Texas Payday Law: Pay Frequency, Timing, and Final Pay Rules

The Texas Payday Law (Chapter 61 of the Texas Labor Code) is the primary state statute governing when and how Texas employers must pay their employees. While Texas is broadly considered employer-friendly — with no state income tax and minimal labor regulations compared to states like California — the Payday Law does impose specific requirements on pay frequency, timing, and especially final pay at separation. Violating these rules can lead to wage claims filed with the Texas Workforce Commission (TWC), administrative penalties, and even triple damages for certain willful violations. This guide covers every aspect of the Texas Payday Law that small business owners need to understand.

Pay Frequency Requirements

The Texas Payday Law establishes minimum pay frequency standards based on whether an employee is exempt or non-exempt under the FLSA:

• Non-exempt employees: Must be paid at least twice per month (semi-monthly). This is the minimum frequency. Employers may choose to pay weekly or biweekly, which is more frequent and fully compliant.
• Exempt employees (executive, administrative, or professional under FLSA): May be paid once per month. Monthly pay is only permitted for employees who are properly classified as exempt.

The permitted pay frequency options in Texas are:

• Weekly: 52 pay periods per year. Common in construction, manufacturing, and hourly retail.
• Biweekly: 26 pay periods per year. Very common across industries.
• Semi-monthly: 24 pay periods per year (e.g., the 1st and 15th of each month). The minimum required frequency for non-exempt employees.
• Monthly: 12 pay periods per year. Only permitted for exempt employees.

Designated Paydays and Timing

Texas law requires employers to designate paydays in advance and notify employees of the designated paydays. Under Texas Labor Code Section 61.012, an employer must:

• Post a notice in the workplace showing the employer's designated paydays.
• If the employer does not designate paydays, the default paydays are the 1st and 15th of each month.

Unlike California, Texas does not specify a maximum number of days between the end of a pay period and the date wages must be delivered. However, the common practice — and the TWC's expectation — is that wages are paid within a reasonable time after the pay period closes, typically within 7-10 days.

Employers may change designated paydays, but they must provide employees with advance notice of the change. The TWC does not specify a minimum notice period, but reasonable notice (at least one full pay cycle) is recommended to avoid confusion and potential wage claims.

Final Pay: Involuntary Termination

When an employer terminates an employee — whether for cause, layoff, restructuring, or any other reason initiated by the employer — the final paycheck is due within 6 calendar days of the date of discharge. This is set out in Texas Labor Code Section 61.014.

Key details about involuntary termination final pay:

• Deadline: 6 calendar days from the date of termination (not business days — calendar days, including weekends and holidays).
• Includes all earned wages: The final paycheck must include compensation for all hours worked through the last day, including any accrued but unused vacation or PTO only if the employer's written policy or employment agreement promises to pay it out at separation.
• No immediate payment required: Unlike California (where terminated employees must be paid immediately), Texas gives employers a 6-day window. This is considerably more lenient.

Example: If you terminate an employee on Monday, March 2nd, the final paycheck must be delivered by Sunday, March 8th (6 calendar days later). In practice, most employers pay on or before the following Friday to avoid any risk of missing the deadline.

Final Pay: Voluntary Resignation

When an employee quits voluntarily — regardless of how much notice they give — the final paycheck is due by the next regularly scheduled payday. This is set out in Texas Labor Code Section 61.014.

Key details about voluntary resignation final pay:

• Deadline: The next regularly scheduled payday following the date of resignation.
• No accelerated deadline for notice: Unlike California, where giving 72 hours of notice triggers a same-day final pay requirement, Texas treats all voluntary resignations the same — next regular payday, regardless of whether the employee gave two weeks' notice or no notice at all.
• Employee abandonment: If an employee simply stops showing up (job abandonment), most employers treat this as a voluntary resignation. The final paycheck would be due by the next regular payday.

Example: An employee who is paid biweekly (every other Friday) submits a resignation effective Wednesday, March 4th. The next regular payday is Friday, March 13th. The final paycheck must be ready by March 13th.

TWC Wage Claims Process

The Texas Workforce Commission (TWC) is the state agency responsible for enforcing the Texas Payday Law. When an employee believes their employer has failed to pay wages owed, they can file a wage claim with the TWC.

Here is how the process works:

• Filing deadline: An employee must file a wage claim within 180 days of the date the wages were due. This is a strict deadline — claims filed after 180 days will be dismissed.
• How to file: Wage claims can be filed online through the TWC website, by mail, or by fax. The employee must provide details about the wages owed, the employer, and the pay period(s) in question.
• Investigation: The TWC assigns an investigator who contacts both the employee and the employer. The employer is given an opportunity to respond, typically within 14-21 days.
• Preliminary Wage Determination Order (PWDO): If the TWC determines wages are owed, it issues a PWDO ordering the employer to pay. The employer can appeal within 21 days.
• Appeals: If either party appeals, the case proceeds to a hearing before a TWC hearing officer. The hearing is similar to a mini-trial, with testimony and evidence. After the hearing, the officer issues a final order.
• Enforcement: If the employer does not comply with a final order, the TWC can refer the case for collection, including the use of liens and levies.

Pay Stubs: Not Required but Recommended

This surprises many employers: Texas does not legally require employers to provide pay stubs (itemized wage statements) with each paycheck. Unlike California, which mandates detailed pay stubs with nine or more specific data elements, Texas has no statutory pay stub requirement.

