I'm posting this for my mom who works at a telemarketing co. in Texas. I have two suspect issues:

1) Her employer states that she has to report sick days 2 WEEKS in ADVANCE. As if she can conveniently plan when she will have the flu or even heart trouble. The TX labor law site does not give very clear information on this. Furthermore, they are not paid sick time for full time employment (I realize this is not required under TX labor laws, but I needed to complain about the last part).

2) Coming in Late: The employee is fined 25$ for the first offense and 50$ for the second, after that you are fired. I don't know how long constitutes late (she hasn't given me that info). Is this legal as well?

I realize TX is the land of little regulation (and protection to employees) but this seems like it's taking it way too far. Is this really legal?

Well, the idea of advance notice for sick leave is an old one, and is just an exercise for the employer. It is a dandy pretextural reason for disciplining or terminating an employee. The law doesn't regulate disciplinary policies, or sick leave administration, so there's little, if any, to be done.

As to the disciplinary deduction, that matter is covered in law:
According to the Texas Payday Law, for an employer to be allowed to deduct any portion of an employees pay the following must occur:
Section 61.018 states;
An employer may not withhold or divert any part of an employee’s wages unless the employer :
(1) is ordered to do so by a court of competent jurisdiction;
(2) is authorized to do so by state or federal law; or
(3) has written authorization from the employee to deduct part of the wages for a lawful purpose.

#3 comes in to play here, since it requires the employees authorization to deduct from, or to withhold wages.

While it may be legally possible to deduct wages as a disciplinary action, if the employee has authorized it, it is against the spirit of the Payday Law which requires payment for all time worked at the agreed on rate.

In addition, on the subject of deductions as the result of written authorizations, the Texas Payday Rules (Texas Administrative Code, Chapter 821) state:
Section 821.28(b):
b) Written authorization for deductions shall be specific as to the lawful purpose for which the employee has accepted the responsibility or liability. Written authorizations shall be:
(1) sufficient to give the employee a reasonable expectation of the amount to be withheld from pay; and
(2) a clear indication that the deduction is to be withheld from wages.

It's difficult for an employer to set up a monetary discipline such as a fine, and is more trouble than it's worth, unless there is a sadistic side to this. However, it can be done, and the employees who don't agree to the deduction could (and should) be looking for other work.

If she signed a contract (I don't know yet) and within this it sites agreement to deductions if she is late, does this mean consent? Or does it mean that if pay is to be deducted, she has to sign something agreeing to it before the deduction comes out? If the latter, she could refuse to sign siting its unlawfulness. Furthermore, if the would threaten termination over not agreeing to the deduction, that would also be illegal?

I agree she should look for other work, but times are tough, especially at her age.

If an employee agrees to a deduction, and it is for a lawful (read: not illegal) purpose, the deduction can be made by the employer. Texas law requires signed agreement, unless there is a law, regulation, or court order covering a deduction or withholding. If an employer makes agreement to a deduction a condition of employment, the employee can agree to it, quit, or be disciplined--including terminated. If there is an unauthorized deduction, the employee can file a claim for the wages, through Texas Workforce Commission. See: http://www.texasworkforce.org/ui/lablaw/lablaw.html.

The question of legality of retaliation for filing a wage claim is interesting, and may not have a clear answer. The Texas Labor Code does not protect a wage claim filer, specifically. The Fair Labor Standards Act (federal) does, but that is for filing a claim with the U.S. Dept of Labor. There is some opinion that a wage claim is "protected activity" under one or more statutes. It may have never been tested in court, and probably isn't worth the cost to test it.

In payroll terms, a "deduction" is something that is subtracted from "gross pay". Is this fine a deduction (after taxes) or the the gross pay (before taxes) what is being reduced?