Penalties are imposed for violations. See Pay Frequency.
• Employers may deduct amounts from employees' wages only under three circumstances. Employers may recoup a wage advance from an employee's next paycheck following the advance under two conditions. Certain deductions may not be made from the wages of temporary employees. Penalties are imposed for violations. See Permitted and Prohibited Wage Deductions.
• At the end of each pay period, employers must give each employee a written earnings statement covering the pay period that shows six specific elements. Pay statements may be provided in any form the employer chooses. Texas employers must notify their employees of the federal Earned Income Credit no later than March 1st of each year. See Pay Statement Requirements.
• How soon employees must be paid their final compensation after termination depends on whether the termination is voluntary or involuntary. Special rules apply to commissions, bonuses and accrued benefits. Penalties are imposed for noncompliance. See Final Pay.
• The Texas Workforce Commission advises that employers may pay final wages of deceased employees to individuals who present letters testamentary or letters of administration, or the surviving spouse, as applicable. See Deceased Employee Wages.
• Wages that are unclaimed for one year are considered abandoned property. Employers must complete two forms and follow specific notice requirements. See Unclaimed Wages.