I get a LOT of calls and emails to my Texas law office from people who left their employer and the employer refuses to pay the former employee’s final paycheck. It’s inexcusable for employers to think that just because they no longer have to rely on the employee for continued work that they don’t have to pay for work that was already performed but it seems to be a very popular attitude these days.
Although Texas law provides authority for the government to pursue civil and criminal penalties against employers who try to stiff their employees, it is rare for the appropriate authorities to take action.
That leaves you, the former employee, to scramble to pay your bills without your paycheck and pursue what you have worked for. Fortunately, you do have options under Texas law to pursue your final paycheck.
Under the Texas Payday Law you have two options to pursue your unpaid last paycheck:
1. File a complaint with the Texas Workforce Commission and allow them to pursue their administrative process to recover your pay; or
2. Sue the employer for breach of contract.
There are pros and cons to both courses of action. You can only pursue one or the other. The Texas Payday Law does not give you the right to pursue both courses of action.
Filing an administrative claim for an unpaid last check in Texas
Filing an administrative claim with the Texas Workforce Commission for an unpaid check is a relatively simple process. It is similar to the unemployment benefits claim process. You file a claim and a hearing is held. Either party can appeal the hearing officer’s decision and if that occurs then an appeal hearing occurs. The appeal can then go to a civil court. The major benefits of this process is that it is quick. You may not need a lawyer to assist you with the process.
However, there are some drawbacks. The TWC hearing process is less formal than a court hearing and the hearing officer often makes a decision based upon very little evidence and relies on assessing the credibility of the people on the phone.
Additionally, the administrative process limits you to recovering the unpaid wages. You will not recover punitive damages, attorney fees, or other out of pocket losses. That may not be a big deal for you; but if you hire an attorney to represent you in the administrative hearings then you’ll pay out of your own pocket.
Last, if the employer does not pay the TWC the wages, to pay you for the last check, then the TWC will typically only place a lien on the employer’s property and leave you hanging until the lien is paid.
Filing a lawsuit to recover for an unpaid final check in Texas
The other option is to file a lawsuit in Texas courts by asserting the employer breached its contract to pay you for services (even if you are an at-will employee) and pursuing your wage claim through litigation. This process has the benefit of allowing you to pursue other remedies, such as payment of attorney fees.
The fear of litigation in which a $1000 claim becomes a $10-20,000 claim through attorney fees may be enough to convince the employer to pay the unpaid check (plus possibly additional money) with only a demand letter sent. However, it is a much longer and more costly process if you have to litigate your claims.
You have to “pay to play” by paying filing and service fees to get your foot in the courthouse door. Your rent and other bills will be distant memories by the time you ever see a trial.
Which is right for your unpaid wages in Texas?
This question is dependent upon your situation and your needs.
If you may have other unpaid wage claims from your employment, such as unpaid overtime, or other claims against your employer for discrimination or other unlawful employment practices then you may benefit from bundling your last paycheck claim and try to negotiate everything at once before filing anything.
If you need payment as soon as practical and the employer will not voluntarily pay the check in the face of a demand letter then the administrative claim may be your best option.
Texas employment attorney for unpaid wage claims in Texas
However, you may benefit from an attorney sending a demand letter prior to other actions for the unpaid final paycheck. Your employer may send you the paycheck just to avoid anything more serious from occurring. That is why it is a good idea to first talk to an employment attorney before making any decisions.