Legislative Changes Affecting Salary Administration, 89th Legislature

Overview

Applicable to

State agencies and institutions of higher education.

Summary

The 89th Legislature, Regular Session, made a number of changes to the salary administration laws:

• Retirement rates for fiscal 2026 and fiscal 2027
• Changes to leave administration
• Changes to salary/HR administration

The Texas Comptroller of Public Accounts (Comptroller’s office) is providing these general guidelines for the changes to be implemented in the Human Resource Information System (HRIS), Standardized Payroll/Personnel Reporting System (SPRS) and the Centralized Accounting and Payroll/Personnel System (CAPPS) HR/Payroll.

ERS, TRS and ORP Retirement Rates for Fiscal 2026 and Fiscal 2027

ERS Retirement Rates for Fiscal 2026 and Fiscal 2027

The employee and state contribution rates for the following plans will not change for fiscal 2026 or 2027:

• Employees Retirement System of Texas (ERS)
• Law Enforcement and Custodial Officer Supplemental (LECOS) Retirement Fund
• Judicial Retirement System Plan 1 (JRS1)
  – and –
• Judicial Retirement System Plan 2 (JRS2)

The table below outlines the rates effective Sept. 1, 2025, through Aug. 31, 2027.

Retirement Plan	Employee Contribution Rate		State Contribution Rate1
	Fiscal 2026	Fiscal 2027	Fiscal 2026	Fiscal 2027
ERS Groups 1-32	9.5%	9.5%	9.5%	9.5%
LECOS Groups 1-32	0.5%	0.5%	1.75%	1.75%
ERS Group 43	6.0%	6.0%	9.5%	9.5%
LECOS Group 43	2.0%	2.0%	1.75%	1.75%
Judicial Retirement Plan 1	9.5%	9.5%	0.0%	0.0%
Judicial Retirement Plan 24	9.5%	9.5%	19.25%	19.25%
Judicial Retirement Plan 2 Group 45	6.0%	6.0%	19.25%	19.25%
1This rate is pursuant to Senate Bill 1, Article I, Employees Retirement System Riders 4, 5 and 6. 2These rates are applicable to employees, including members of the Legislature, who were members of ERS before Sept. 1, 2022. 3These rates are for the cash balance retirement program created by Senate Bill 321, 87th Legislature, for employees, including members of the Legislature, hired on or after Sept. 1, 2022. 4These rates are applicable to judges and justices who were members of JRS Plan 2 before Sept. 1, 2024. 5These rates are for the cash balance retirement program created by Senate Bill 1245, 88th Legislature, for judges and justices who take office on or after Sept. 1, 2024.

The payroll retirement contribution will continue to be paid by agencies at the rate of 0.5 percent of base salary for all employees who are members of the retirement system. It will be paid from the agencies’ budgets.

TRS Retirement Rates for Fiscal 2026 and Fiscal 2027

For employees covered by Teacher Retirement System of Texas (TRS), both the employee and the state contribution rate will remain 8.25 percent for fiscal 2026 and 2027.

Optional Retirement Program (ORP) Rates for Fiscal 2026 and Fiscal 2027

For employees participating in the Optional Retirement Program (ORP), the state contribution rate will remain at 6.6 percent for both fiscal 2026 and fiscal 2027. Employers are authorized to use local funds or other sources of funds to supplement the General Revenue Fund appropriation at a rate up to 1.9 percent. The employee contribution rate will remain at 6.65 percent for both fiscal 2026 and fiscal 2027.

Changes to Leave Administration

Legislative Leave Pool

House Bill 1828 allows Texas Department of Criminal Justice (TDCJ) correctional officers to voluntarily transfer up to eight hours of their accrued compensatory time or annual leave per year to a legislative leave pool. A TDCJ correctional officer may only withdraw time from the legislative leave pool in coordination with and with the consent of the president or designee of the association. The amount of leave that may be withdrawn from the pool may not exceed 80 hours in a 160-hour work cycle or 480 hours in a fiscal year.

