San Antonio Employment Law Blog

Can a Texas Employer Deduct from an Employee’s Pay for Violating Company Rules?

Sometimes employees and employers in Texas are not fully aware of their rights and responsibilities regarding deductions from wages. For example, there may be confusion as to whether an employer has the right to deduct wages when an employee violates company rules.

The Texas Labor Code — and particularly the Texas Payday Law — clarifies when deductions are allowed. Employers and employees should be aware that this law applies to private business entities of all sizes.

The law requires written authorization in order for an employer to make a payroll deduction.

In general, an employer is not permitted to deduct from an employee’s wages unless the deduction is authorized by law, such as with court-ordered child support or state or federal taxes. However, if an employee agrees in writing to have wages deducted for a lawful purpose, then deductions are permitted.

For example, an employer who loans money to an employee may deduct wages from the employee’s paycheck to collect on the loan, but only if the employee authorizes that arrangement in writing. In other words, an oral agreement is not enough to allow the employer to deduct from the employee’s paycheck, and a deduction based on an oral agreement may be the subject of an unpaid wage claim.

The Texas Payday Law does not permit an employer to automatically withhold pay when an employee breaks company rules.

A company rule violation alone is not legal grounds for an employer to deduct from an employee’s paycheck, and an employee may bring an unpaid wage claim if an employer deducts wages for a rule violation.

However, if the employee has agreed to such a deduction in writing, then the employer may have grounds to withhold payment in order to recoup the loan.

Go with an employment law attorney who knows both sides of Texas labor law.

Whether you are on the employee side or the employer side of a wage dispute, it is essential to understand your legal rights and responsibilities. Representation and guidance from an employment law attorney with experience on both sides of these disputes can go a long way in protecting your interests.

The Galo Law Firm, P.C., specializes in Texas employment law, and we have a strong record of success in representing clients in the San Antonio area, as well as further south in the areas of Laredo and McAllen. Please see our previous post on both sides of labor disputes to learn more.

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