The Attorney General of Texas 

April 15, 1986 

JIM MAllOX 

Attorney General 

Suprmt Cow! BulldIng 

P. 0. Box 12548 

Atmh. lx. 7a711.250 

512/4?52501 

lder 91om74.1367 

lel~copler 51a47502+3 

714 Jackson. Suite 70Q 

oa11as. TX. 75202-4500 

214t742-8944 

4824 Albs”. Are.. SUb 160 

El Paso. TX. 799052793 

91Y533.3484 

1001 Texas. sune 700 

muston. lx. 77002.3111 

713lm5aaa 

SO6 Brotdway, Suite 312 

Lubbock, TX 79401-3479 

e.ow47-5238 

4309 N. Tenth. Suite B 

heNen. lx. 78501-1685 

SIi882d47 

100 k4.l” Plaza. Suite *oo 

tan Antonio. m 782052797 

5w22w191 

An Equal OppCwlunltYl 

~f~~rrnat~ve Action Employer 

., 

Hr. Lawrence F. AlWLn, CPA 

State Auditor 

P. 0. Box 12067 

Austin. Texas 781’11 

Dear Hr. Alwla: 

You ask: 

Op~nloa No. Jl+475 

Xc: Compensatoq time endlor wtttime psy for state employeeb after 

April 15, 1986 

What does the law require in regard to s state 

employee’s receipt of compensatory time off or 

premium Iovertime pay for overtime earned on or 

after AIsrll 15, 1986? 

Your letter focuses on the United States Sutmtmc Court's decision in 

Garcia v. Ssn Ant+o Metropolitan Trsnslt iuthoritp, 105 S.Ct. 1005. 

U.S. (1985). on the Pair Lsbor Standards Amendments of 1985. 

pub.L. 99-150, Stat. (1985). and on section 2f of article V of 

the current Genm>l Approstions Act, Acts 1985, 69th Leg., ch. 980. 

at 7759. A brlc:f history of the sppllcability of the Fair Labor 

Standards Act to the states la necessary to an undcrstatdinn of the 

Garcia case, these recent amendments, and how they affect section 2f. 

The amendments become effrctlve cn April 15. 1986. 

The Fair Labor Standards Act of 1938, 29 U.S.C.. 1201 et seq.~ 

[hereinafter FLSA], requires employers that are covered by the act to 

pay their l mployws a mlnimum hourly vage. see 1206, and to pay then 

at one and cat-ho1.f times their regular ratEOf pay for hours Porked 

in excess of fcrty during a vorkveek. Sea 5207. As originally 

enacted, the ?I.!% of 1938 specifically excluded the states and their 

political subdivisions from its provisions. See 29 U.S.C. 0203(d) 

(1940 l d.); (50 Stat. 1060). Beginning in 196rCongress tnscted a 

series of amcndme~~ta which extended the coverage of the act to certain 

types of public employees. See Pair Labor Standards Amendments of 

1961. 02(c), 9, 75 Stat. 65.71; Pair Labor Standards Amendments of 

1966, 51102(a), Cb), 80 Stat. 831; 1206(c), 80 Stat. 836. In 1976. 

Coogrtss 

“tmployer” 

again broadened the coverage of the act by defining 

to in::Lude a “public agency.” Fair Labor Standards Amendments of 1974, (21(b), 88 Stst. 68. Constquently , by early 1985. the 

act’s minti wg.e snd overtime provisions extended to almost all 

employtee of .the states and their political subdivisions. See Garcia 

- 
Mr. Lawrence P. Alvlo - Page 2 (Jx-475) 

v. San Antonio Netropolltac ‘[l:ansit Authority, B. After 1974. but 

prior to amendecnt in 1985, the act contained oulg the general exaxption for executive, adxinlstratlve or proftssimal parsomtl, see 

5213(a)(l). and ac exemptlon for elected officeholders and cartaloof 

thcfr employees. See 5203(e) (2) (C). 

- 

The Fair Labor Standards Amendmtnts of 1985, Pub.L. 99-150, vare 

enacted in response to tht United Statee Supreme Court’s decision in 

Carcia. The Gsrcla case is the wst recent of a sarles of significant 

cases which axed the constitutionality of applying the FLSA to 

the states. Tht combined l ::l:ect of tht amendments vhlch oare enacted 

in the 1960’s vas initislly upheld in Haryland v. Wlrtz, 392 U.S. 183 

(1968). Congress relied ta the Wirtz case when it expanded the 

coverage of the act in 197’1 to includcmost public employees. H.R. 

