Q. We have an employee who recently submitted an expense report for more than $1,300 for an extended business trip. We accidentally reimbursed him twice. He did not report the double payment and we did not learn of the mistake until an internal audit two months later. Our company policy prohibits dishonesty and we want to fire the worker for violating this rule. Will he be able to collect unemployment benefits? May we withhold the vacation pay that is due to him under our policy, which would just about make us whole?
A. The worker will likely be denied unemployment benefits under these circumstances. He should have reported the second check to you. Failing to do so should be considered an act of dishonesty under your policy and constitute “misconduct” under unemployment compensation law, which would preclude his eligibility for benefits.
The Texas Payday Law determines whether you can offset the vacation pay against the amount owed by the worker. If you have a written policy that requires terminated employees to be paid for their accrued vacation, then this payment will be considered “wages” under the Payday Law. Following an involuntary termination, all wages must be paid to the employee within six days.
A separate section of the Payday Law prohibits deductions from wages owed, unless:
- Required by a court order
- The employee has given written permission
- It is otherwise authorized by state or federal law.
Absent written permission from the employee, you would not be permitted to offset his wages.