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TITLE 34PUBLIC FINANCE
PART 1COMPTROLLER OF PUBLIC ACCOUNTS
CHAPTER 5FUNDS MANAGEMENT (FISCAL AFFAIRS)
SUBCHAPTER DCLAIMS PROCESSING--PAYROLL
RULE §5.41Payroll Requirements

    (B) A state agency's report of payroll information must include any payments of regular salary, twice monthly salary, overtime pay, longevity, benefit replacement pay, lump sum payment of unused vacation and sick leave, emoluments and special pays such as bilingual or fire brigade pay. A report is complete only if:

      (i) it encompasses all the pay periods that end in the month covered by the report; and

      (ii) the comptroller receives it by the deadline.

    (C) Payroll information under this paragraph must be processed in the manner, frequency, and form required by the comptroller.

    (D) Reporting errors. If the comptroller detects an error in a state agency's report of personnel or payroll information, then the comptroller shall provide a description of the error to the agency. The agency shall then correct the error according to the comptroller's requirements.

(n) Standard payroll calculation.

  (1) Exemption. This subsection does not apply to an institution of higher education.

  (2) Required use of USPS.

    (A) Except as provided in subparagraph (B) of this paragraph, a state agency must use USPS to:

      (i) calculate and otherwise generate the agency's payments of compensation to its state employees; and

      (ii) maintain the agency's personnel and payroll information.

    (B) A state agency is not subject to subparagraph (A) of this paragraph if the comptroller has allowed the agency to report to SPRS or to use the payroll and personnel components of CAPPS. If a state agency is allowed to report to SPRS or to use CAPPS, it must conform to the payroll calculation defined in USPS.

(o) Deceased state employees.

  (1) Required payees. A state agency must pay the compensation earned by a deceased state employee to the employee's estate unless Probate Code, §160, or another law authorizes or requires a different payment method.

  (2) Additional mail codes. When a state agency pays the estate of a deceased state employee, the agency must establish an additional mail code under the payee identification number of the employee.

(p) Overtime payments.

  (1) Generally. A state employee covered by the overtime provisions of the FLSA must be credited or paid for overtime hours worked according to the GAA, the FLSA, and the regulations adopted by the United States Department of Labor under the FLSA. Those regulations and the FLSA prevail over the GAA to the extent of conflict, if any.

  (2) Method for making overtime payments. A state agency may pay overtime on any payroll document submitted to the comptroller, including a supplemental payroll document.

(q) Payments of compensation for working partial months.

  (1) State employees paid once each month.

    (A) This paragraph applies only to a state employee who is paid once each month.

    (B) A state agency must calculate the amount of compensation a state employee is entitled to receive for working less than a full month by:

      (i) calculating the employee's hourly rate of pay according to the comptroller's requirements; and

      (ii) multiplying the employee's hourly rate of pay by the number of hours worked to determine the correct amount of compensation.

    (C) Subparagraph (B) of this paragraph also applies to the compensation paid to a state employee who is on leave without pay for less than an entire calendar month.

  (2) State employees paid twice each month.

    (A) This paragraph applies only to a state employee who is paid twice each month.

    (B) This subparagraph applies to a state employee who does not work all the available hours in the first half of a month but works all the available hours in the second half of the month.

      (i) The total compensation that must be paid to a state employee for an entire month is equal to the product of:

        (I) the hours worked in the month by the employee; and

        (II) the employee's hourly rate for the month calculated according to the comptroller's requirements.

      (ii) The amount of compensation that must be paid to a state employee for services provided during the first half of a month is equal to the product of:

        (I) the hours worked in that half of the month by the employee; and

        (II) the employee's hourly rate for the month calculated according to the comptroller's requirements.

      (iii) The amount of compensation that must be paid to a state employee for services provided during the second half of a month equals the difference between:

        (I) the total compensation that must be paid to the employee for the entire month as determined under clause (i) of this subparagraph; and

        (II) the compensation that must be paid to the employee for services provided during the first half of the month as determined under clause (ii) of this subparagraph.

    (C) This subparagraph applies to a state employee who works all the available hours in the first half of a month but does not work all the available hours in the second half of that month.

      (i) The total compensation that must be paid to a state employee for an entire month is equal to the product of:

        (I) the hours worked in the month by the employee; and

        (II) the employee's hourly rate for the month calculated according to the comptroller's requirements.

      (ii) The amount of compensation that must be paid to a state employee for services provided during the first half of a month equals 50% of the employee's compensation for the month.

      (iii) The amount of compensation that must be paid to a state employee for services provided during the second half of a month equals the difference between:

        (I) the total compensation that must be paid to the employee for the entire month as determined under clause (i) of this subparagraph; and

        (II) the compensation that must be paid to the employee for services provided during the first half of the month as determined under clause (ii) of this subparagraph.

(r) Payroll deductions.

  (1) Special definitions. The following words and terms, when used in this subsection, shall have the following meanings unless the context clearly indicates otherwise.

    (A) Certified state employee organization--A state employee organization that the comptroller has certified according to §5.46 of this title (relating to Deductions for Paying Membership Fees to Employee Organizations).

