Texas House bill by Rep. Leach restricts severance pay for political subdivision employees

Passed bill authored by State Rep. Jeff Leach aims to regulate severance pay for employees and contractors of political subdivisions, seeking to define misconduct and cap severance payments funded by tax revenue, according to the Texas Legislature website.

In the House, 40 Democrats and 81 Republicans voted in favor of the bill, while 11 Democrats and two Republicans opposed it.

Meanwhile, in the Senate, 10 Democrats and 20 Republicans voted in favor, while one Democrat voted against it.

Jeff Leach introduced the bill in the Texas House on Tuesday, Nov. 12, 2024, ahead of the official start of the 89th regular legislative session on Jan. 14, 2025.

Leach graduated from Baylor University with a BS and again from SMU Dedman School of Law with a JD.

Leach, a Republican, was elected to the Texas State House in 2013 to represent the state’s 67th House district, replacing previous state representative Jerry A. Madden.

According to the Texas Legislature, the bill’s official text was summarized as follows: ‘Relating to severance pay for political subdivision employees and independent contractors’.

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill amends the Local Government Code to restrict severance pay for employees and independent contractors of political subdivisions, effective Sept. 1, 2025. It defines “severance pay” and “misconduct” and specifies that political subdivisions must include in employment or contract agreements a clause prohibiting severance pay for terminations due to misconduct. Severance payments funded by tax revenue are capped at 20 weeks’ worth of compensation, excluding paid time off or accrued vacation leave. The bill mandates that severance agreements be posted prominently on the political subdivision’s website and prohibits courts from enforcing judgments against the political subdivision that contravene these provisions. Public or teaching hospitals are exempt from this section.

The bill was co-authored by Rep. Will Metcalf (Republican – District 16), Rep. Brooks Landgraf (Republican – District 81), and Rep. David Cook (Republican – District 96), along with two other authors.

The bill received its final legislative approval on Wednesday, May 28, and was signed into law by Gov. Greg Abbott on Sunday, June 22.

Bills in Texas go through a multi-step legislative process, including committee review, debates, and votes in both chambers before reaching a final decision. Each session, there are typically thousands of bills introduced, but only a portion successfully navigate the process to become law.

You can read more about the bills and other measures here.