HOUSTON BUSINESS REVIEW

THE CPA CORNER: TEXAS UNEMPLOYMENT ISSUES
By C. Kevin Moore

Kevin Moore is the Principal with C. Kevin Moore & Associates and has two decades of experience as a Certified Public Accountant. Each week he provides the information you need to grow and protect your business.

We recently advised an accounting client on certain employment matters and talked about some interesting facts regarding employment payroll requirements. Our purpose was to assist the client in working with the Texas Employment Commission ("TEC") auditor handling an unemployment claim issue.

Some of the basic rules include:

- Employers must pay their employees at least once a month if the employee is not subject to the overtime provisions of the Fair Labor Standards Act. All others must be paid at least semimonthly.

- Employers must designate paydays and must post those paydays in conspicuous areas of the workplace.

- Wages paid on a commission basis or bonuses are due in a timely manner, according to the terms of agreement between employee and employer.

- Employees absent on payday are entitled to be paid upon request on a regular business day.

- If separated from work for a reason other than discharge, an employee must be paid in full not later than the next regularly scheduled payday.

- Discharged employees must be paid in full not later than the sixth day after termination.

- Employees may be entitled to unused fringe benefits (vacation, holiday, sick leave, parental leave, or severance pay) only if the employer provides for these benefits in a written policy or agreement.

- Employee wages may be withheld only if the employer

-is ordered to do so by court;
-is authorized by state or federal law (e.g. payroll taxes); or
-has the employee's written authorization to make deductions.

As support for the employer, this what the TEC wanted to see in the company payroll records and files in order to contest the unemployment claim:

- Final incident report;
- Copies of company payroll policies;
- Acknowledgement of policies signed by the employee;
- Documentation of warnings; and
- Documents proving allegations

Many small- to medium-size businesses do not have defined written policies. Check your files as an employer and make sure you are properly documented.