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SUBMITTED TO: SUBMITTED BY:
Mr.MOHAMMAND AQIB AHSAN POOJA SHARMA
OFFICER-HR MASTERS IN HUMAN RESOUCE
THOMSON PRESS ( I ) LTD. INSTITUTE OF MARKETING
OKHLA AND MANAGEMENT
TABLE OF CONTENTS
S.NO. DESCRIPTION PAGE
NO
.
1. ACKNOWLEDGEMENT
2. BRIEF SUMMARY OF THOMSON PRESS
3. UNITS IN THOMSON PRESS
4. OBJECTIVES & METHODOLGY
5. FINDING
6. HR INVENTORY SYSTEM
7. BENEFITS OF THE STUDY
8. GRAPHS
9. BIBLIOGRAPHY
ACKNOWLEDGEMENT
At the very outset I would to thank Mr. Md. Aqib Ahsan, the HR- Officer
for giving me an opportunity to work under his valued guidance in
Human Resources Department at Thomson Press. I am indebted to him
for the keen interest he showed in my project and helping me out
whenever I faced some difficulty.
I am also grateful to Mr. S.S. Saini, Head of Okhla unit Thomson Press
and Mr. Kapil Raina, Head of the Sales Department Okhla Unit for
allowing me to undergo training for 8 weeks in your prestigious
company.
Last but not the least I am greatly indebted by the support extended to me
by Mr. Sunil Kumar and Mr. Ashish Kumar Bera, without there valuable
help it would have been impossible for me to complete this project. Their
selfless contribution and suggestions are deeply appreciated by me.
I would like to thank my placement coordinator Mr. Monisha Verma to
be grateful towards me.
Date: (POOJA SHARMA)
RESEARCH METHODOLOGY
Exploratory Research
Exploratory research is often conducted because a problem has not been
clearly defined as yet, or its real scope is as yet unclear. It allows the
researcher to familiarize him/herself with the problem or concept to be
studied, and perhaps generate hypotheses (definition of hypothesis) to be
tested. It is the initial research, before more conclusive research
(definition of conclusive research) is undertaken. Exploratory research
helps determine the best research design, data collection method and
selection of subjects, and sometimes it even concludes that the problem
does not exist!
Another common reason for conducting exploratory research is to test
concepts before they are put in the marketplace, always a very costly
endeavour. In concept testing, consumers are provided either with a
written concept or a prototype for a new, revised or repositioned product,
service or strategy.
The results of exploratory research are not usually useful for decision-
making by themselves, but they can provide significant insight into a
given situation. Although the results of qualitative research can give
some indication as to the "why", "how" and "when" something occurs, it
cannot tell us "how often" or "how many". In other words, the results can
neither be generalized; they are not representative of the whole
population being studied.
SECONDARY DATA COLLECTION
Secondary data are data that were collected by the persons or agencies for
purposes other than solving the problem at hand. They are one of the
cheapest and easiest mean of access to information. Hence, the first thing
a researcher should do is search for secondary data available on the topic.
The amount of secondary data available is overwhelming, and
researchers have to locate and utilize the data that are relevant to their
research. Almost all the information systems initially are based on
routinely collected internal data, and expand through the inclusion of data
from published and standardized sources.
A company’s internal records, accounting and control systems
provide the most basic data on resulting outcomes. The principal virtues
of these data are ready availability, reasonable accessibility on a
continuing basis, and relevance to the organization’s situation.
USES OF SECONDARY DATA
Secondary data can be used in many ways:
1. Secondary data may actually provide enough information to
resolve the problem being investigated.
2. Secondary data can be a valuable source of new ideas that can be
explored later through primary research.
3. Secondary data is of use in the collection of primary data.
Examining the methodology and techniques employed by other
investigators may be useful in planning the present one. It may also
suggest better methods.
BENEFITS OF SECONDARY DATA
The most significant benefits secondary data offer are savings in cost and
time. Secondary data research involves just spending a few days in the
library extracting the data and reporting them. This should involve very
little time, efforts and money.