However, providing pay stubs is strongly recommended as a best practice for several reasons:

• Transparency: Pay stubs help employees understand their gross pay, deductions, and net pay, reducing confusion and disputes.
• Wage claim defense: If an employee files a wage claim with the TWC, having provided clear, detailed pay stubs demonstrates your good faith and makes it easier to prove that wages were correctly calculated and paid.
• Federal requirements: While the FLSA does not require pay stubs either, it does require employers to maintain accurate payroll records for at least 3 years (and supplemental records for 2 years). Providing employees with copies of their own records via pay stubs is the simplest way to demonstrate compliance.
• Employee satisfaction: Employees expect to see a breakdown of their pay. Not providing one creates friction and can lead to wage disputes that could be avoided.

Direct Deposit Rules

Texas employers may pay employees by direct deposit, and the state's rules on direct deposit are relatively permissive:

• Written authorization: The employee must provide written consent to receive wages by direct deposit. This can be a physical form or an electronic authorization.
• Mandatory direct deposit: Texas law does not explicitly prohibit employers from requiring direct deposit as a condition of employment, unlike some states. However, the FLSA requires that employees have access to their full wages on payday, so if requiring direct deposit would cause a delay or a bank fee that effectively reduces wages below minimum wage, there is a risk. Best practice is to offer direct deposit as an option and provide a check alternative for employees who decline.
• Funds available on payday: Wages paid by direct deposit must be available in the employee's account by the designated payday.
• Payroll cards: Employers may use payroll debit cards as an alternative to checks, provided the employee agrees and can access the full amount without fees.

Wage Deduction Rules

The Texas Payday Law places specific restrictions on when and how employers can deduct amounts from an employee's wages. Under Texas Labor Code Section 61.018:

• Court-ordered deductions: Employers may deduct amounts required by court order (such as child support garnishments or tax levies) without employee consent.
• Written authorization: For all other deductions — including repayment of loans, equipment costs, or shortages — the employee must provide written authorization that is signed before the deduction is made.
• Cannot reduce below minimum wage: Deductions (other than those required by law) generally cannot reduce an employee's pay below the minimum wage for the hours worked in that pay period.
• No deduction for shortages or breakage without consent: An employer cannot unilaterally deduct from an employee's paycheck for cash register shortages, damaged equipment, or lost inventory unless the employee has signed a specific written authorization for that deduction.

Penalties for Payday Law Violations

The Texas Payday Law includes several enforcement mechanisms and penalties:

• Administrative penalties: The TWC can assess administrative penalties of up to $1,000 per violation against employers who violate the Payday Law. Repeat offenders face higher penalties.
• Triple damages for willful nonpayment: Under Texas Labor Code Section 61.0031, if the TWC determines that an employer's failure to pay wages was willful (intentional or knowing), the employer may be ordered to pay the claimant an amount equal to three times the wages owed. This treble damages provision is one of the most punitive aspects of Texas wage law.
• Wage lien: The TWC can file a wage lien against the employer's property to secure payment of wages owed under a final order.
• Criminal penalties: Under certain circumstances, willful failure to pay wages can result in criminal prosecution. An employer who fails to pay wages with intent to defraud may face misdemeanor charges.
• Attorney's fees: If an employee successfully pursues a private lawsuit (rather than a TWC claim) for unpaid wages, the court may award reasonable attorney's fees in addition to the wages owed.

The treble damages provision is particularly important. If an employer owes an employee $3,000 in unpaid wages and the TWC finds the nonpayment was willful, the employer could be ordered to pay $9,000. This makes it critically important to pay all wages on time and in full.

Out-of-State Payroll Considerations

If your Texas business has employees working in other states, or if you are expanding into Texas from another state, be aware that payday laws vary significantly from state to state. California, for example, requires immediate final pay upon termination — not the 6-day window Texas provides. New York requires final pay by the next regular payday regardless of the reason for separation, but also mandates detailed pay stubs.

For multi-state payroll compliance, consider a payroll provider with expertise across jurisdictions. PDS Payroll offers dedicated multi-state payroll support, ensuring you meet each state's payday, final pay, and pay stub requirements. and are also strong options that automate state-by-state compliance for growing businesses.

Compliance Checklist for Texas Employers

Use this checklist to ensure your business fully complies with the Texas Payday Law:

• Pay frequency: Non-exempt employees are paid at least semi-monthly. Exempt employees are paid at least monthly.
• Designated paydays: Paydays are designated in advance and posted in a conspicuous location at each workplace.
• Involuntary termination: Final paycheck is delivered within 6 calendar days of discharge, including all earned wages and any PTO/vacation owed under company policy.
• Voluntary resignation: Final paycheck is delivered by the next regularly scheduled payday.
• Pay stubs: Detailed pay stubs are provided with every paycheck (best practice, even though not legally required in Texas).
• Direct deposit: Written authorization is on file for every employee paid by direct deposit.
• Wage deductions: All non-mandatory deductions are backed by signed, specific written authorizations from the employee.
• PTO/vacation policy: Your written policy clearly states whether accrued, unused PTO/vacation is paid out at separation — and you follow that policy consistently.
• Record retention: Payroll records are maintained for at least 3 years (FLSA requirement) — 4 years is recommended.
• Respond to TWC claims promptly: If you receive a wage claim notice from the TWC, respond within the deadline (typically 14-21 days) with complete documentation.