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TITLE 40SOCIAL SERVICES AND ASSISTANCE
PART 20TEXAS WORKFORCE COMMISSION
CHAPTER 821TEXAS PAYDAY RULES
SUBCHAPTER BPAYMENT OF WAGES
RULE §821.25Fringe Benefits

(a) For purposes of §61.001(7)(B) of the Act, vacation pay and sick leave pay are payable to an employee upon separation from employment only if a written agreement with the employer or a written policy of the employer specifically provides for payment.

(b) For purposes of §61.001(7)(B) of the Act, severance pay is payment by an employer to an employee beyond the employee's wages on termination of employment, based on the employee's prior service. Severance pay does not include payments for liquidated damages, payments in exchange for a release of claims, or payments made because of a lack of notice of separation.

(c) For purposes of §61.001(7)(B) of the Act, the sale of an employer's business is a termination of employment with all of the employer's employees. At the time of termination, the employer becomes liable for the payment of vacation pay, holiday pay, sick leave pay, parental leave pay, or severance pay if owed pursuant to a written agreement or written policy between the employer and its employees.

(d) For purposes of §61.001(7)(B) of the Act, expense reimbursements paid to employees are not wages. Expense reimbursements are payments to the employee for costs expended by the employee directly related to the employer's business.

(e) Absent the inclusion of definitions of terms in a written agreement with the employer or under a written policy of the employer, a term will be given its ordinary meaning unless a party establishes that it is defined in another way.

(f) For purposes of §61.001(7)(B) of the Act, accrued leave time of an employee shall carry over to subsequent years only if a written agreement with the employer or a written policy of the employer specifically provides for it.

(g) For purposes of §61.001(7)(B) of the Act, paid time off (PTO) or paid days off (PDO) are wages unless the employer's written policy defines PTO or PDO as something other than a combination of vacation pay, holiday pay, sick leave pay, parental leave pay, or severance pay. PTO or PDO is payable to an employee upon separation from employment only if a written agreement with the employer or a written policy of the employer specifically provides for payment.


Source Note: The provisions of this §821.25 adopted to be effective June 1, 1998, 23 TexReg 5732; amended to be effective September 20, 2010, 35 TexReg 8506

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