Texas Resignation Laws

Resignation laws play a vital role in employment regulations in Texas. Employers must understand these laws to ensure legal compliance, protect their reputation, and manage employee transitions smoothly and professionally.

By adhering to these regulations, employers can avoid potential legal disputes and foster a respectful work environment. Additionally, being well-versed in resignation laws helps employers maintain positive relationships with departing employees and supports organizational stability during periods of change.

This Article Covers:

Key Resignation Laws in Texas

When managing resignations in Texas, various regulations might influence employer policies. These are:

  • At-Will Employment – In Texas, “at-will” employment is permitted. This allows employers or employees to end the employment relationship at any time, as long as the termination is not for illegal reasons like discrimination or retaliation.
  • Resignation Notice – In Texas, employees can resign without giving any advance notice. If an employee provides advance notice of resignation, the employer can choose to accept, reject, or modify it. If the employer denies the notice period, they are not obligated to pay for the time not worked by the employee, as the duty to pay ends when the resignation becomes effective.
  • Collective Bargaining Agreement – Officials of the state or a political subdivision of the state of Texas are prohibited from entering into collective bargaining contracts with labor organizations regarding public employees’ wages, hours, or conditions of employment. Any such contract is void. Officials also cannot recognize labor organizations as bargaining agents for public employees. 
  • Final Pay –  The final paycheck in Texas is the last payment an employee receives after their employment ends. This payment includes all due wages and is commonly referred to as the last paycheck.
  • Forced Resignation – In Texas, forced resignations can occur when an employer creates a hostile work environment or coerces an employee to resign. This scenario is known as constructive discharge and can be considered illegal if it results from discrimination or retaliation.

The Resignation Process in Texas (Notices, Resignation Letters, Final Pay, and Offboarding)

The Texas Workforce Commission (TWC) acknowledges that a two-week notice is typically expected in many industries. Nevertheless, employees have the right to resign with or without providing notice to their employer.

Employees may become eligible for certain benefits if they provide notice before resigning.

What should a resignation letter in Texas contain?

In Texas, a resignation letter should typically include a specific reason for resigning and a forwarding address.

Stating the reason for resignation can affect future employment opportunities and determine eligibility for unemployment benefits.

If space is limited, employees should summarize their reasons. The forwarding address ensures important documents, including any owed pay or compensation, are sent to the right place.

A well-written resignation letter should also mention the effective date of separation, the employee’s signature, and the date of signing. However, following this format is not mandatory.

How much notice should Texas employees serve after resigning?

Texas, employees do not have to provide a resignation notice unless it is specified in their employment contract.

Company policies on notice periods in Texas can vary, but most employers expect employees to provide at least a two-week notice before resigning.

If an employee gives notice of resignation and the employer accepts it before the effective date, the company is not required to pay for the unworked portion of the notice period. However, if a contract requires it, the company must pay for the time not worked.

What are the components in the final paycheck of Texas employees?

The final paycheck includes regular wages, fringe benefits payable under a written policy, and other pay components such as accrued leave payouts, commissions, and bonuses.

Unused paid leave is forfeited after the employee’s resignation. However, if an employee resigns with at least two weeks’ written notice, they will receive any remaining unpaid leave.

Leave time, whether paid or unpaid, cannot be counted towards the notice period. 

If an employee gives two weeks’ notice but wants to take a week of paid leave during those two weeks, the notice period will not be reduced by the leave time. Hence the employee will not be eligible for accrued leave payouts in the final paycheck.

When should the final paycheck be issued to Texas employees?

Texas employees must receive their final paychecks on the next payday following the effective resignation date.

The employer must pay fringe benefits and other components, such as commissions and bonuses, by the next payday.

If the wage agreement or policy specifies a different payout schedule for a particular component, the employer must follow that schedule. In these cases, the wage agreement or policy determines the payment deadline for that specific component.

What are the penalties for non-payment of final paycheck to Texas employees?

It is not legal in Texas to hold a final paycheck past the next payday deadline, even if the employee has not returned company property, signed timesheets, or similar issues.

If the company knows or should know what the pay should be, it must deliver the final pay no later than the next payday.

Employers can often handle failure to return company property through wage deductions or a property return security deposit.

If an employee fails to sign timesheets or violates other rules, a wage agreement can specify a lower wage for the final pay period unless certain conditions are met.

How do you offboard Texas employees who resigned?

In Texas, employers should follow the offboarding process for all employees, whether they are leaving voluntarily or involuntarily. This ensures consistency and thoroughness in handling departures.

Texas does not have specific regulations for the offboarding process. However, recommended practices include creating a knowledge transfer plan, conducting exit interviews, collecting company assets, informing clients, and revoking the employee’s access.

Accepting and Withdrawing Resignations in Texas

In Texas, accepting a resignation involves the employee submitting their resignation either in writing or orally to their employer.

In cases of oral resignations or resignations without notice, employees should document the resignation and have witnesses to support their case.

Can employees withdraw resignations in Texas?

According to federal laws, employees in Texas are allowed to withdraw their resignation before the effective date of separation. 

However, employers may reject the withdrawal if there is a valid reason, such as administrative disruption or having already hired or committed to hiring a replacement.

Employers must explain these reasons to the employee. Avoiding disciplinary actions is not considered a valid reason for rejecting the withdrawal.

Can employers reject resignations in Texas?

Generally, employers in Texas can not reject the resignation submitted by the employees. The “at-will” employment policy in Texas allows employees the freedom to resign at any time.

Severance Pay for Texas employees

Severance pay can generally be provided to Texas employees when the employer terminates their employment. It is often calculated based on the employee’s tenure.

The employer had previously agreed to provide this payment, either orally or in writing. However, under the Texas Payday Law, only a written severance pay agreement is enforceable.

Texas law doesn’t require employers to provide severance pay. Instead, the provision of severance pay is based on an agreement between the employer and the employee, or their representative.

Employees should consult their employer’s policy to understand the terms regarding severance pay.

Noncompetes Rule for Texas employees

The Federal Trade Commission (FTC) has recently banned noncompete agreements (covenants not to compete) to encourage competition, innovation, and the growth of new businesses.

As a result, employers can no longer prevent employees from working for competitors or starting similar businesses after they leave the company.

Texas court, however, has now blocked the FTC’s rule to ban noncompete agreements. This decision does not prevent the FTC from addressing noncompetes through case-by-case enforcement actions.

Important Cautionary Note

When making this guide we have tried to make it accurate but we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you to seek advice from qualified professionals before acting on any information provided in this guide. We do not accept any liability for any damages or risks incurred for the use of this guide.