Could a Texas state agency require employees to take compensatory time instead of overtime pay under the FLSA rules discussed in 1986?

Texas AG Opinion JM-491: Compensatory Time for Overtime

Plain-English summary

The Texas Rehabilitation Commission asked whether a state agency could allow or require an employee to take compensatory time instead of receiving overtime pay. The appropriations provision offered one and one-half hours off for each overtime hour or, when comp time was impractical and the agency chose, overtime pay at one and one-half times the regular rate. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0491.pdf

JM-491 concluded that the practice was "not inconsistent with the FLSA either as it existed prior to April 15 or as amended." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0491.pdf

For overtime incurred after the federal amendments took effect, the opinion relied on JM-475's conclusion that agencies could allow or require the compensatory time during the 12-month period following the end of the workweek. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0491.pdf

Currency note

This opinion was issued in 1986. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Could a state agency require compensatory time instead of paying overtime?

Yes, under the provisions addressed by JM-491. Its summary said a state agency's practice of "allowing or requiring an employee to take compensatory time off for overtime in lieu of paying overtime compensation under certain circumstances" was not inconsistent with the FLSA. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0491.pdf

What was the exchange rate for compensatory time?

The appropriations provision used "1½ hours off for each hour of overtime." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0491.pdf

Did the time off have to be taken in the same pay period?

Before the federal amendments, the state provision required the time off during the same pay period. For overtime after the amendments took effect, JM-491 referred to JM-475's conclusion that the time could be taken during the following 12-month period. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0491.pdf

Why did the opinion discuss Garcia?

JM-491 said Texas had included the same-pay-period requirement in an effort to comply with the FLSA after the United States Supreme Court's decision in Garcia v. San Antonio Metropolitan Transit Authority. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0491.pdf

Background and statutory framework

The General Appropriations Act provision applied to employees subject to the FLSA. It authorized compensatory time at one and one-half hours per overtime hour and allowed overtime pay at the agency's discretion when comp time was impractical. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0491.pdf

The Fair Labor Standards Amendments changed the treatment of public-sector compensatory time. JM-491 treated the post-amendment question as answered by JM-475 and focused separately on possible liability for agency practices before the amendments took effect. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0491.pdf

Citations and references

• General Appropriations Act article V, section 2f(1)
• Fair Labor Standards Act of 1938, 29 U.S.C. section 201 et seq.
• Fair Labor Standards Amendments of 1985, Pub. L. 99-150
• Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528 (1985)
• Dunlop v. New Jersey, 522 F.2d 504, 511 (3d Cir. 1975), vacated and remanded sub nom. New Jersey v. Usery, 427 U.S. 909 (1976)
• Attorney General Opinions JM-475 (1986) and H-382 (1974)

Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0491.pdf

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-0491
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0491.pdf

Original opinion text

Best-effort transcription from a scanned PDF via OCR. Minor errors may remain; the linked PDF is authoritative.

The Attorney General of Texas

JIM MATTOX
Attorney General

May 19, 1986

Mr. Vernon M. Arrell
Commissioner
Texas Rehabilitation Commission
118 East Riverside Drive
Austin, Texas 78704

Opinion No. JM-491

Re: Whether a state agency may require its employees to take compensatory time in lieu of overtime pay

Dear Mr. Arrell:

You ask whether a conflict exists between the provisions of section 2f(1) of article V of the current General Appropriations Act, Acts 1985, 69th Leg., ch. 980, at 7759, and the Fair Labor Standards Act of 1938, 29 U.S.C. § 201 et seq. (hereinafter FLSA). You wish to know whether a state agency may allow or require an employee to take compensatory time off for overtime instead of paying overtime compensation.

Section 2f(1) provides, in part:

f. OVERTIME. (1) Employees Subject to FLSA. An employee who is subject to the overtime provisions of the Fair Labor Standards Act of 1938, 29 U.S.C. Secs. 201 et seq. (FLSA), is entitled to compensation for overtime as provided by this subdivision.

An employee who is required to work hours in excess of 40 hours in a workweek is entitled to compensation for the excess hours either by:

(A) the agency allowing (or requiring) the employee to take compensatory time off during the same pay period, at the rate of 1½ hours off for each hour of overtime; or

(B) at the discretion of the employing agency, in cases in which granting compensatory time off is impractical, the employee receiving pay for the overtime at the rate equal to 1½ times the employee's regular rate of pay. (Emphasis added.)

The FLSA was amended recently to specify that a public employer may provide an employee with time off, at a rate of 1½ hours of time off for each hour of overtime, in lieu of overtime pay under certain circumstances. See Fair Labor Standards Amendments of 1985, Pub. L. 99-150, § 2(a)(1), 99 Stat. 787 (1985). These amendments took effect April 15, 1986. Id. The 1985 amendments also affected the applicability of section 2f(1)(A) with regard to the time period during which time off must be taken. Attorney General Opinion JM-475 (1986). Opinion JM-475 addressed how the 1985 amendments to the FLSA affected sections 2f(1) and 2f(4) of the current appropriations act. Section 2f(4) is a "contingency provision," contingent upon amendments to the FLSA. Section 2f(4) allows overtime time off to be taken during the 12-month period after the week in which the overtime accrued. Opinion JM-475 concluded that state agencies may allow or require an employee to take time off, at a rate of 1½ hours for each hour of overtime, during the 12-month period following the end of the workweek for overtime incurred on or after April 15, 1986. Accordingly, your question with regard to policy and practice after April 15 is answered in Opinion JM-475.

You are also concerned with potential liability for overtime policy and practice in effect prior to April 15. A state agency's practice of allowing or requiring an employee to take time off in lieu of overtime pay, pursuant to section 2f(1), prior to April 15 does not conflict with the FLSA. As it was applicable prior to April 15, section 2f(1) authorized a state agency to allow or require its employees "to take compensatory time off during the same pay period, at a rate of 1½ hours off for each hour of overtime." As indicated, Opinion JM-475 determined that, because of the legislative intent expressed in section 2f(4) and because of the 1985 amendments to the FLSA, compensatory time off for overtime incurred after April 15 need not be limited to the same pay period.

The "same pay period" requirement was initially included by the Texas Legislature only in an effort to comply with the FLSA as required by the United States Supreme Court in Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528 (1985). See Opinion JM-475. Court interpretations of the version of the FLSA in effect when Garcia was decided indicated that the act allowed compensatory time off in lieu of payment only if time off was granted during the same pay period. See Dunlop v. New Jersey, 522 F.2d 504, 511 (3d Cir. 1975), vacated and remanded on other grounds for consideration of National League of Cities sub nom. New Jersey v. Usery, 427 U.S. 909 (1976); Attorney General Opinion H-382 (1974). Accordingly, the practice of allowing or requiring an employee to take compensatory time off for overtime worked in lieu of paying overtime compensation under certain circumstances is not inconsistent with the FLSA either as it existed prior to April 15 or as amended. See also Pub. L. 99-150, § 2(c) (limitation of liability of states and political subdivisions for actions prior to April 15, 1986).

SUMMARY

A state agency's practice of allowing or requiring an employee to take compensatory time off for overtime in lieu of paying overtime compensation under certain circumstances is not inconsistent with the FLSA as it existed prior to April 15 or as amended.

JIM MATTOX
Attorney General of Texas

JACK HIGHTOWER
First Assistant Attorney General

MARY KELLER
Executive Assistant Attorney General

ROBERT GRAY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Jennifer Riggs
Assistant Attorney General