ABOUT THE COMPANY
Thomson Press - An Overview
Thomson Press (India) limited an ISO 9002 company was registered in
1964 with equity participation of the Thomson Group of Canada. It
commenced its commercial operations in 1967. Dr. Zakir Husain
inaugurated the parent plant located at Faridabad in 1967.
Thomson Press (India) limited is one of the largest commercial printing
houses in India. Ever since establishment, Thomson press has worked to
exemplary high standard of printing technology with the use of latest
state-of-the-art technology and an excellent pool of talent, trained and
highly skilled work force lead by dynamic managers and management
staff.. Thomson Press management has hereafter kept pace with latest and
sophisticated printing technology being used by the development
countries like Japan, UK, France, Canada and Italy etc. by close global
liaison with other printing companies and equipment manufacturers on a
regular basis. The company has a strong commitment to Human
Resource Development and employs substantial expertise in its Graduate
Engineer Trainee, Trade Trainee and Diploma Engineer Trainee
Schemes.
Thomson Press undertakes total execution of any printing job that
involves Pre Press processing, Color and Digital Electronic Imaging,
Printing on Sheetfed or Wed fed multicolored printing machines.
Besides, all types of fabrication and finishing operations are also carried
out in a totally integrated manner.
The company is on contract for printing and supplying magazine like
India today, Business Today, Computers Today, Reader’s Digest, First
City, Down To Earth, Travel Trends and many more periodicals which
included most of the domestic and international airline in flight
magazine. It also produces large number of Multicolored Posters,
Brochures, Leaflets, Folders, Danglers, Visual Aids, Press Campaigns,
Annual Reports, Company Reports, Company Manuals, Calendars,
Diaries, Bibles, and Bound Books. Apart from day to day activities,
Thomson Press is also engaged in Printing Cheques, Security Bonds,
Major Airline Tickets, Bus Tickets and Lottery Tickets.
The company has achieved national and international recognition for
delivery of high quality printed material by stringent measures of on-line
quality control, on purchasing, vendor and process controlled production
facilities with an eye for quality where the service is customer driven.
THOMSON PRESS PRINTING DIVISION
It was initially involved in
the distribution of
publications of a large
number of overseas
publishers, and printing of
children's books for export.
In 1974 the focus shifted to printing of the group's prestigious
publication India Today. As of date apart from a number of
prestigious magazines printed for various publishing houses, TP also
prints high quality commercial POS items and books for the
domestic and export markets.
Each of our five units has developed its own unique strengths and
areas of expertise, providing our customers with a strong support
structure across an extensive range of printing services.
Absolute commitment to quality, meticulous attention to detail and
unparalleled level of service have made TP a leading specialist in
Design, Prepress, Printing and distribution services. As a company
we are committed to employing dedicated staff, investing in the very
best technology available and maintaining a close involvement with
the industry.
Thomson Press Printing Division comprises of one Pre Press and two
Printing units in Delhi, one printing unit in Chennai and one printing
& Book Bindery unit in Delhi exclusively for exports.
TP has always been a frontrunner in introducing the latest printing
technology in India
1. High end drum and flatbed scanners.
2. Multicolour sheetfed and web printing machines.
3. Mechanized binderies.
4. Copy dot scanner.
5. CTP.
The product range covers virtually all-commercial print requirements
on paper and board, from bank instruments, to calendars, diaries,
books, corporate brochures, posters, folders, leaflets, and magazines.
This range of services and products covers designing, copy editing,
typesetting, high quality scanning and image manipulation, sheet fed
offset printing, heat set and coldest web offset printing, automated
binding, finishing, distribution and mailing services.
DIGITAL OPERATIONS AT THOMSON
PRESS
Digital Operations Department is equipped with the latest technology and
it basically deals with prepress operations viz. scanning, manipulations
and creations, page planning, colour corrections, digital proofing and
taking the output on the film.
The Digital Operations Department has two divisions one situated in
Okhla and the other is in Connaught Circus. The Connaught Circus
Office (K-13) deals with all the living media production viz. India today,
business today, computers today, teens today, India today plus, readers
digest, cosmopolitan and first city whereas in Okhla all commercials jobs
are taken up which includes Posters, Brochures, Press Campaigns,
Advertisement, Calendars, Books, Diaries, Leaflets, Annual Reports,
Bibles, Bound Books etc.
