Untitled Texas Attorney General Opinion

OFFlCE OF THE ATTORNEY GENERAL. STATE OF TEXAS

JOHN CORNYN

March 1,200O

Ms. Karen F. Hale Opinion No. JC-0188
Commissioner
Texas Department of Mental Health Re: Whether a state agency may require an
and Mental Retardation employee to exhaust compensatory leave
909 West 45th Street before receiving workers’ compensation
Austin, Texas 7871 l-2668 benefits (RQ-0119-JC)

Dear Commissioner Hale:

You ask whether state agencies have the authority to require an employee to exhaust
accumulated compensatory leave before receiving weekly income benefits under the workers’
compensation provisions of Texas law. We conclude that state agencies may not require employees
to exhaust their compensatory leave before receiving weekly income benefits under the workers’
compensation law. If state agencies lack such authority, you ask whether state agencies may prohibit
an employee from using compensatory leave while drawing weekly income benefits under the
workers’ compensation law. We conclude that state agencies lack authority to prohibit their
employees from using compensatory leave while receiving weekly income benefits under the
workers’ compensation law.

A state employee who receives a compensable injury is entitled to the compensation provided
by chapter 501 of the Labor Code, which may include temporary income benefits paid on a weekly
basis as compensation for lost wages. See TEX. LAB. CODE ANN. 5 501.021 (Vernon 1996); see id.
$5 408.081, .lOl-,105 (Vernon 1996 & Supp. 2000); see also id. 5 501.002(a)(6) (Vernon Supp.
2000) (incorporating provisions of chapter 408 of the Labor Code into chapter 501, with certain
exceptions). If the employee’s disability continues for longer than one week, weekly income
benefits begin to accrue on the eighth day after the injury, or, if the disability does not begin at once
after the injury, on the eighth day after it does begin. See id. 5 408.082 (Vernon 1996). As a general
rule, income benefits are paid weekly as and when they accrue without an order from the Workers’
Compensation Commission, see id. 5 408.081 (Vernon Supp. ZOOO),until the employee has attained
maximum medical improvement. Id. $4 408.08 1, ,101. The usual temporary income benefit equals
seventy percent ofthe employee’s average weekly wage, subject to limits set out in sections 408.061
and 408.062 ofthe Labor Code. See id. § 408.126; see also Tex. Att’y Gen. Gp. No. JC-0040 (1999)
at 2.

An employee who takes compensatory leave while receiving workers’ compensation benefits
will ordinarily receive 170 percent of his usual salary. See Letter t%om Ms. Karen Hale,
Ms. Karen F. Hale - Page 2 (X-0188)

Commissioner, Texas Department of Mental Health and Mental Retardation, to Honorable
John Comyn, Attorney General of Texas, at 1 (Sept. 30, 1999). You suggest that the employee’s
receipt of this amount “acts as a disincentive to return to work as quickly as possible following a
work-related illness or injury.” Id. You ask whether state agencies may require an employee to
exhaust accumulated compensatory leave before receiving weekly income benefits under the
workers’ compensation law. See id.

Compensatory leave, also known as compensatory time, is paid leave time received by a state
employee as compensation for overtime work. For example, section 662.007 of the Government
Code provides that a state employee who is required to work on a national or state holiday is entitled
to compensatory time off during the next twelve months, See TEX. GOV’TCODEANN. 5 662.007(a)
(Vernon Supp. 2000). The employee must give reasonable notice of his or her intention to use the
compensatory time but is not required to say how it will be used. See id. 5 662.007(b). Other
provisions apply to specific agencies. See id. 5 411.016(e) (Vernon 1998) (if appropriated funds are
inadequate for supplemental pay for certain Department of Public Safety officers, director may
provide compensatory time); 5 443.0054 (Vernon Supp. 2000) (compensatory time for employees
of State Preservation Board who are not subject to overtime provisions of Fair Labor Standards Act
of 1938).