Rep. No. 93-913, ?3d Gong., 2d Stss. 6 (1974). Tbc 1974 amendments, 

however. triagered a challenge vhlch resulted In a severe limitatlon -- 

on the extent to which the act could be applied to the states. See 

Pstlonal League of Cities v. Ustry. 426 U.S. 833 (1976). In ?btloGi 

-- 

League of Cities 0. Ustry-, the Supreme Cnurt held that the Commerce 

Clause of the Cnlted Statts Constltutlon dots cot empover Congress to 

apply the minimum wage anil overtime provisions of the FLSA to tht 

states 

insofar as . . . [they] operate to directly displace the States’ freedom to stmcture ‘inregrsl 

operations in areas of traditioual governmental 

functions. . . . 

426 U.S. at 852. Responding to the Pational League of Citlrs case. 

the United Ststes Department of Labor promulgated regulatlocs 

providing that it would not enforce the minimum vagc and overtime 

provisions of the act against a stste or polirical subdivision unless 

notice had first been gIvt:l that the sctivitios In question were not 

integral operations in areas of traditional goverrmental functions. 

29 C.F.R. 0775.2(b) (1984). 

In Garcia, the Suprasu: Court reversed its decision in liatlonal 

League of Cities. Like tha: National Lesguc of Cities case, the Gsrcia 

decision was the result of a sharply divided court. In T-57 

decision. the Court rejectc!d. 

as unsound In pr~inciple and unvorkablt in practice. a rule of state immunity from federal 

regulstion that turns on a judicial appraisal of 

whether a part:Lcular govtrnmental function is 

’ integral’ or ’ t~raditional. ’ 

105 S.Ct. at 1016. The Court held that the FLSA, as applied to the 

San Antonio Metropolitan Transit Authority, does not violate stJtc 

soverdgnty . The Court renBoMd broadly that oucc a paver is found to 

p. 2173 
Mr. Lawrence F. Alvin - Page 3 (J?l47S) 

be delegated to the federal, governacnt by the Constitution. exercise 

of chat specific paver by the states cannot br protected by using the 

Tenth Azendrmnt or judicially created limitrtions se affirmative state 

shields to federal action. 

The primary impact of the Garcia decision was the removal of the 

coostltutional shield which hedxcted states sad localitle6 from 

potentialiy burdensow fcl&!ral legislation enacted ucder Congress’ 

Commerce Clause pavers. Consequently, uder Garcia the potent161 

Impact of existing or proposed federal legi6lstioo and regularlone on 

the states and localltics bacome no longer a constitutional issue. It 

became s policy matter to ha resolved ln the course of the lcgi6latlve 

process. 10s s.ct. at 1020-21. 

When the Garcia declelon was handed down, the FL.SA minimum ‘sage 

and overtime provisions extended to virtually all employers of the 

states and their political subdivisloab. Although Csrcis dealt with s 

transit authority, the broad language employed ard the express overruling of the National L#clw of Cities case indicated that these 

provlslons of the act ve& to be applied to the state and munlclpal 

employees which Congress Intended to include when it passed the 1574 

amendments. Order that rctrtding , once cm individul fslls vithin the 

cctegory of covered employees, the employee6 can be excluded from 

application of the act only if they are covered by an exception 

clause. See Ososky v. Wck, 704 F.2d 1264, 1268 (G.C. Cir. 1983). 

The Fair Labor Standard6 AE&dments of 1085 created new exceptions for 

public employees. You rwe concerned about the effect of these 

amendment6 on the current kpproprlations Act. 

Section 2f of article V of the current Appropriations Act contains two riders enacted ln response to these changes in the law and 

in anticipation of amendolrnts by Congress to the FLSA. Acts 1985. 

69th Leg., ch. 980;~ nt 7759-7760. Sectlon 2f provides, %rr pertinent 

part: 

f. OVERTIME. (1) Employees Subject to FLSA. 

An employee who !Ls subject to overtime provisions 

of the Fair Labcr Standards Act of 1938, 29 U.S.C. 

sets. 201 et SCQ .., (FLU) IS entitled’ to compensation for overtime as provided by &is subdivision. 

