SRC-JFA S.B. 777 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 777
By: Carona
State Affairs
3-5-97
As Filed


DIGEST 

Currently, Texas law prohibits certain deductions by an employer from an
employee's wages if such deductions are not specifically authorized by the
employee in writing, unless the deductions are for payroll taxes or made
as the result of a court order.  This bill would authorize an employer to
deduct from an employee's wages money that corresponds to proceeds of
misappropriation by an employee, wage and salary overpayments, loans, and
wage and salary advancements without having to obtain a written
authorization for the deduction from the employee.   

PURPOSE

As proposed, S.B. 777 authorizes an employer to deduct from an employee's
wages certain expenses to reimburse the employer.   

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 61.018, Labor Code, to prohibit an employer from
withholding or diverting any part of an employee's wages unless the
employer, among other options, is authorized to do so for reimbursement
under Section 61.0185.  Makes conforming changes.  

SECTION 2. Amends Chapter 61B, Labor Code, by adding Section 61.0185, as
follows: 

Sec. 61.0185.  WAGE DEDUCTIONS TO REIMBURSE EMPLOYER.  Authorizes an
employer to withhold from any part of an employee's wages without written
authorization from the employee a sum of money equal to the amount
necessary to reimburse the employer for theft, embezzlement, or other
misappropriation by the employee in which the employee received money from
the employer without authorization; the overpayment of wages or another
form of pay to the employee regardless of the reason for the overpayment;
a loan made by the employer to the employee; or a wage advance from the
employer to the employee.  Authorizes an employer to show that a deduction
from wages is permitted by providing certain evidence.  Requires a
deduction from wages to reimburse an employer for a loan or wage advance
to be permitted according to the terms of any agreement between the
employer and employee regarding repayment of the loan or advance.
Requires a loan for which the repayment period exceeds one year to be
evidenced by a written repayment agreement signed by the employee or a
person legally authorized to sign for the employee. Authorizes an employer
to deduct from an employee's final paycheck the amount of the loan or
advance that is unpaid on the employee's separation date unless a written
agreement provides otherwise.  

SECTION 3. Amends Chapter 61B, Labor Code, by adding Section 61.0186, as
follows: 

Sec. 61.0186.  IMPLIED AUTHORIZATION TO DEDUCT FOR CERTAIN BENEFITS.
Provides that an employee who fails to give written authorization for an
employer to make an otherwise lawful deduction from part of the employee's
wages of an amount equal to the value of a benefit from the employer is
considered to have given the required authorization  if the employer
retains or does not waive the benefit, and the employer remains in the
employer's employment following a request by the employer for
authorization to make the deduction.  Defines "benefit."  

SECTION 4. Effective date: September 1, 1997.
  Makes application of this Act prospective.

SECTION 5. Emergency clause.