By Carona                                        S.B. No. 777

      75R2285 JMM-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the authorization of certain deductions from an

 1-3     employee's pay.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Section 61.018, Labor Code, is amended to read as

 1-6     follows:

 1-7           Sec. 61.018.  DEDUCTION FROM WAGES.  An employer may not

 1-8     withhold or divert any part of an employee's wages unless the

 1-9     employer:

1-10                 (1)  is ordered to do so by a court of competent

1-11     jurisdiction;

1-12                 (2)  is authorized to do so by state or federal law;

1-13     [or]

1-14                 (3)  has written authorization from the employee to

1-15     deduct part of the wages for a lawful purpose; or

1-16                 (4)  is authorized to do so for reimbursement under

1-17     Section 61.0185.

1-18           SECTION 2.  Subchapter B, Chapter 61, Labor Code, is amended

1-19     by adding Section 61.0185 to read as follows:

1-20           Sec. 61.0185.  WAGE DEDUCTIONS TO REIMBURSE EMPLOYER.  (a)

1-21     An employer may withhold from any part of an employee's wages

1-22     without written authorization from the employee a sum of money

1-23     equal to the amount necessary to reimburse the employer for:

1-24                 (1)  theft, embezzlement, or other misappropriation by

 2-1     the employee in which the employee received money from the employer

 2-2     without authorization;

 2-3                 (2)  the overpayment of wages or another form of pay to

 2-4     the employee regardless of the reason for the overpayment;

 2-5                 (3)  a loan made by the employer to the employee; or

 2-6                 (4)  a wage advance from the employer to the employee.

 2-7           (b)  An employer may show that a deduction from wages under

 2-8     Subsection (a) is permitted by providing evidence including:

 2-9                 (1)  written documentation;

2-10                 (2)  audio or video recordings; or

2-11                 (3)  testimony given under oath by a person having

2-12     direct knowledge of the circumstances under which the employee

2-13     obtained the funds in question.

2-14           (c)  A deduction from wages to reimburse an employer for a

2-15     loan or wage advance shall be permitted according to the terms of

2-16     any agreement between the employer and employee regarding repayment

2-17     of the loan or advance.  A loan for which the repayment period

2-18     exceeds one year must be evidenced by a written repayment agreement

2-19     signed by the employee or a person legally authorized to sign for

2-20     the employee.

2-21           (d)  Unless a written agreement provides otherwise, an

2-22     employer may deduct from an employee's final paycheck the amount

2-23     of the loan or advance that is unpaid on the employee's separation

2-24     date.

2-25           SECTION 3.  Subchapter B, Chapter 61, Labor Code, is amended

2-26     by adding Section 61.0186 to read as follows:

2-27           Sec. 61.0186.  IMPLIED AUTHORIZATION TO DEDUCT FOR CERTAIN

 3-1     BENEFITS.  (a)  An employee who fails to give written authorization

 3-2     for an employer to make an otherwise lawful deduction from part of

 3-3     the employee's wages of an amount equal to the value of a benefit

 3-4     from the employer is considered to have given the required

 3-5     authorization if the employee:

 3-6                 (1)  retains or does not waive the benefit; and

 3-7                 (2)  remains in the employer's employment following a

 3-8     request by the employer for authorization to make the deduction.

 3-9           (b)  In this section, "benefit" means anything of monetary

3-10     value, other than compensation for personal services, that an

3-11     employee receives from an employer or elects to use by virtue of

3-12     the employee's employment by the employer, including goods,

3-13     services, and expenses not covered by an expense reimbursement

3-14     agreement.

3-15           SECTION 4.  This Act takes effect September 1, 1997, and

3-16     applies only to a claim for wages that arises on or after that

3-17     date.  A claim for wages that arises before the effective date of

3-18     this Act is governed by the law in effect on the date the claim

3-19     arises, and the former law is continued in effect for that purpose.

3-20           SECTION 5.  The importance of this legislation and the

3-21     crowded condition of the calendars in both houses create an

3-22     emergency and an imperative public necessity that the

3-23     constitutional rule requiring bills to be read on three several

3-24     days in each house be suspended, and this rule is hereby suspended.