The general provisions governing overtime and compensatory time for state employees,
formerly found in the biennial Appropriations Act, are now codified as subchapter B, chapter 659
of the Government Code. See Act of May 11,1999,76th Leg., R.S., ch. 279, $5 12,27,1999 Tex.
Gen. Laws 1147, 1150-53, 1168. Section 659.016 applies to state employees who are not subject
to the Fair Labor Standards Act (“FLSA”) and are not legislative employees. See TEX.GOV’TCODE
ANN. 8 659.017 (Vernon Supp. 2000) (overtime compensation for legislative employees). As arule,
employees accrue compensatory time at the rate of one hour for each hour worked in excess of forty
hours a week. See id. $ 659.016(b); see also id. 5 659.016(c), (d), (h) (exceptions for employee
exempt as executive, professional, or administrative employee under 29 U.S.C. 5 213(a)(l) (1994
& Supps. II &III) and for staffmember, appointee, or immediate adviser ofan elected officeholder).
An employee covered by section 659.016 may not be paid for any unused compensatory time. See
id. 5 659.016(f).

Section 659.015 of the Government Code applies “only to a state employee who is subject
to the overtime provisions of the federal Fair Labor Standards Act of 1938,” and who is not an
employee of the legislature or of a legislative agency. Id. 5 659.015(a); see also 29 U.S.C. 5 207(o)
(1994 & Supps. I, II & III) (provision of FLSA on compensatory time for public employees).’ See

‘TheUnitedStatesSupremeCourthas held that the provisionof the Fair LaborStandardsAct purportingto
authorizeprivate actionsagainststatesin statecourtswithouttheir consentis an unconstitutionalabrogationof state
sovereignimmunity.SeeAlden v. Maine, 119S. Ct.2240,2246(1999)(actionby stateprobationofficersagainststate
for violationof overtimeprovisionsof FairLaborStandardsAct). See also Seminole Tribe ofFlu. v. Florida, 5 17US.
44 (1996)(Congresslacks powerunder Article I of the UnitedStatesConstitutionto abrogatethe states’sovereign
immunityin federalcourt).
Ms. Karen F. Hale - Page 3 (JC-0188)

generally Tex. Att’y Gen. Op. Nos. JM-680 (1987); JM-491 (1986); JM-475 (1986) (applicationof
FLSA overtime and compensatory time rules to state employees). Employees subject to the
overtime provisions of the Fair Labor Standards Act are entitled to compensation for overtime as
provided by federal law and by section 659.015. See TEX. GOV’T CODE ANN. 5 659.015(b) (Vernon
Supp. 2000). If an employee within section 659.015 is required to work hours in excess of forty
hours in a workweek, he or she is entitled to compensation for the excess hours either by “the agency
allowing or requiring the employee to take compensatory time off at the rate of 1% hours for each
hour of overtime,” or, “at the discretion of the employing agency, in cases in which granting
compensatory time off is impractical,” by the employee receiving overtime pay at the rate of one and
one-half times the employee’s regular rate of pay. Id. 5 659.015(c). Employees, with certain
exceptions, may accumulate no more than 240 hours of overtime credit that may be taken as
compensatory leave. See id. 5 659.015(e). A different rate of compensatory time applies if the
employee does not work more than forty hours in the workweek but the hours worked plus paid
leave taken exceed forty hours in the workweek. In this case, the employee is entitled to an hour of
compensatory leave for each excess hour. See id. $659.015(f). This compensatory time will lapse
unless it is used during the twelve-month period after the week in which it was earned. See id. §
659.015(g).

Section 659.022 of the Government Code provides that a state employee whose
compensatory time is subject to lapsing may submit to the employing agency a written request for
permission to use the time, and the state agency shall (1) approve the employee’s request; or (2)
provide the employee with an alternative date on which he or she may use the compensatory time.
See id. 5 659.022. Finally, “[a] state agency shall accommodate to the extent practicable an
employee’s request to use accrued compensatory time.” Id. 5 659.023(b). In summary,
compensatory time is compensation earned by a state employee for overtime work in lieu ofpayment
in money. The employee is entitled to use his or her accrued compensatory leave, subject to
statutory limits on the amounts that may be accrued and the time period during which the leave may
be used.