A total of 33 employees are working in supervisory cadre in digital
operation department i.e. 16 in Okhla and 17 in K-13 (including new
recruits). As the project deals with employees in Digital Operations
Department so a bit of information as to how the department works
would be useful in understanding things. (Refer figure 2)
Sales and marketing employees procure the job from the client and give it
to the customer support department. This department acts as a interface
between the client and the Digital Operations Department. As soon as job
is received, it is studied. If the material is a photograph or a transparency
then it is sent for scanning and after that directly to work station. It the
job is in electronic media like floppies etc. then it is directly sent to the
workstation. There are different workstations as Mac, Prism Ax, Blaze
98, Star PS and PC.
After the job has been finished, its output is taken either on iris or
directly on film. Since taking the output directly on film is costlier than
on iris, so iris output is preferred. When the client gives his consent that
the work is to his satisfaction, than its output is taken on the film and
after that output departments. (Layout, Plate Making, Fag Proofing) role
comes into play
COMPANY PROFILE
Thomson Press (India) Ltd., an ISO 9002 company was incorporated in
1967 with the technical & financial collaboration of Thomson
International Corporation of Canada. As on date, Living Media and the
Investment companies of the Promoter Group hold 85% of the Equity
Share Capital of Thomson Press (I) Ltd. With the balance 15% being
held by New York Life Insurance. The parent plant located at Faridabad
was inaugurated on 9th March 1967, which is now celebrated as
company’s annual day.
Thomson Press (I) Ltd. Is the largest commercial printer in South Asia.
Ever since its incorporation, Thomson Press has worked to exemplary
high standard of printing with use of latest state-of-the-art technology
supported by an excellent pool of talent, trained and highly skilled work
force headed by dynamic professional management staff. Thomson Press
management has kept pace with the latest and sophisticated printing
technology being used by developed countries like Japan, U.K., France,
Germany, U.S.A, etc with commitment to Human Resource
Development.
Thomson Press undertakes total execution of any printing job that
involves Pre Press, Color and Digital Electronic Imaging, Printing on
Sheet fed or Web fed multicolor-printing machines. Besides, all types of
fabrication and finishing operations are also carried out in an integrated
manner.
The company is commercial printer and supplier of magazines like India
Today, Business Today, Computers Today. Cosmopolitan, Reader’s
Digest, First City, Down to Earth and many more periodicals, which
includes in-flight magazines. It also produces large number of multicolor
Posters, Brochures, Leaflets, Folders, Danglers, Visual Aids, Press
Campaigns, Annual Reports , Company Manuals, Calendars, Diaries,
Bibles, Bound Books (Paper Back and library bound Deluxe Editions).
Apart from day to day activities, Thomson Press is also engaged in
printing Cheques, Security Bonds and Airline Tickets.
The company has achieved national and international recognition for
delivering printed material by stringent measures of online Quality
Control on purchasing, vendor evaluation and process controlled
production facilities with an eye for quality where the service is customer
driven.
ASSOCIATION OF THOMSON PRESS (I)
LIMITED WITH INDIA TODAY GROUP
The group comprises of companies viz.
COMPANY BUSINESS
World Media Ltd. Journalism
Living Media India
Ltd.
Publishing/Music/Website
Hosting/Online News
Paper
TV Today Network
Ltd.
Electronic Media
Integrated Database
India Ltd.
Publication of Industrial
& Commercial
Directories
Radio today
Broadcasting Ltd.
Broadcasting of FM
Radio
The group started with the incorporation of Thomson Press in 1967 with
the technical & financial collaboration of Thomson International
Corporation of Canada. The publishing business was started with the
brand name INDIA TODAY in 1975, a news magazine, which is
published weekly in English and four other regional languages. The
group diversified its publishing magazines on business, computers etc.
Living Media India Ltd. is one of the largest Magazine Publishing houses
in the country. Its products India Today, Business Today, Computers
Today, Cosmopolitan are the highest selling magazines in India.
