What are Considered as Illegal Payroll Deductions in Texas?

Experienced Labor Attorneys Helping You Navigate Payroll Deductions 

It is not uncommon for both employees and employers to be unaware of their exact rights and responsibilities concerning payroll deductions. With any paycheck, circumstances can arise where unlawful deductions have been made. But not all paycheck deductions are illegal. Whether you are an employee, concerned that unlawful deductions have been taken from your pay, or an employer trying to navigate the extent of your responsibilities with payroll deductions, our experienced team of Texas wage and hour dispute attorneys at Galo Law Firm can help.

There are instances where an employer has the right to deduct from an employee’s pay, but if typically that payment has been deducted unbeknownst to an employee it’s likely a violation of their workers’ rights.

At Galo Law Firm we have worked in employment cases for over 30 years. Our legal team is not only highly experienced but professional, knowledgeable, and capable of defending your rights. If you have doubts concerning unlawful deductions our legal team can simplify the complexities of payroll deductions to help you understand your rights. Get in contact with our labor law law firm today, and an experienced FLSA lawyer can start reviewing your case.

Contact us at 210-361-8043 today!

What are employees’ rights to wages?

Texas employees are entitled to:

  • Correct pay regardless of immigration status.
  • Minimum wage and overtime. (The current minimum wage in Texas is $7.25 an hour. Variations of these rules may apply to workers who receive a large source of tips or people under the age of 20).
  • A written earnings statement, also known as a pay stub. A pay stub is required regardless if an employee is paid through check or cash. An earnings statement must include: total hours and days worked throughout the pay period, any deductions, net wage, full name, and the full name and address of the employer.
  • Receiving pay for all time spent towards work, including time spent cleaning up, waiting, reporting, or traveling. If you are required to travel for work, the time spent traveling must be factored into your working hours.

Payroll Deductions Explained

The Texas Payday Law requires that the majority of deductions have written authorization from the employee. Generally, an employer is unauthorized to deduct from an employee’s wages except in the case that the deduction is mandated by law.

Deductions that do not require the employee’s written authorization can include payroll taxes, court-ordered garnishments, and deductions required by state or federal law.

Employers are required to follow all court-ordered garnishments and wage deductions such as bankruptcy garnishments, court-ordered child support or spousal support, IRS tax levies, and student loans. An employer is permitted to add a $10 administrative fee per month for child support and student loan deductions, as well as a$5 fee for spousal support.

Common deductions that do require authorization can stem from employee meals, accommodation, tip credits, wage advances, uniforms, uniform cleaning expenses, and cash shortages because of misappropriation. An employer can not make deductions for tools, supplies, job-related physicals, or medical appointments unless the employee agrees in writing. An employee may have consented by signing an employee handbook or hiring papers.

If an employer fails to obtain written permission, the deduction is invalid. In certain cases, an employee may authorize a deduction, but the deduction violates minimum wage standards or other laws that define the extent of legitimate deductions.

Typically, wage deductions cannot push an employee’s pay under minimum wage. Yet, this can vary in cases where an employee agrees through written authorization and is in compliance with the Fair Labor Standards Act. Deductions involving court-ordered garnishments or income tax withholding are capable of putting an employee’s pay below minimum wage.

Frequently Seen Deductions

Both the Fair Labor Standards and Texas Payday Law have set standards for workers’ payment rights, including minimum wage, overtime pay, and any payroll deductions. A payroll deduction can result in an employee’s wages falling below the minimum wage standards. Depending on the case, the Texas Workforce Commission may permit the deduction without a penalty to the employer or the case may summon a violation.

Legitimate Payroll deductions include:

Tipped Employee’s

In Texas, tipped employees who regularly earn a minimum of $30 a month in tips can be subject to a tip credit deducted from their employer. In Texas, tipped employees may receive only $2.13 an hour, which accounts for a $5.12 deduction from the paying minimum wage. Tip credit deductions assume that tips will make up the difference between the actual amount earned and the current minimum wage. These deductions are authorized by both Texas payday Law and federal law. All tips must be retained by the employee. In many cases, a tip pool can be an approved way of distributing tips among co-workers. It is important to note that a tip credit cannot exceed the amount of the tips you receive, otherwise, it’s considered an improper deduction.

Employee Meal, Accommodations, and Other Facilities

An employer can be permitted to deduct from employees’ wages for meals, accommodation, and other amenities considered as a payment. Deductions of this nature must first be authorized in writing by the employee. According to the Fair labor standards act, a reasonable cost can be deducted from employees’ wages for such amenities as long as the employer is not profiting from it.

Loan or Advanced Pay

If an employee requests a loan or a wage advance, the cost may put them below the minimum wage. A deduction for a loan or advanced pay should not include any interest or administrative fees. Under Texas payday law, such a deduction must have authorization from the employee in writing. Paid vacation time also works under this principle, requiring the employee’s written consent


The instances in which your employer can deduct for uniforms and uniform cleaning costs are limited and complex. Only the reasonable cost of uniforms and cleaning expenses may be deducted. It can be mandatory to purchase clothes that adhere to a dress code, which may put an employee’s pay below minimum wage. Yet, the cost of any company-branded clothes cannot put employees´ pay under minimum wage.

Cash Shortages

When employees consistently handle cash, they may come up short at the end of a shift. Legally, an employer is allowed to reclaim the amount lost through a payroll deduction. It must be proven that the employee was directly responsible for the unaccounted money.

Voluntary Deductions

An employee may consent to a deduction from their pay to repay a loan such as advanced pay or vacation pay. Voluntary wage assignments may be deducted for contributions to retirement plans or deductions for health insurance, and because it is voluntary it differs from a garnishment. These deductions will be valid even if the employee’s wages fall below minimum. However, if the employer prompts the deduction without employee authorization it can be considered an FLSA violation.

Union Dues

An employee can deduct union dues from an employee’s wages even if it causes their pay to fall below minimum wage, yet the employee must consent in writing before the deduction.

Keep a Record

For both employees and employers, it is crucial to keep a record of all hours worked and amounts paid. For employees, we suggested keeping all earning statements and pay stubs.

If you are an employee who is frequently paid in cash, record the date and amount of each payment. We recommend that employees obtain the name, address, and phone number of the company and managers they work for. It’s essential to regularly review written earning statements to confirm that all deductions are legal.

Consult with an employment attorney at Galo Law Firm

Regardless if you are an employer or employee with payroll deductions concerns, Galo Law Firm can help you understand the extent of your legal rights and responsibilities.

At Galo Law Firm, we specialize in Texas employment law and have 30 years of experience on both sides of these disputes. We understand the stress that arises when facing an unlawful payroll deduction and offer our most knowledgeable lawyers to handle your case quickly and smoothly as possible.

Galo Law Firm has a strong record of success in representing clients in the state of Texas. Our employment attorneys are experienced in working with the courts, judges, and employers across the state, along with the Texas Workforce Commission.

If you have any concerns over potential illegal payroll deductions, Galo Law Firm can help. Contact our law office for an initial consultation today, Call 210-361-8043.

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