Austin Interviewed on KXAN about Docked Paychecks in Response to Stimulus

“I think that this violates at least one law that we know of out there,” Austin labor attorney Austin Kaplan told KXAN. We sent Kaplan the salary reduction agreement to find out whether he believes the agreement was legal.

Kaplan said since Texas is a right-to-work state, workers who are not under contract have very little room to fight this.

“Employers can lay them off or fire them for good reason, bad reason or no reason at all as long as it’s not for an illegal reason with no notice whatsoever,” said Kaplan.

“From a legal standpoint, in Texas, the law isn’t as strong in employee rights as I would like it to be, but there is a federal law called the ‘Fair Labor Standards Act,” Kaplan said. “That law says that employees have to get at least minimum wage from the employer during their regular pay period.”

The act, which was signed into law in 1938, also established the employment classification for exempt and non-exempt employment in the United States.

Kaplan said he believes the company would be in violation of that law if it docked some paychecks to the amount described in the agreement.

“What they’re trying to do here, it looks like, is take people down to zero for at least one pay period and the law wouldn’t permit that,” Kaplan told KXAN. “It also just looks like a bad idea. I think employers have other options that they can do than something like this — I haven’t seen something like this before.”

Those options would be layoffs or furloughs — options that would allow workers to receive unemployment insurance benefits. Kaplan said even a reduction in hours would have allowed the workers to seek unemployment benefits to cover those reductions.

“If I was advising the employer, I always say don’t put your hands in the employees’ pockets,” said Kaplna. “And this just doesn’t seem right to me.”

The agreement, if signed, would also allow the company to continue the salary cuts indefinitely.

“The deduction will happen as many times as the government decides to make these types of distributions,” the company wrote in the agreement.

Full coverage at KXAN