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Withholding
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Withholding
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A departing employee owes the company money. Of course we can't withhold it from their final paycheck, but what about an expense check or out of unused vacation (if paid separate from the paycheck)?
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Forums » Topic Forums » Legal Forum » Withholding
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Withholding
posted at 7/7/2010 5:18 PM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
What documentation do you have regarding the owed amount? Did the employee sign anything acknowledging the amount?
What is the amount owed for? http://www.twc.state.tx.us/news/efte/allowable_deductions.html From the Texas Employers Handbook by the TWC "To the extent that a deduction for a miscellaneous cost to the employer does not violate the minimum wage laws, an employer is allowed to make such a deduction as long as the employee has authorized it in writing in accordance with the Texas Payday Law." http://www.twc.state.tx.us/news/efte/deduction_problems_under_tpl.html As for whether it could come from an expense check or vacation pay, that's not as black and white. If your company policy states vacation pay will be paid at termination, it would fall under the Payday/Wage laws. "Little known to many employers and employees, the Texas Payday Law includes in the definition of "wages" any fringe benefits promised in a written policy of the employer or in a written agreement (section 61.001(7)(B)). The types of fringe benefits covered by that provision are vacation pay, sick leave pay, parental leave pay, holiday pay, and severance pay. The good news is that the law will enforce such fringe benefit payments according to the terms of the written policy or agreement. For example, if there are conditions on use of leave or receipt of severance pay, those conditions will be observed. Thus, whatever the employer has taken care to provide in the policy or agreement is what will be enforced, assuming that the employer has put down exactly what it wants to happen under the policy." from http://www.twc.state.tx.us/news/efte/fringe_benefits.html I think you would have more leeway under taking the owed amt from an expense check -- but it would go back to the above statement -- what is your written policy on reimbursing expenses. They might actually fall under the definition of wages. |
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Withholding
posted at 7/7/2010 5:20 PM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
I meant to add that your best bet is often small claims court if you can prove that the amount is owed. If you withhold any type of wages, you are setting yourself up for a wage claim. Which may or may not open a whole can of worms that you would rather not. |
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Withholding
posted at 7/8/2010 4:13 AM EDT
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Posts: 24
First: 1/25/2005 Last: 4/1/2011 |
For the future, enact a new policy saying that all materials will be returned before departure, or ABC company is authorized to deduct the cost of the materials from their final paycheck. If everyone signs that, then you ARE allowed to withhold the funds from their final paycheck. |
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Withholding
posted at 7/8/2010 4:26 AM EDT
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Posts: 237
First: 7/10/2007 Last: 8/31/2011 |
THX Rupert. The amount owed is for a purchase of merchandise (through payroll deduction) and the employee did sign a repayment agreement with a "balance due on separation" clause. I have however, considered such statements as moot when they conflict with law.
I was not aware of the Fringe Benefits provision of the TPL, thanks for the link. It makes sense that under this clause vacation would be considered wages since it is our practice to payout upon separation. I was hoping that expense reimbursement might be an avenue to recover some of the loss. It's a contentious separation with the employee refusing to return keys , credit cards and such, so court may be our only option. THX |
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Withholding
posted at 7/8/2010 7:17 AM EDT
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Posts: 24
First: 1/25/2005 Last: 4/1/2011 |
Ours was drafted by our lawyers, so I'm not worried. It's mostly about laptop computers, and leave that is used before it's actually accrued, since at the beginning of the FY we give everyone their leave for the entire year. It's never (knock on wood 2Xs) actually been an issue, our lawyer just wanted us to take the precaution. |
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