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
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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:
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