Court Opinion

ID: 4132734
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:29:47.758868+00
Date Added: 2024-06-11T14:21:38.844563
License: Public Domain

NE-Y    GEXEECAL
                                       OF      TEXAS
                                 AUSTIN.       TEXAS        78711

                                            July 22, 1975

The Honorable    W.          J. Estelle,      Jr.                    Opinion    No. H- 645
Director
Texas Department             of Corrections                          Re:    Computation    of hourly
Huntsville,  Texas           77340                                   rate   of pay.

Dear   Mr.     Estelle:

      You have requested  our opinion concerning   the proper method                      by which
the hourly rate of pay should be determined    from a monthly  salary.                      Specifi-
cally you ask:

                      Should the hourly rate of pay for a state employee      be
                      determined     by dividing the monthly pay by the. hours
                      of work required      for any given month?
                      In calculating    the hourly rate of compensation  for any
                      given month, would the number of hours to be worked
                      be reduced by eight hours per legal holiday per month
                      in arriving    at the hourly  rate?

       The   Comptroller         of Public     Accounts     is charged   with   the duty to:

                          [ s 1uperintend the fiscal concerns   of the State, as the
                          sole accounting   officer thereof,  and manage the same
                          in the manner required     by law. V. T. C. S. art. 4344( 3).

Accordingly,      in our opinion the Comptroller                has the responsibility     to determine
the proper     method for computation   of hourly               rates of pay pursuant      to which he
is to issue    warrants.

      In Attorney   General   Opinion H-465( 1974) we noted that the Fair Labor
Standards    Act had been made applicable      to state employees.         Consequently,
we held that the hourly rate of pay for overtime          purposes    must be computed    in
accordance     with federal  statutes.   However,     the application    of the 1974 amend-
ments to the FLSA has been stayed.         National     League of Cities v. Brennan,      95
S. Ct. 532 (1974).     Thus the ultimate   application    of the FLSA to the state will
depend on the result of that pending case.         The normal method of computation
under the FLSA is to multiply       the monthly   salary by twelve,       divide by 52 and
then divide by the usual number of work hours in a week.               Attorney   General
Opinion H-465.      However,    the Department     of Labor has issued regulations

                                               p, 2834
The Honorable       W.   J. Estelle,     Jr.   - Page   2

permitting   the use of alternative      methods which involve the same general
mathematical    concepts.      In particular,   29 C. F. R. 548. 3(a)(1973) permits
the use of an hourly      rate which is computed     each month rather than over an
entire year,   providing:

                     (a) A rate per hour which is obtained by dividing
                     a monthly or semi-monthly        salary by the number
                     of regular   working   days in each monthly or semi-
                     monthly period and then by the number of hours in
                     the normal    or regular   workday.      Such a rate may
                     be used to compute overtime        compensation     for all
                     the overtime    hours worked by the employee         during
                     the monthly or semi-monthly         period for which the
                     salary is paid.

See also, 29 C. F. R. 778.113 (b), which provides                   that the resultant       rate in
such a case must not be less than the statutory                 minimum        wage.     The Comptrol-
ler has determined        the “monthly”       alternative    to be the most reasonable            and the
fairest  method when utilized         for general       purposes.      We note that no one method
works    perfectly     in all instances.       While the “monthly”          alternative     results   in
some monthly variation          in hourly rates,        the “yearly”     alternative     is difficult   to
use in a partial     month computation.           We do not doubt that the utilization             of one
method for all purposes          is the most practical        approach,       and in our view the
Comptroller’s      determination       should not be disturbed          unless it is clearly        un-
reasonable.      In light of the regulations         of the Department         of Labor,      in our view
the “monthly”      alternative     is clearly     reasonable.       Consequently,        we answer
your first question       in the affirmative.        But
                                                     --    see  article    V,   § 2,  of S. B. 52 (1975),
the General    Appropriations        Act enacted by the 64th Legislature               which generally
will require    the hourly rate to be determined             by dividing the annual salary by
2080 hours (ie.,       52 weeks x 40 hours/week).              That computation         will be required
beginning    September       1, 1975.

      Your second question        concerns    the effect of a legal holiday on the hourly
rate for a particular      month.      The Comptroller     has determined        that a holiday
would have no effect on the computation            in that the holiday would be included in
the number of working        days within the particular        month.     In our view this de-
termination    is entirely    correct.     A method which excluded holidays             from the
total work days in a month would result in a higher hourly rate.                     We do not be-
lieve that the Legislature       in providing    for paid holidays      intended to raise the
hourly    rate beyond what it otherwise        would be.      In addition,    the Department      of
Labor has interpreted       their regulations      to require    the conclusion      reached by the
Comptroller.       29 C-F-R.      548. 301 (b), Example.        Accordingly,       it is our opinion
that holidays    are to be included as “regular         working    days” in the computation         of
hourly rates of pay.

                                          p. 2835
The Honorable    W.   J.   Estelle,    Jr.   - Page   3

                                      SUMMARY

                      The Comptroller     may determine    the
                      hourly   rate of pay from a monthly
                      salary by dividing the monthly    sal-
                      ary by the number of regular    work-
                      ing days in each month,   including holi-
                      days, and then dividing  the result by
                      the number of hours in the normal
                      workday.

                                                  /4rery   truly   yours,

                                                      JOHN L. HILL
                                                      Attorney General      of Texas

Opinion   Committee

jad:

                                        p. 2836