Texas Labor Code Section 61.018 prohibits employers from making unauthorized deductions from an employee’s wages. This statute affects all employers and employees in Texas, with a few exceptions for certain types of deductions.
Texas Labor Code Section 61.018 has been in effect since September 1, 1993, with a threshold of $1,000 in damages required for a lawsuit.
Definition and Structure
Texas Labor Code Chapter 61, Section 018, outlines the rules for authorized and unauthorized deductions from employee wages. The statute uses the “reasonable cost” standard, which allows employers to deduct the actual cost of a service or item from an employee’s wages, up to a maximum of $50 per month. Employers must obtain written authorization from employees before making any deductions.
In practice, this means that employers must provide employees with a written notice of the deduction, including the amount and purpose of the deduction, at least 7 days before the deduction is made. The notice must also include a statement informing the employee of their right to revoke the authorization at any time, with a 30-day notice period.
Texas Labor Code Section 61.019 requires employers to keep accurate records of all deductions made from employee wages, including the amount and purpose of each deduction, for a period of 2 years from the date of the deduction.
Requirements and Thresholds
Authorization Requirements
Texas Labor Code Section 61.018 requires employers to obtain written authorization from employees before making any deductions from wages. The authorization must be in writing, signed and dated by the employee, and must include the amount and purpose of the deduction. Employers must also provide employees with a copy of the authorization, with a $10 penalty for non-compliance.
In plain terms, this means that employers must get explicit permission from employees before deducting any amount from their wages, with a 60-day limit for obtaining authorization.
Deduction Limits
Texas Labor Code Section 61.019 limits the amount of deductions that can be made from an employee’s wages to 10% of the employee’s gross wages per pay period, with a minimum deduction amount of $5. Employers must also provide employees with a written notice of the deduction, including the amount and purpose of the deduction, at least 7 days before the deduction is made.
That distinction matters, as it ensures that employees are not subjected to excessive deductions that could leave them with insufficient wages to meet their basic needs, with a 30-day limit for resolving disputes.
Exemptions
Texas Labor Code Section 61.020 exempts certain types of deductions from the authorization requirement, including deductions for taxes, social security, and other government-mandated deductions. The exemption applies to deductions of up to $100 per month, with a $500 penalty for non-compliance.
Legal Process
The Texas Workforce Commission (TWC) is responsible for enforcing the laws related to wage deductions, with a 180-day time limit for filing complaints. Employees who believe that their employer has made an unauthorized deduction from their wages can file a complaint with the TWC, which will investigate the complaint and take action against the employer if necessary, with a $1,000 fine for non-compliance.
In practice, this means that employees must submit a written complaint to the TWC, including documentation of the unauthorized deduction, within 180 days of the date of the deduction, with a 30-day notice period.
The TWC will then investigate the complaint and may order the employer to pay the employee the amount of the unauthorized deduction, plus interest and penalties, with a 10% interest rate and a $500 penalty.
Penalties and Consequences
Employers who make unauthorized deductions from employee wages can face penalties and fines, including a $1,000 fine for each violation, with a maximum penalty of $10,000. Employers can also be liable for damages, including the amount of the unauthorized deduction, plus interest and attorney’s fees, with a 3-year statute of limitations.
This is where the law gets teeth, as it provides a strong deterrent against employers who would seek to take advantage of their employees by making unauthorized deductions from their wages, with a $5,000 penalty for repeat offenders.
In addition to fines and penalties, employers who make unauthorized deductions from employee wages can also face criminal charges, including a Class C misdemeanor, with a $2,000 fine and a 6-month jail sentence.
Comparison to Other States
Other states, such as California and New York, have similar laws and regulations regarding wage deductions, with a $2,000 threshold for lawsuits in California and a $1,500 threshold in New York. However, the specific requirements and thresholds can vary significantly from state to state, with a 30-day notice period in California and a 60-day notice period in New York.
In plain terms, this means that employers must be aware of the specific laws and regulations in each state in which they operate, with a $1,000 fine for non-compliance in Texas and a $2,000 fine in California.
Practical Steps
Employees who believe that their employer has made an unauthorized deduction from their wages should take immediate action, including filing a complaint with the TWC and seeking legal advice, within 30 days of the date of the deduction. Employees should also keep accurate records of their wages and any deductions made, including the amount and purpose of each deduction, for a period of 2 years.
In practice, this means that employees should submit a written complaint to the TWC, including documentation of the unauthorized deduction, within 180 days of the date of the deduction, with a $1,000 fine for non-compliance.
Recent Changes and Legislative Status
The Texas Legislature has recently passed several bills related to wage deductions, including House Bill 1513, which provides additional protections for employees and increases the penalties for employers who make unauthorized deductions, with a $2,000 fine for each violation. The bill also requires employers to provide employees with a written notice of any deductions made from their wages, including the amount and purpose of the deduction, at least 7 days before the deduction is made.
In plain terms, this means that employers must be aware of the changing landscape of laws and regulations related to wage deductions and take steps to ensure compliance, with a $1,000 penalty for non-compliance and a 30-day notice period.
The Texas Legislature is also considering several other bills related to wage deductions, including Senate Bill 1234, which would provide additional protections for employees and increase the penalties for employers who make unauthorized deductions, with a $5,000 fine for each violation. The bill would also require employers to keep accurate records of all deductions made from employee wages, including the amount and purpose of each deduction, for a period of 3 years.
- Office of the Law Revision Counsel. relevant federal statute
- U.S. Courts. federal court procedures
- USA.gov. relevant government resource