An employee v’ho 16 required to work hours io 

excess of 40 hoers Ia a vorkveek Is entitled to 

compensation fol, the excess hours either by: 

(A) the urgency allowing (or requiring) the 

employee to take compensatory time off during 

the bane pay jleriod, at the rate of l-112 hours 

off for each hour of overtime; or 

p. 2174 
Us. Lawrence P. Alvin - Page 4 (JU-475) 

(B) st ttie discretion of the evzploylng 

sgcncy, in CP~IC:S IL which grsnting compensetory 

time off is ~q~rectScs1, the employac receiving 

pay for the overtime at the rate l qusl to l-112 

times the emp:.oyea’s rcgulsr rste of pby. 

. . . . 

(4) Contitlgency Prov1*1cm. 

employees src excluded generally ‘:rom”‘% 

spplicstion of the FLSA as a result of A court 

dacision or etatutory change, this subdivision 

govern6 overt~lme pay and compens&tcry leave. 

A regularI, full-time employee vho is required to vork hours In excess of the standard 

workveek ests’D’ll6hed for the position In bccordance with tbc nppllcnble statutes Is tntitled 

to compenatlon for the excess hours either by: 

(A) the agency aliovlng (or requlrlng) the 

aaployee to t&kc l quivnlent c0mpen**t0ry the 

off during the 12-mocth period follovipp the 

end of the w&week; or 

(B) nt the discretion of the employing 

Agency, io c6ses in vhlcb granting compensatory 

time off is Inpractical, the employee receivirg 

pay for the ct-ertimc nt the rate of l-112 tlmaa 

the employer’s rcgulsr rate of psy. ~Emphbsls 

added). 

The primary difference brween these NO subsections Involves the rime 

period during which comperwstory tl& off mUst be t&n. 

Section Zf(1) appliw to cmployaas subject to the PLSA vhile 

section 2f(4) applies “[IIf stntc employees nre excluded generally 

from the application of t.he FLSA AS 6 result of a ccurt declsicn or 

sratutory chbnge. . . .” As indicpted In the discussion above, the 

Gnrcin declsiun WAS the result of A sharply divided court. The Te%bS 

Leglslsture prepnred for the possibility thst the dcclsion could be 

recoPsidercd. Because of the slgnif icacce of the controversy 

surrounding the decision, the Texss Leglsisture also prepsred for the 

possibility that Congress vould bddress the question through the 

1egiSibtiW PSOCeSS -- the solution suggested in the Carcis case. It 

is clesr that section 2f (4) WAS intended to respond to legislative 

change6 in the FLSA. The problem 16 that Congress reacted to the 

&mdS cbse in A vby that the hngUSge Of SeCtiOn 2f(h) doe6 not 

anticipate. Section 2f (4) bpplies only “[llf state tmployees are 

excluded generally from th,c npplicstion of the FLSA. . . .I’ 

p. 2175 
Fr. Lnvrence F. Alvin - Pa:&te S (m-475) 

The 1985 nmepdmantr to the FLSA do not totslly exclude the 

employees cf A public agency; rother, they specify th6t a public 

agency may provide compensatory time off in lieu of overtime compcnsatlon pAymeW In certain circumstruces. Pub.1.. 99-150, I2 (to be 

codified AS 29 U.S.C. #207(o)). The time off i6 oat limited to the 

SAM pay period. The emcru~wnts also provide limited exemptions for 

three sp~cibl situations: (1) speclnl drtnil work for fire protection 

and lnv enforcement. (2) occnsional or sporadic employment, and (3) 

eubstitutlon. Pub.L. 99-153, 13 (to be codified as 29 D.S.C. EX7(p)). 

Pub.L. 99-150, 14 (to be CDdlfied AS 29 U.S.C. 1203(e)). Your concern. 

hovever, focuses cn the (:aneral applicability of the time off provisions rather than with l,be special exceptions. The 1985 amendments 

create a conditional exception for public employees from the cvertime 

provisions of the FLSA. The issue to bc resolved is whether this Is a 

“general exclusion” within the treenine and Intent of subsection 2fC4). 

Although there are cwtain aspects of sectlcn 2f(4) vhich weigh 

against finding that it WI; intended to apply to the nev amendments, 

these considerations are not compelline. Section if (4) (A) authorize6 

a state agency to allov 01: require *n “employat to take &vcler.t 

-- 

compensatory time off during the 12-month period follovlng the end of 

the vorkveek.” (Emphasis added). The 1985 amendments do uot 

authorize "equivalent" cor:pensatory time off. They require tloc cff 

“at a rate not less that, one and cne-half hours for each tour of 

employment for vhich overtime compensation is required by this 

section.” Pub.L. 99-lSO,, 52(a)(l) (to be codified as 29 U.S.C. 