We find no authority for a state agency to require an employee to exhaust accumulated
compensatory leave before receiving weekly income benefits under the workers’ compensation law.
Section 408.082 ofthe Labor Code sets the time at which weekly income benefits begin to accrue -
on the eighth day after the injury, or, if the disability does not begin at once after the injury, on the
eighth day after it does begin. See TEX. LAB. CODE ANN. 5 408.082 (Vernon 1996). The legislature
has enacted exceptions to section 408.082 of the Labor Code that allow postponement of the time
at which income benefits accrue. If a state employee chooses to use sick leave before receiving
income benefits, section 501.044 ofthe Labor Code postpones the employee’s entitlement to income
benefits until he or she has exhausted the accrued sick leave. See id. 5 501.044(a) (Vernon Supp.
2000). If the employee chooses to use all or any number of weeks of accrued annual leave after
exhausting his or her sick leave, the entitlement to income benefits will be further postponed until
the elected number of weeks of sick leave have been exhausted. See id. $ 501.044(b); see also id.
$5 502.041,503.041 (Vernon 1996) (institutions ofTexas A&M University System and University
of Texas System may provide that an injured employee may remain on the payroll until the
Ms. Karen F. Hale - Page 4 (X-0188)

employee’s annual and sick leave is exhausted, during which time workers’ compensation benefits
do not accrue or become payable). No statute, however, provides that the accrual of weekly income
benefits may be delayed until the injured employee has exhausted his or her compensatory leave.
If the legislature wishes state employees to exhaust accumulated compensatory leave before
receiving weekly income benefits under the workers’ compensation provisions, it may enact a
provision expressing this intent.

Any state statute affecting compensatory time earned under the FLSA must be consistent
with the federal law. The United States Supreme Court has granted a petition for writ of certiorari
to decide whether a public agency governed by the compensatory time provisions ofthe Fair Labor
Standards Act of 1938, 29 U.S.C. 5 207(o) (1994 & Supps. I, II & III), may, absent a preexisting
agreement, require its employees to use accrued compensatory time. Christensen Y. Harris County,
120 S. Ct. 320 (1999). The Fifth Circuit of the United States Court of Appeals has concluded that
the Fair Labor Standards Act is not violated by a state or county policy requiring public employees
to use their accrued compensatory time. Moreau v. Harris County, 158 F.3d 241, 246 (5th Cir.
1998), cert. granted sub nom. Christensen Y. Harris County, 120 S. Ct. 320 (1999) (county policy
required employees of sheriffs department to use compensatory time when their balances reached
a set level); Local 889American Fed’n ofState, County, & Mun. Employees Y. Louisiana, 145 F.3d
280, 284 (5th Cir. 1998) (state required employee to use compensatory time before using annual
leave). The Eighth Circuit has, however, held that it violates the FLSA for an employer to force
employees to take compensatory time. See Heaton v. Moore, 43 F.3d 1176, 1180 (8th Cir. 1994).

The decision of the United States Supreme Court in Christensen v. Harris County will
certainly be relevant to any mture legislation requiring state employees to exhaust accumulated
FLSA compensatory leave before receiving workers’ compensation income benefits, or authorizing
state agencies to impose such a requirement. At present, however, the legislature has neither
imposed such a requirement on state employees nor authorized state agencies to impose this
requirement on their employees. Accordingly, a state agency has no authority to postpone the
accrual of weekly income benefits until an employee has exhausted his or her compensatory leave
accrued under the FLSA or under state law.*

If state agencies cannot require an employee to exhaust accumulated compensatory leave,
you ask whether they may prohibit the use of compensatory leave while drawing such benefits. The
Fair Labor Standards Act provides with respect to compensatory time accrued under its provision
that when a public employee requests to use his or her compensatory time, the employee shall be
permitted by his or her employer to use the time within a reasonable period after making the request,