The continued growth and expansion of the company’s publishing and
business i.e. detailed as under:
1. India Today : English 2. India Today : Hindi
3. India Today : Tamil 4. India Today : Malayalam
5. India Today : Telugu 6. India Today Plus
7. Computers Today 8. Business Today
9. Books Today 10. Cosmopolitan
11. India Today : International
Music Business:
Music Today: Audio Cassettes & Compact Discs
Electronic Media:
The Company started diversifying into the business of Electronic Media
in 1995. TV Today Network Ltd. Launched 24 Hours Hindi News
Current Affairs Channel viz. “Aaj Tak”. The channel went operational in
December 2000 & is highly popular news channel.
Organisation structure
EDP
IMPORT & CUSTOMS
FINANCE & ACCOUNTS
MATERIALS1-PURCHASE2- STORES
MANAGING DIRECTOR
EXECUTIVE DIRECTOR
ACCOUNT & FINANCE
DOMESTIC PRINITING
EXPORT PRINITNG
EXPORT TYPESETTING
INFORMATION SERVICES
TP - SCHOOL
BUSINESS DEVELOPMENT
TP LM ACCOUNTS & CIRCULATION
INTERNAL AUDIT
ACCOUNTS
TAXATION
COSTING
FARIDABAD UNIT
Thomson Press
Strategically located at 18/35 mile stone, Delhi-Mathura road, the parent
unit was inaugurated on 9th March 1967 by the then President of India,
Dr. Zakir Hussain.
The main job of a printing press is as its name suggests – “to press the
inked form and the paper together”.
Presses perform many actions. They move the paper through the whole
printing process, print on one or both sides in one or more colours, cut
and fold the papers and perform binding operations. The function can be
divided into three main processes viz.
1. Pre Press
2. Printing
3. Finishing operations
The printing unit is also the head office of Thomson Press India Limited,
which controls and regulates the functioning of all the other units of the
company. Thomson press recognizes quality as the prerequisite for
conducting business that is an inseparable element of all activities carried
out in the press.
This unit has earned the ISO 9002 certification in 1997.
Organization Structure
The work force of the Organization is broadly classified into: -
a. Managerial and Supervisory staff
b. Workmen including Administrative/Clerical staff.
The work force is divided into different cadres/department, so as to
ensure a smooth work flow and proper delegation of authority. The
people at different cadres/department have well defined roles and
freedom of action, which avoids overlapping of authority and ensures
unity of command.
Cadres and Grades
S. No. Designation Grades Cadre
1 General Manager A I
2 Chief / Senior Manager B II
3 Deputy Senior Manager C II(A)
4 Manager D III
5 Deputy Manager E III(A)
6 Assistant manager F IV
7 Sr. Foreman/ Sr. Officer G V
8 Foreman / officer H VI
9 Asst. Foreman/ Asst.
Officer
I VII
10 Senior Supervisor J VIII
11 Supervisor K IX
12 Asst. Supervisor L X
POLICIES AND PROCEDURES
The services of all the appointments can be transferred from one job to
another in the plant or from one branch to another anywhere in India.
JOINING FORMALITIES
On joining the person is required to undergo the following formalities
with the personnel department:
Medical examination
The joining report
Declaration form EPF, ESI, PF, Nomination and Benevolent fund.
A photocopy of all educational and experience certificates.
Photocopy of birth certificates
Relieving certificate from the previous employer
Two passport size photographs
Identity card cum attendance card will be issued and a token
number will be given
GENERAL RULES
WORKING HOURS:
The company runs round the clock in three shifts, the shift timings are as
under:
8:15 AM to 4:15 PM 1st Shift
4:15 PM to 12:15 AM 2nd Shift
12:15 AM to 8:15 AM 3rd Shift
ATTENDANCE:
All the employees are required to punch their attendance card in the
computerized clocks, installed at various locations within the factory, at
the time of entry and exit.
SECURITY:
To ensure security of company’s property, guards at the time of
entry and exit, carry out search test.
