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Legislative Changes Affecting Salary Administration, 81st Legislature

FPP F.021

ERS and TRS retirement rates change January 2010

The Comptroller's office was advised that the retirement rates for members of the Employees Retirement System (ERS), as well as the state match for members of both ERS and the Teacher Retirement System (TRS), increased as of the January 2010 pay period. These changes were pursuant to Senate Bill 1, Article IX, Section 17.13. The new rates are as follows:

  • For employees covered by ERS, the employee contribution will be 6.5 percent of the retirement eligible wages.
  • For the state match for employees covered by ERS, the contribution will be 6.95 percent of the retirement wages. The same rate will be used as the surcharge for return-to-work retirees who retired on or after Sept. 1, 2009.
  • For employees covered by TRS, the state match will be 6.644 percent of the retirement eligible wages.

For background information, please see ACR 28566 – USPS System Change.

One-time retention bonus payment for certain employees

Section 89 of House Bill 4586, 81st Legislature, Regular Session, authorizes an $800 One-Time Retention Bonus Payment for Certain Employees.

Changes to salary schedules

Senate Bill 1, 81st Legislature, Regular Session, also known as the General Appropriations Act (GAA), contains the approved salary schedules for employees covered by the Position Classification Act in Article IX, Part 2.

Salary Schedule A previously included pay groups A2 through A18. Schedule A now contains a minimum and maximum salary for pay groups A3 through A20. Agencies can use any salary within the appropriate pay group for job classifications associated with Salary Schedule A. There is no authority to pay a salary below the minimum salary for a pay group and there is no authority to pay a salary above the maximum salary for the pay group.

Salary Schedule B previously included paygroups B1 through B22. Pay groups B1 through B9 were eliminated and pay groups B23 through B35 added. Thus, Schedule B now contains a minimum and maximum salary for pay groups B10 through B35. Agencies can use any salary within the appropriate pay group for job classifications associated with Salary Schedule B. There is no authority to pay a salary below the minimum salary for a pay group and there is no authority to pay a salary above the maximum salary for the pay group.

Salary Schedule C remains in the same format as the previous year. It is important to note that there is an increase in the salaries for Salary Schedule C. Agencies must assign employees whose job classification is related to Salary Schedule C to the appropriate pay group and, in some cases, step. There is no authority to pay any salary other than those listed for Salary Schedule C.

Changes to leave administration

Senate Bill 833 provides authority for certain state employees to accrue vacation or sick leave after a military leave of absence. Those employees who are on an unpaid leave of absence during military duty are entitled to accrue vacation and sick leave for the period of the leave of absence, upon return from military duty. The employees affected by this change are those called to active duty during a national emergency to serve in a reserve component of the armed forces of the United States under Title 10 or 32, United States Code.

House Bill 1462 provides for leave for certain employees who volunteer or participate in training for Court Appointed Special Advocates. This bill provides for up to five hours of paid leave per month for employees to participate in mandatory training or perform volunteer services for Court Appointed Special Advocates without a deduction in salary or loss of vacation time, sick leave, earned overtime credit, or state compensatory time.

Senate Bill 687 changes Government Code, Section 661.918, providing clarification on the injury leave for peace officers injured in the line of duty. It stipulates that a peace officer is entitled to injury leave without a deduction in salary, without being required to use compensatory time off and without being required to use any other type of leave, for an injury sustained due to the nature of the officer's duties occurring during the course of the officer's performance of duty. Exception: An officer is not entitled to injury leave if the officer's own gross negligence contributed to the officer's injury, or the injury was related to the performance of routine office duties.

Senate Bill 1474 provides that state employees who are emergency services personnel and not subject to the overtime provisions of the Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.) may be allowed to take compensatory time off during the 18-month period following the period the time was earned. If the administrative head of an agency so authorizes, the employee may be paid all or a portion of the compensatory time accrued during the 18 months following the declared disaster. Emergency services personnel is defined to include firefighters, police officers and other peace officers, emergency medical technicians, emergency management personnel and other individuals who are required to provide services for the general public during emergency situations in the course and scope of their employment. This change does not apply to an employee of the lieutenant governor or a legislative agency.

Changes to compensation for certain state employees working during a disaster or emergency situation

Senate Bill 2298 relates to compensation for certain state employees. It provides that:

  • If the administrative head of an agency or that person’s designee so authorizes, an employee may be paid for the hours of compensatory time the employee earns for work directly related to a disaster or emergency declared by the appropriate officer of the state or federal government.
  • If the administrative head of an agency or that person’s designee authorizes, an employee of a state mental health or mental retardation facility may be paid for any unused compensatory time, if the employing agency determines taking the compensatory time off would disrupt the normal business functions of the agency.
  • An employee may accumulate compensatory time off for hours worked during any calendar week at the employee’s personal residence if the employee obtains the advance approval of the administrative head of the employing agency or that person’s designee.
  • The six-month limitations related to one-time merit payments do not apply if the administrative head of an agency or institution of higher education determines in writing that the merit payment is awarded due to the employee's performance during a natural disaster or other extraordinary circumstance. This means that a one-time merit payment can be made within six months of the last promotion, enhanced compensation award, merit increase or one-time merit payment, if it is determined as being made because of performance related to the natural disaster or other extraordinary circumstance.