    (B) State agency--

      (i) a board, commission, department, office, or other agency that is in the executive branch of state government and that was created by the constitution or a statute of the state, including an institution of higher education as defined by Education Code, §61.003;

      (ii) the legislature or a legislative agency; or

      (iii) the supreme court, the court of criminal appeals, a court of appeals, the State Bar of Texas, or another state judicial agency.

  (2) Statutory limitation. Government Code, §659.002, prohibits a state agency from making a deduction from the compensation paid to an employee whose compensation is paid in full or in part from state funds unless the deduction is authorized by law.

  (3) List of authorized deductions. The deductions authorized by law are:

    (A) court-ordered deductions under Bankruptcy Code, Chapter 13;

    (B) deductions required by levies imposed by the Internal Revenue Service;

    (C) deductions required by payroll deduction agreements between the Internal Revenue Service and state employees if the agreements are legally binding on employing state agencies;

    (D) federal income tax withholding;

    (E) deductions required by the Federal Insurance Contributions Act, which includes social security and Medicare withholding;

    (F) income tax deductions required by states other than Texas or by local governments outside Texas in which state employees live and work;

    (G) contributions to the Employees Retirement System of Texas, the Teacher Retirement System of Texas, the optional retirement program, the Judicial Retirement System of Texas Plan One, or the Judicial Retirement System of Texas Plan Two;

    (H) fees charged to state employees by their employing state agencies for complying with court-ordered child support deductions from the employees' compensation;

    (I) court-ordered child support deductions;

    (J) extra federal income tax withholding;

    (K) deferrals to and repayments of loans from the qualified deferred compensation plan;

    (L) deductions required by a valid assignment, transfer, or pledge of compensation as security for an indebtedness under Education Code, §51.934;

    (M) health benefits plan deductions, cafeteria plan deductions, and other deductions authorized by Insurance Code, Chapter 1551, Texas Employees Group Insurance Benefits Act;

    (N) health benefits plan deductions, cafeteria plan deductions, and other deductions authorized by Insurance Code, Chapter 1551, Texas State College and University Employees Uniform Insurance Benefits Act;

    (O) deductions for goods and services provided to employees by the institutional division of the Department of Criminal Justice;

    (P) deductions for services provided to state employees of agencies as authorized in statute or the GAA;

    (Q) deferrals to the deferred compensation plans governed by Internal Revenue Code of 1986, §457;

    (R) contributions by employees of the Texas Higher Education Coordinating Board, the Texas Education Agency, the Department of Assistive and Rehabilitative Services, the Department of State Health Services, the Texas Juvenile Justice Department, and the governing boards of state-supported institutions of higher education to any investment authorized under Internal Revenue Code of 1986, §403(b);

    (S) deductions to pay membership fees to certified state employee organizations;

    (T) service purchase installment deductions for contributing members of the Employees Retirement System of Texas, the Judicial Retirement System of Texas Plan I, or the Judicial Retirement System of Texas Plan II;

    (U) deductions from the compensation paid to certain faculty members who take English proficiency courses under Education Code, §51.917;

    (V) deductions for contributions to eligible charitable organizations;

    (W) deductions for payments to credit unions;

    (X) deductions required by federal law for the repayment of guaranteed student loans;

    (Y) deductions for savings bond purchases;

    (Z) deductions for supplemental optional benefit programs approved by the Employees Retirement System of Texas under Government Code, §659.102;

    (AA) deductions to make payments under a prepaid tuition contract; and

    (BB) deductions for contributions to a qualified football coaches plan.

(s) Garnishments.

  (1) Delivery of garnishment notices. A notice to garnish the compensation of a state employee must be delivered directly to the employing state agency.

  (2) Garnishment notices for terminated employees. If a state agency receives a garnishment notice for a person no longer employed by the agency, then the agency must:

    (A) return the notice to the entity that issued the notice;

    (B) inform the entity that the person is no longer employed; and

    (C) identify to the entity the retirement system that the entity should contact to seek information about the person's retirement contribution balance.

  (3) Compliance with garnishment notices. Upon receipt of a valid garnishment notice, the receiving state agency must:

    (A) inform the affected state employee about the notice and the procedures the agency will follow to comply with the notice;

    (B) establish a mail code on the comptroller's Texas payee information system for the recipient of the garnishment proceeds unless a payee number has already been designated for all state agencies to use; and

    (C) show the garnishment as a miscellaneous deduction on the affected state employee's payroll record.

  (4) Effective date of garnishment notices. A garnishment notice takes effect with the first payroll document submitted to the comptroller after the notice is received. Therefore, if a state agency receives a garnishment notice after the agency has submitted a payroll document to the comptroller, the notice does not apply to that document.

(t) Refunds of deductions. A state agency may refund amounts previously deducted in error only by using credit amounts in the appropriate deduction column on a payroll document.


Source Note: The provisions of this §5.41 adopted to be effective November 19, 1996, 21 TexReg 10988; amended to be effective March 11, 2013, 38 TexReg 1694

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