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Texas Local Government Code - LOC GOV'T § 180.011. Limitation on Severance Pay for Employees and Independent Contractors

Current as of January 01, 2024 | Updated by Findlaw Staff

<Text of section as added by Acts 2025, 89th Leg., ch. 1175 (H.B. 762), § 1, eff. Sept. 1, 2025.  See, also, § 180.011 as added by Acts 2025, 89th Leg., ch. 261 (H.B. 198), § 2, eff. June 1, 2026, and § 180.011 as added by Acts 2025, 89th Leg., ch. 879 (S.B. 2237), § 1, eff. Sept. 1, 2025. >

(a) In this section:

(1) “Misconduct” means an act or omission by an employee or contractor of a political subdivision in the performance of the employee's or contractor's duties that the governing body of the political subdivision determines to be misconduct.  The term includes any finding of criminal conduct.

(2) “Severance pay” means dismissal or separation income paid on termination of:

(A) the employment of an employee that is in addition to the employee's usual earnings from the employer at the time of termination;  or

(B) the contract of an independent contractor that is in addition to the contractor's usual compensation from the employer as prescribed by the contract.

(b) This section does not apply to a public or teaching hospital.

(c) A political subdivision that enters into a contract or employment agreement, or renewal or renegotiation of an existing contract or employment agreement, that contains a provision for severance pay with an employee or independent contractor must include:

(1) a requirement that severance pay that is paid from public money may not exceed the amount of compensation, at the rate at the termination of employment or the contract, the employee or independent contractor would have been paid for 20 weeks, excluding paid time off or accrued vacation leave;  and

(2) a prohibition of the provision of severance pay when the employee or independent contractor is terminated for misconduct.

(d) A political subdivision shall post each severance agreement in a prominent place on the political subdivision's Internet website.

(e) This subsection applies to an action brought against a political subdivision by an employee or independent contractor of the political subdivision arising from the termination of the person's employment or contract.  A court may not issue a writ of execution or mandamus in connection with a judgment in the action if the judgment does not comply with this section.

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Cite this article: FindLaw.com - Texas Local Government Code - LOC GOV'T § 180.011. Limitation on Severance Pay for Employees and Independent Contractors - last updated January 01, 2024 | https://codes.findlaw.com/tx/local-government-code/loc-gov-t-sect-180-011-nr2/

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