The employees cannot bring or take any material in the press
No visitor is allowed inside the factory premises without proper
authorization. As per the company’s policy, all the visitors should
enter the name, address, and time of entry and exit in the register
available with the security personnel at the gate
Gate pass will be issued to the official visitors along with visitor’s
identity card, which are to be returned at the time of leaving the
premises. Visitor’s are advised to display the visitor’s identity
card.
Your personal visitors are to be received at the reception only.
For going out for an official/ personal work during working hours
the employees from workers to junior management staff, have to
fill a prescribed form, duly approved from the departmental head
and managers have to make an entry in the register available with
manager security.
CORPORATE TRAINING SCHEMES:
Training scheme covers professionally qualified persons who are taken as
Management Trainees and Graduate Engineer Trainees undergo training
with the company in a phased manner as detailed below:
S.
No.
Category Qualifications Duration
of Training
Cadre/Designation
after completion
of training
1 Management Ph.D. / CA / One year V / Sr. Foreman
trainee ICWA /
MBA
2 Graduate
Engineer
Trainee/ Junior
Management
Trainee
BE / B Tech /
BE (Ptg.) /
MSW / M
Stat
One year
training &
one year of
probation
VI / Foreman
3 Supervisor
Trainee
Dip Engg.
(Mech) Elect.
/ Civil
Two year IX / Supervisor
4 Asst
Supervisor
Trainee
BA / B Com /
B Sc / Dip
Ptg. Above
60%
Two year X / Asst
Supervisor
Training to concerned employees will be given as the need is identified
based on:
Review of annual performance appraisal
Special requirements of HOD
By circulating available information related to various training
programmes received from training institutes etc.
Level Type of training Faculty
Manager Management
Development
IIM’S, MDI
Programs In-House
educational seminars
Junior management Management
Development
Programs Specialized
Training in-house
technical discussions
External
Workmen On the job training (at
least two in a month)
Specialized Training
regular technical class-
room
External / Internal
All identified training needs are examined as per organizational
requirements and a training calendar is finally approved and
documented
Employee wise training records are maintained
Training programmes are evaluated through feedback
Induction
Every new employee is given an intensive induction training, which
ranges from 15 days to a month depending on the position and the
requirements. This is designed in manner to put the new employee at ease
in the company and make him / her know of who is who and what is what
in the company.
PERFORMANCE APPRAISAL SYSTEM
TYPES OF APPRAISAL TIME OF APPRAISAL
Executive Appraisal April and October
Trainee Appraisal Quarterly
Work Man / Staff Appraisal January and July
BENEFITS AND FACILITIES LEAVE
LEAVE
Leave is categorized as under
PL/EL = Privileged Leave/Earned Leave
CL = Casual Leave
SL = Sick Leave
However, there is yet another kind of leave, i.e. leave without pay
(WP) which is an authorized leave with loss of pay.
Every employee has to fill the prescribed leave from before
proceeding on leave.
Weekly off and holidays whether occurring during or at the end of
the leave period shall not be counted as leave in case of leave.
In a year the employee shall be entitled to the following type of
leave:
S.N
O.
CATEGORY
PRIVILEG
E
SICK CASUAL
*E *A E A E A
1 Asst Supervisor –
GM
28 240 7 180 - -
2 Administrative staff 21 75 7 - 7 -
3 Workers 14 75 7 - 7 -
An Employee becomes entitled to a leave after completing 40 days
of working.
In addition to these 11 days, National / Festival Holidays are
provided to the employees.
Maternity Leave: As per the Maternity benefit Act
ASSOCIATES OF THOMSON PRESS
THE CUSTOMER BASE
Thomson has over the years acquired association with large number of
customers in India and overseas. We are servicing our overseas
customers’ needs for Printing and Electronic Publishing including
Scientific publication, which is it’s core strength. Living Media has its
own publications like India Today, Business Today, Computers Today,
Teens Today, Cosmopolitan printed at Thomson Press, which are leaders
in the country in their respective areas.
Following is a glimpse of our associates, definitely not at all exhaustive
list:
COMPANY’S CUSTOMERS INCLUDE:
INDIA WORLD WIDE
Adidas Addison Wesley
Bates Clarion Al Nisr Publications
ITC Book Builders, Hong Kong
LG Cambridge University Press, U.K
Becton & Dickinson Dorling Kindersley, U.K
Lintas Elsevier Group, U.K.