Other changes to ERS programs

Several bills this legislative session impacted ERS programs. Not all bills affecting ERS are discussed here. Only certain provisions of bills which impact Comptroller systems or agency procedures are included below. Please contact ERS for specific questions regarding changes to ERS programs.

Texa$aver plan

House Bill 2283 authorizes ERS to establish a Roth contribution plan and allows for a state match of employee contributions to a 401k plan. Before a deduction for a Roth plan may be established, ERS must develop and obtain IRS approval for plan rules. A state match will not be available this biennium as the Legislature did not appropriate funds for this purpose. Please refer to ERS for specific information concerning HB 2283.

Retirement-related changes

House Bill 2559 authorizes ERS to make certain changes to employee retirement and benefits programs. Please contact ERS for specific information concerning HB 2559.

  • Return-to-work surcharge: Agencies that hire a person who retires from the ERS employee class of membership on or after Sept. 1, 2009, into the employee class of membership will remit a surcharge of 6.45% to ERS for each month the return-to-work retiree is employed by the agency. There are no appropriations for this surcharge. The Comptroller systems were modified to report this new agency contribution/surcharge.
  • Employee retirement contribution: The amount an employee contributes to ERS through payroll deduction was increased to 6.45%, effective for payrolls with a pay period of Sept. 1, 2009, to Dec. 31, 2009. The Comptroller systems were modified to accommodate this change in the deduction percentage.

    Note: See section titled "ERS and TRS retirement rates change January 2010" in this document for new rates.

  • Law Enforcement and Custodial Officer Supplemental Retirement Fund: State employees who are covered under the Law Enforcement and Custodial Officer Supplemental Fund (LECOS) will also see a change to their retirement deduction. ERS was authorized to collect an additional 0.5 percent from the LECOS-covered employee’s retirement deduction, on top of the increase to 6.45%. The Comptroller systems were modified based on this change.

General guidance related to fiscal year changes

Article IX, Section 3.01, provides authority for agencies to hire at any salary within the salary groups. There is no authority to pay an employee a salary below the minimum for the pay group. There is also no authority to pay an employee a salary that is above the maximum of the pay group.

There is no authority to grant salary increases as part of the conversion to the new salary schedules A, B and C, except for employees whose positions are reallocated or reclassified in accordance with Government Code, Sections 654.0155, 654.0165 or 659.254.

Article IX, Section 3.05, provides guidance that a position listed following an agency’s appropriation in the agency’s “Schedule of Exempt Positions” shall receive compensation at a rate not to exceed the amount indicated in the agency’s “Schedule of Exempt Positions.” The fact that the not-to-exceed salary listed in the agency’s “Schedule of Exempt Positions” is higher than the salary the exempt position currently earns does not mean there is an automatic increase in the salary for the exempt position.

There are three opportunities to increase the salary for the exempt position to any amount up to the not-to-exceed limit found in the agency’s “Schedule of Exempt Positions”:

  • If the exempt position is one listed in Article IX, Section 3.05(b)(3), the Governor may set the rate of compensation to an amount greater than the limit in the agency’s “Schedule of Exempt Positions” but not less than the minimum salary for the group in Section 3.05(b)(2) and not greater than the maximum for that group.
  • The governing board for agencies listed in Section 3.05 (c)(6) may make a request to increase the salary for the exempt position to an amount not less than the minimum for the group listed in the agency’s “Schedule of Exempt Positions,” and not greater than the maximum for that group. To do this, the board must submit a request to the Legislative Budget Board (LBB) and the Governor. The request must include the date on which the board approved the request, a statement justifying the need to exceed the limitation and the source of funds to be used to pay the additional salary amount. The governing board may make a request only once per fiscal year. The rate increase shall be considered approved if neither the LBB nor the Governor issues a written disapproval of the proposal not later than the tenth business day after the date the staff of the LBB concludes a review of the requested rate increase and forwards the result of its findings to the Chair of the House Committee on Appropriations, Chair of the Senate Committee on Finance, the Speaker of the House and the Lieutenant Governor. Once the proposed rate increase is approved, the LBB will notify the affected agency, the Governor's Office and the Comptroller of Public Accounts.
  • If the governing board for any other agency wants to increase the exempt salary to an amount not-to-exceed the limitation set in the agency’s “Schedule of Exempt Positions,” the increase must be approved by the board in a public meeting. Written notification signed by the presiding officer of the governing board must be submitted to the Governor, the LBB and the Comptroller of Public Accounts.