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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.
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