6207 (0) (1)). Section 21(4)(S) grants the employing agency the 

discretion, in crises in ,vhich granting compensatory tine off 1s 

impractical, to pay the ea!ployee for overtime at the rate of ode and 

one-half times the employw’s regular rnte pf pay. It Ccts not seem 

likely that the 1eglslature intended to grent state agencies the discretion to choose brtveen g;iving equal time off snd time and cnc--half 

PAY. Thus, the term “equivalent” in section 2f (&)(A) need not be road 

as a limit on time off to one hour of leave for one bour of overtinc. 

The legislature intended subsection 2f(4) to bpply if Congress 

enacted legislation exclwiing state employees; they did not hove the 

benefit of knoving exact:ly vhet that legislation vould provide. 

Accordingly, state agencies may allov or require employees to take 

time off during the 12-month period following the end of the workweek. 

but the time off must be nt s rate of not less than one and one-half 

hours for each hour of overt-. 

In contrbst, sact%ou 2f(l) authorizes an agency to allov or 

require Its Lmployees “to take c~pensatory time off during the sama 

JJ Y period, at the rnte of l-1/2 hour6 off for each hour of ovcrtlme.~ 

(;mphssis added). This rc!qulrement VAS included only in an effort to 

comply vlth the FLSA as It existed vhen Garcia vbs decided last 

spring. Court jnterpretations of the lT.SA indicate thst the act 

allowed compensatory time off In lieu of payment only if time off vns 

P. 2176 
Mr. Lawrence F. Alvin - Page 6 (JtI-475) 

granted during the ssw pimp period. see Dunlop v. Few Jersey. 522 

F.2d 504. Sll (3d Cir. 1075). vacated a remanded for consideration 

of National League of CltleL sub nom New Jersey v. 0s~~. 427 U.S. 909 

(1976). The 1985 amendment6 do not contain this requirement. Thus, 

the requlrrmcnt that cvert1u.e time off be taken during the same pay 

period is Inconsistent both ulth the 1985 smendments and vlth the 

leglslatlve lnteut behind sectlcn 2f (4). 

Ey enacting bection 2,f!l), the Texas Legislature has clearly 

evldenccd the intent to comply with the FLSA. For trample, the l&St 

paragraph of section 2f(l) indicates simply that exceptions to the 

workweek overtime cslcula~::~ons for certsin cstcgorirs of employeas 

“shall be made in accordawe with the FLSA.” Py enactitg the slternste section, section 2f(4). hovever, the legislature just as clearly 

expressed the intent that state agencies be able to take advantage of 

excluslcns granted hy Congress. ThUS, neither section is strictly 

enforceable. Nevertheless, heccior~6 2f (1) (A) and 2f (4)(A), when taken 

together, express a state poilcy that state agencit-s have sufflcltnt 

authorlry to comply with 6nd to take sdvantage of the exclusions to 

the FLSA enacted in 1985. State agencies may therefore allw or 

require bn employee to take time off, nt the rate of one and one-lrslf 

hours for each hour of ove.rtlre, during the l?-month period following 

the end of the workweek. 

The legislative intent behind sections 2f (1) (A) 

and 2f(4)(A) of article V of the current General 

h~,XOpSiOtiOUS Act, Acts 1485. 69th Leg., ch. 980. 

when taken tcgec:her, express s state policp that 

state sgencies have sufficient authority to comply 

with and to take advantage of the exclusions to 

the Fair Labor Standards Act enacted in 1985. 

Accordingly, state agencies may allw or require 

on employee to tske time off, at the rate of one 

and one-half hours for each hour of overtime, 

during the 12-u:anth period folloving the end of 

the workweek. 

JIkl HATTOX 

Attorney General of TeXaS 

p. 2177 
Er. tu~~cncc F. hlvln - Pqe i (Jfl475) 

.lAcr l!ICHfOuER 

First Arislktent Attorney General 

HARY KF.LLER 

Executive Assistant Attorney General 

ROBERT GRAY 

Special Assistant Attoroty General 

RICK CILPIN 

Cbail-maa. Opinion Comlctec 

Prepared by Jennifer Riggs 

Assistant Attorney General 

p. 2178