Military Leave

House Bill 2513 establishes that a 24-hour or 48-hour work shift constitutes one workday for purposes of calculating the payment amount for a paid leave of absence from duties for qualifying military service in a fiscal year for a person classified as fire protection personnel, as defined in Texas Government Code, Section 419.021, who is an officer or employee of the state or a political subdivision and who is a member of the Texas military forces, a reserve component of the armed forces, or a member of a state or federally authorized urban search and rescue team.

Compensatory Time for TDCJ Employees

Senate Bill 2405 removes the provision in Texas Government Code that requires TDCJ employees’ compensatory time off to expire if it is not taken during the 24-month period following the end of the workweek it was accrued in. Instead, compensatory time off that is not taken within the 24-month period will be credited to the employee’s annual leave balance.

Changes to Salary/HR Administration

Changes to Salary Schedule

The General Appropriations Act (GAA), Article IX, Part 2, contains the approved salary schedules for employees covered by the Position Classification Plan for fiscal 2026 and 2027. Salary group A4 is removed from salary schedule A and a new salary group, B37, is added to salary schedule B. The salary amounts for the rest of the salary groups on salary schedules A, B and C for fiscal 2026 and fiscal 2027 are unchanged from the amounts in fiscal 2025. See the Classification Salary Schedule for Fiscal 2026-27.

New Salary Schedule C Job Classifications and Changes to Hazardous Duty Pay Eligibility

House Bill 2467 requires commissioned peace officers of the State Fire Marshal’s Office at the Texas Department of Insurance to be compensated according to salary schedule C. Additionally, it changes hazardous duty pay authority to entitle these employees to receive that pay. This bill also authorizes paid leave for these employees as the result of an injury incurred in the performance of the officer’s duties so long as the injury does not occur due to the officer’s negligence or while performing routine office duties.

Senate Bill 502 requires commissioned peace officers of the Health and Human Services Commission’s Office of Inspector General (OIG) to be compensated according to salary schedule C. Additionally, it changes hazardous duty pay authority to entitle these OIG employees to receive that pay. This bill also authorizes paid leave for these employees as the result of an injury incurred in the performance of the officer’s duties so long as the injury does not occur due to the officer’s negligence or while performing routine office duties.

Senate Bill 1171 requires commissioned peace officers of the Texas Juvenile Justice Department’s Office of Inspector General (OIG) to be compensated according to salary schedule C. Additionally, it makes changes to hazardous duty pay authority to entitle these OIG employees to receive that pay. This bill also authorizes paid leave for these employees as the result of an injury incurred in the performance of the officer’s duties so long as the injury does not occur due to the officer’s negligence or while performing routine office duties.

Senate Bill 1321 requires commissioned peace officers of the Texas Commission on Law Enforcement to be compensated according to salary schedule C. Additionally, it makes changes to hazardous duty pay authority to entitle these employees to receive that pay. This bill also authorizes paid leave for these employees as the result of an injury incurred in the performance of the officer’s duties so long as the injury does not occur due to the officer’s negligence or while performing routine office duties.

Exceptions for Salary Schedule C

The stipend amounts authorized in the GAA, Article IX, Section 3.12 for commissioned peace officers at certain agencies are increasing.

Education level and certification level monthly pay amounts are changing from $50, $100 and $150 to $100, $200 and $300 for each respective level, while the monthly bilingual pay stipend amount is increasing to $100 from $50.

Additionally, beginning Sept. 1, 2025, eligible commissioned peace officers are no longer limited to receiving either the education level or certification level stipend in the same month; if eligible, they can receive both stipends.

Payroll Contribution for Group Health Insurance

The GAA, Article IX, Section 17.03, continues the requirement for each state agency and institution of higher education included in the group benefits program for the state fiscal biennium beginning Sept. 1, 2025, to contribute an amount equal to 1.0 percent of the total base wages and salaries for each benefits-eligible employee of a state agency or institution of higher education to the ERS group benefits program.

For this requirement, “institution of higher education” does not include components within the University of Texas or Texas A&M University systems.

The calculation of base salary excludes longevity pay, hazardous duty pay, benefit replacement pay, overtime pay and other payments that are not part of the base salary of the employee.