# TheAttorney GeneralofTexas
April 15, 1986 JIMMAllOX AttorneyGeneral

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** tanAntonio.

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

DearHr. Alwla:
Youask: Op~nloa No.Jl+475
Xc: Compensatoq time endlor wtttime psy for state employeeb after April 15, 1986

Whatdoes **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 SutmtmcCourt's decision in Garcia v. Ssn Ant+o Metropolitan Trsnslt iuthoritp, 105 S.Ct. 1005. U.S. (1985). on the Pair Lsbor Standards Amendmentsof 1985. pub.L. 99-150, Stat. (1985). andonsection 2f of article Vof 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, andhowthey affect section 2f. Theamendmentsbecome effrctlve cnApril 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 

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mployws a mlnimumhourly 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 As originally enacted, **the** ?I.!% **of** 1938 specifically excluded the states and their political subdivisions from its provisions.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 

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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 Amendmentsof 1961. 02(c), 9, 75 **Stat.** 65.71; **Pair** Labor Standards Amendmentsof 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 andtheir political subdivisions. See Garcia -Mr. Lawrence P. Alvlo - Page 2 (Jx-475)

v. SanAntonio 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). andac exemptlon for elected officeholders and cartaloof thcfr employees. See 5203(e) (2)(C). - The Fair Labor Standards Amendmtntsof 1985, Pub.L. 99-150, vare enacted in response to tht United Statee SupremeCourt’s decision in Carcia. TheGsrcla case is thewst recent of asarles of significant cases **which** axed **the** constitutionality **of** applying **the FLSA**  **to** the states. Tht combined l ::l:ect of tht amendmentsvhlch 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 197’1to 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. 426U.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 minimumvagc 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

. TheCourt renBoMd broadly that oucc apaver 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 Azendrmntorjudicially created limitrtions se affirmative state shields to federal action. Theprimary impact of the Garcia decision wasthe 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 andlocalltics bacome nolonger aconstitutional issue. It became spolicy matter to ha resolved ln the course of the lcgi6latlve process. 10s s.ct. at 1020-21.
Whenthe Garcia declelon was handed down, the FL.SAminimum‘sage and overtime provisions extended to virtually all employers of the states andtheir 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 whenit passed the 1574 amendments. Order that rctrtding, once cmindividul 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 1085created newexceptions for public employees. You rwe concerned about the effect of these amendment6onthe 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, %rrpertinent part:
**f.** OVERTIME. (1) Employees Subject **to** FLSA.

Anemployee who !Lssubject to overtime provisions of the Fair Labcr Standards Act of 1938, 29U.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 urgencyallowing (or requiring) the employee to take compensatory time off during **the** banepayjleriod, 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 ILwhich 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 ofpby.

. . . . (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 payandcompens&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 mUstbe **t&n.** Section Zf(1) appliw to cmployaas subject to **the** PLSAvhile **section** 2f(4) applies “[IIf stntc employees nre excluded generally from the application of t.heFLSAAS6 result of a ccurt declsicn or sratutory chbnge.

. . .” As indicpted In **the** discussion above, the Gnrcin declsiun WASthe result ofAsharply divided court. TheTe%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,cnpplicstion of **the FLSA.** 

**. .**  **.I ’** 

p. 2175Fr. 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 mayprovide compensatory time **off** in lieu ofovertime compcnsatlon **pAymeW** In certain **circumstruces.** Pub.1.. 99-150, I2 (to be codified AS29 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 workfor fire protection and lnv enforcement. (2) occnsional or sporadic employment, and (3) eubstitutlon. Pub.L. 99-153, 13 (to be codified as 29D.S.C. EX7(p)). Pub.L. 99-150, 14 (to be CDdlfied AS29U.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. Theissue 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. Theyrequire 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 sndtime and cnc--half PAY. Thus, the term “equivalent” in **section** 2f(&)(A) need not be road as a limit on time off to onehour of leave for onebour **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** endof the workweek. but the time off mustbe nt s rate of not less thanone 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 JJYperiod, 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. 2176Mr. Lawrence F. Alvin - Page 6 (JtI-475)

granted during **the** ssw **pimp**period. see Dunlopv. Few Jersey. 522 F.2d 504. Sll (3d Cir. 1075). vacated a remandedfor consideration of National League of CltleL sub nomNewJersey v. 0s~~. 427U.S. 909 (1976). The 1985 amendment6do not contain this requirement. Thus, **the requlrrmcnt**  that **cvert1u.e time**  off **be taken**  during the samepay 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 madein accordawe **with** the FLSA.” Pyenactitg **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) and2f(4)(A), whentaken together, express a state poilcy that state agencit-s **have** sufflcltnt authorlry to comply **with** 6nd to take sdvantage of the exclusions to the FLSAenacted in 1985. State agencies maytherefore allw or require bnemployee to take time off, nt the rate of one andone-lrslf hours for each hour of **ove.rtlre,** during the l?-month period following the endof **the** workweek.

Thelegislative intent behind sections 2f(1)(A) and 2f(4)(A) of article V of **the** current General h~,XOpSiOtiOUS **Act, Acts**  1485. 69thLeg., 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 mayallw 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 theworkweek.

JIkl HATTOX Attorney General of TeXaS

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

**.lAcr l!ICHfOuER**  First **Arislktent** Attorney General
HARYKF.LLER Executive **Assistant Attorney**  General
ROBERT

GRAY Special Assistant Attoroty General
RICKCILPIN **Cbail-maa. Opinion**  **Comlctec** Prepared by Jennifer Riggs Assistant Attorney General

**p. 2178**