‘TheStateAuditor’sOfficehasissuedTechnicalUpdate 99-02,whichconcludes,inrelianceona”recentmling
by the FifthCircuitCourtof Appeals,”that stateagenciesmayrequirestateemployeesto exhaustFLSAcompensatory
timebalancesbeforeusingannualleave. SAOTECHNICAL UPDATE99-02(Aug.10,1999).TheTechnicalUpdatewas
issuedbeforethe UnitedStatesSupremeCourtgrantedcertiorariin Chrirtensenv. Harris Comfy. Moreover,it does
not considerwhethera stateagencymay requireemployeesto exhaustcompensatmyleavebeforereceivingweekly
incomebenefitsunder the workers’compensationprovisions.
Ms. Karen F. Hale - Page 5 (JC-0188)

if using the compensatory time “does not unduly disrupt the operations of the public agency.” 29
U.S.C. 5 207(o)(5) (1994). When a state employee is already on leave because of a work-related
illness or injury, it is difficult to see how his or her use of FLSA compensatory leave will unduly
disrupt the operations of the agency.

No statute authorizes state agencies to prohibit the use of state or FLSA compensatory leave
while drawing workers’ compensation income benefits. Under Texas law, a state agency or political
subdivision may not offset workers’ compensation against other benefits or forms of compensation
unless there is express statutory authority to do so. See El Paso County v. Jeffes, 699 S.W.2d 375,
377 (Tex. App.-El Paso 1985, no writ); City of Corpus Christi Y. Herschbach, 536 S.W.2d 653 (Tex.
Civ. App.Corpus Christi 1976, writ refd n.r.e.); Tex. Att’y Gen. Op. Nos. JC-0040 (1999) at 2;
JM-915 (1988) at 4-7; H-701 (1975) at 2. In Attorney General Opinion H-701, this office concluded
that an injured employee who was receiving workers’ compensation benefits could receive pay for
compensatory time and vacation at the same time. “There is no statutory requirement that
workmen’s compensation benefits be offset against payments for compensatory time and vacation,
and therefore no such offset is permitted.” Tex. Att’y Gen. Op. No. H-701 (1975) at 2.

State law in fact requires the employing agency to “accommodate to the extent practicable
an employee’s request to use accrued compensatory time.” TEX. GOV’T CODE ANN. 5 659.023
(Vernon Supp. 2000). Ifcompensatory time is earned by working on a state or national holiday, the
“state employee must give reasonable notice of the employee’s intention to use the compensatory
time but is not required to say how the compensatory time will be used.” TEX. GOV’T CODEANN.
5 662.007(b). Attorney General Opinion MW-414 (1981) stated that this language contemplates a
shared responsibility between employee and supervisor on the use of compensatory time, so that “the
employee is enabled to use his time when most convenient for him to do so, and, on the other hand,
so that the work of the agency is not unduly disturbed by his absence.” Tex. Att’y Gen. Op. No.
MW-414 (1981) at 2. However, when the employee is already absent because of a work-related
illness or injury, the agency cannot claim that he or she must defer using compensatory time to
prevent disturbance of its work. Moreover, if the agency has no right to know why an employee
wants to use compensatory time under this provision, we do not believe it may refuse the request
because it disapproves of the reason for taking compensatory time-that is, because the employee
is on leave due to a work-related illness or injury. If a state employee’s compensatory time is subject
to lapsing, section 659.022 ofthe Government Code requires the employer to approve an employee’s
written request to use the time or provide the employee with an alternative date on which he or she
may use the compensatory time. State agencies not only lack express authority to prohibit
employees from using state or FLSA compensatory leave while drawing workers’ compensation
income benefits, but they also are subject to statutes requiring them to cooperate with an employee’s
request to use accrued compensatory time. We conclude that state agencies may not prohibit their
employees from using compensatory leave while receiving weekly income benefits under the
workers’ compensation law.
Ms. Karen F. Hale - Page 6 (X-0188)

SUMMARY

State agencies lack authority to require employees to exhaust
compensatory leave accrued under state law or the federal Fair Labor
Standards Act before receiving weekly income benefits under the
workers’ compensation law. Nor may state agencies prohibit their
employees from using compensatory leave during the time they are
receiving weekly income benefits under the workers’ compensation
law.

Attorney General of Texas

ANDY TAYLOR
First Assistant Attorney General

CLARK KENT ERVIN
Deputy Attorney General - General Counsel

ELIZABETH ROBINSON
Chair, Opinion Committee

Susan L. Garrison
Assistant Attorney General - Opinion Committee