1-1 By: Carona S.B. No. 777
1-2 (In the Senate - Filed February 25, 1997; March 3, 1997, read
1-3 first time and referred to Committee on State Affairs;
1-4 March 26, 1997, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 11, Nays 0; March 26, 1997,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 777 By: Carona
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the authorization of certain deductions from an
1-11 employee's pay.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Section 61.018, Labor Code, is amended to read as
1-14 follows:
1-15 Sec. 61.018. DEDUCTION FROM WAGES. An employer may not
1-16 withhold or divert any part of an employee's wages unless the
1-17 employer:
1-18 (1) is ordered to do so by a court of competent
1-19 jurisdiction;
1-20 (2) is authorized to do so by state or federal law;
1-21 [or]
1-22 (3) has written authorization from the employee to
1-23 deduct part of the wages for a lawful purpose; or
1-24 (4) is authorized to do so for reimbursement under
1-25 Section 61.0185.
1-26 SECTION 2. Subchapter B, Chapter 61, Labor Code, is amended
1-27 by adding Section 61.0185 to read as follows:
1-28 Sec. 61.0185. WAGE DEDUCTIONS TO REIMBURSE EMPLOYER.
1-29 (a) Notwithstanding Section 42.001(b)(1), Property Code, an
1-30 employer may withhold from any part of an employee's wages without
1-31 authorization from the employee a sum of money equal to the amount
1-32 necessary to reimburse the employer for:
1-33 (1) misappropriation by the employee in which the
1-34 employee obtained money from the employer without authorization;
1-35 (2) the overpayment of wages or another form of pay to
1-36 the employee regardless of the reason for the overpayment;
1-37 (3) a loan made by the employer to the employee;
1-38 (4) a wage advance from the employer to the employee;
1-39 or
1-40 (5) the reasonable cost to the employer of any benefit
1-41 received or obtained by the employee from the employer that the
1-42 employee failed to authorize the employer in writing to deduct from
1-43 the employee's wages.
1-44 (b) To withhold wages under Subsection (a), an employer must
1-45 show that a deduction from wages under Subsection (a) is permitted
1-46 by providing evidence including:
1-47 (1) written documentation or, if the deduction is for
1-48 a misappropriation under Subsection (a)(1), a written
1-49 acknowledgement from the employee that the employee obtained the
1-50 money without authorization;
1-51 (2) audio or video recordings; or
1-52 (3) testimony given under oath by an eyewitness to the
1-53 circumstances under which the employee obtained the funds in
1-54 question.
1-55 (c) A deduction from wages to reimburse an employer for a
1-56 loan or wage advance shall be permitted according to the terms of
1-57 any agreement between the employer and employee regarding repayment
1-58 of the loan or advance. A loan for which the repayment period
1-59 exceeds one year must be evidenced by a written repayment agreement
1-60 signed by the employee or a person legally authorized to sign for
1-61 the employee.
1-62 (d) Unless a written agreement provides otherwise, an
1-63 employer may deduct from an employee's final paycheck the amount
1-64 of the loan or advance that is unpaid on the employee's separation
2-1 date.
2-2 (e) An employer making a deduction from wages under this
2-3 section must provide written notice to the employee of the reason
2-4 for each deduction. The notice must be delivered to the employee
2-5 not later than the scheduled payday for the wages from which the
2-6 deduction is to be made.
2-7 (f) An employer that makes a deduction from wages that is
2-8 not in accordance with the requirements of this section or Section
2-9 61.018 is subject to an administrative penalty under Section
2-10 61.053.
2-11 (g) In this section, "benefit" means anything of monetary
2-12 value, other than compensation for personal services, that an
2-13 employee requests and obtains from an employer and elects to
2-14 retain.
2-15 SECTION 3. This Act takes effect September 1, 1997, and
2-16 applies only to a claim for wages that arises on or after that
2-17 date. A claim for wages that arises before the effective date of
2-18 this Act is governed by the law in effect on the date the claim
2-19 arises, and the former law is continued in effect for that purpose.
2-20 SECTION 4. The importance of this legislation and the
2-21 crowded condition of the calendars in both houses create an
2-22 emergency and an imperative public necessity that the
2-23 constitutional rule requiring bills to be read on three several
2-24 days in each house be suspended, and this rule is hereby suspended.
2-25 * * * * *