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ScottyMacEsq
ScottyMacEsq, Lawyer
Category: Employment Law
Satisfied Customers: 17110
Experience:  Licensed Texas General Practice Attorney
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If an employee has borrowed money from employer and is

Customer Question

If an employee has borrowed money from employer and is repaying through a signed payroll deduction and the employee decides to quit cane employer with hold monies still owed by employee
JA: Because employment law varies from place to place, can you tell me what state this is in?
Customer: Texas
JA: Is the employment agreement "at will," union, full time or part time?
Customer: At will
JA: Anything else you want the lawyer to know before I connect you?
Customer: No not at this time
Submitted: 7 months ago.
Category: Employment Law
Expert:  ScottyMacEsq replied 7 months ago.

Thank you for using JustAnswer.

Yes, assuming the wording of the signed deduction allows them to. That is, if the signed payroll deduction only authorizes a certain amount per pay period, then they can only deduct that amount. They'd have to sue for the balance if the signed agreement is that specific. But if the agreement says that they may recover from the wages the loan, then they can. Also, they can only deduct the principal of the loan, not interest. It is up to the employer to document the existence of the loan or advance (deduction allowed for principal only - no interest or administrative fees - see FOH, Section 30c10(b) (1988)). Here is the relevant text of FOH § 30c10(b):

30c10 Voluntary assignment of wages, loans, and advances.
(b) While loans and cash advances made by an employer are not "facilities", the principal may be deducted from the employee's wages, even where such a deduction cuts into the minimum wage or overtime due under FLSA. Deductions for interest or administrative costs on the loan or advance are illegal to the extent that they cut into the minimum wage or overtime pay. The existence of the loan or advance shall be verified to the extent possible.

This category would include any instance in which the employer advances money to the employee to pay for something on the employee's behalf for which the employee would normally be personally responsible. This category also includes wage overpayments.

This type of deduction must be authorized in writing by the employee to be valid under the Texas Payday Law. But assuming that it is in writing and allows them to withhold the remaining portion due, then they can, but again, only so far as it's authorized in writing. If they go beyond that authorization, the employee can file a complaint with the Texas Workforce Commission for improper wage withholding.

Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable.

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Expert:  ScottyMacEsq replied 7 months ago.

Did you have any other questions before you rate this answer?

Expert:  ScottyMacEsq replied 7 months ago.

Are you there? Please note that I am still here, awaiting your response or rating... (please note that rating closes this question out, so if there's nothing else, please rate it so that I can assist other customers that are waiting for answers to their questions).

If you can't see the stars, you may need to scroll up / down / left / or right to see them. This is where you rate so that the question will close out.

Expert:  ScottyMacEsq replied 7 months ago.

My apologies, but I must assist the other customers that are waiting. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable.

Please note that I don't get any credit for the time and effort that I spent on this answer unless and until you rate it positively (3 or more stars). Look for the stars on your screen (★★★★★). You may need to scroll left/right/up/down to see these stars, but note that the rating is what closes out this question, so it is necessary that you do so.

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Expert:  ScottyMacEsq replied 7 months ago.

I see that you have not responded in some time. Please note that this question is still open until you rate it. I believe that I have answered your question, but if you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable.

Please note that I don't get any credit for the time and effort that I spent on this answer unless and until you rate it positively (3 or more stars). Look for the stars on your screen (★★★★★). You may need to scroll left/right/up/down to see these stars, but note that the rating is what closes out this question, so it is necessary that you do so.

If you feel that I have gone above and beyond in this answer (my average answer is about 10 minutes) bonuses are greatly appreciated. Thank you, ***** ***** luck to you!

▼ RATING REQUIRED! ▼ Please don't forget to Rate my service positively. It's only after you rate that I am credited.