LIC of India Gordon & Breach, Singapore
Nestle Gulf News, Dubai
Maruti Suzuki Harcourt Brace Publishers
Samsung Inner Traditions, U.S.A
Otto Burlington International Publisher & Distributors
Rediffusion John Wiley
Mercedes Benz McGraw- Hill
Mudra Mission India, U.S.A
R K Swamy Octopus Group
Osho Commune Osho International (World wide)
Sahara Airlines Oxford University Press
State Bank of India Promotional Reprint Company, U.K
UCO Bank Reed Customer Books, U.K
Panjab & Sind Bank Springer Verlag, Germany
Modi Care Studio Editions, U.K
Escorts UN’s International Children’s Education
Times of India Fund – UNICEF
OTHER PLAYERS IN THE FIELD
Main competitors of Thomson Press are:
NORTH
Ajanta offset, Mehta offset, Dhriti Printer, Newtech, IPP (Delhi)
EAST
Art Printing, Naba Mudran, NK Grossain, LC Roy and Anderson
Printing (Kolkatta)
WEST
Tata Press, Comvay, Vakil, Repro(Mumbai)
SOUTH
Mytech, Prasad, Pragati Printers (Hyderabad), Coronation.
For Pre-press (Repro) business our competitors are:
NORTH
Ajanta Offset, IPP (Delhi)
EAST
Antartica and Repro Scan (Kolkatta)
WEST
Com Art, Jessra, Unique (Mumbai)
SOUTH
Mytech and Print system (Banglore).
Services at Thomson press
Undoubtedly Thomson Press is a leader in handling large volume
multi colour work.
The product range covers virtually all-commercial print requirements on paper
and board, from bank instruments, to calendars, diaries, books, corporate
brochures, posters, folders, leaflets, and magazines.
This range of services and products covers designing, editing,
typesetting, high quality scanning and image manipulation, sheet fed
offset printing, heatset and coldset web offset printing, automated
binding, finishing, distribution and mailing services.
TP provides a complete service for mailing and fulfillment, managing
every aspect of the delivery service as required by our customers. A
number of options are available from complex multiple personalised
inserts to the largest campaign and launch mailings.
We aim to offer the most comprehensive print management service
available. And that doesn't just mean we'll take the best possible care
of you.
For us, building close working relationships with customers goes
much further. Whatever the project, listening to our customers'
requirements and coming up with bright ideas and practical
suggestions to achieve a better result more cost-effectively is all part
of the service we provide.
QUALITY ASSURANCE
Quality Policy
QUALITY POLICY OF THOMSON PRESS, FARIDABAD
We hereby pledge to achieve complete customer satisfaction through
excellence in quality. We wish to achieve this by :
Motivating workforce committed to continuous
improvement in working methods.
Working as a well-knit team to ensure that quality
objectives are met.
Committing vendors to continuously work on
improvement in quality standards.
ROLE OF QUALITY ASSURANCE IN THOMSON
PRESS, FARIDABAD
Defect Prevention
By Setting Standard:
Standard has been set as per the ISO 9002 international
Quality System and has been certified from BSI India Pvt. Ltd.
The standard is being revised from time to time whenever
there is some improvement or modification in the system.
Ensuring adherence of the Standard:
Periodical audit of the system standard is being conducted to
check the compliance of the standard.
Corrective and Preventive Action:
Every customer complaint is being thoroughly investigated by
QA for its origin and reason. Necessary corrective &
preventive action is being taken in consultation with the
concerned departments.
Defect Detection
By gathering data constantly on occurrence of defect:
Every job undergoes thorough inspection by QA before
dispatch as per the inspection plan & defect checklist.
By sending information about defects to relevant
departments:
Daily, Weekly & Monthly reports are being sent to the
relevant departments and the same are being reviewed
periodically with the concerned departments.
UNITS - THOMSON PRESS
Export Division (Phototypesetting), NEPZ, Noida (U.P.)
This unit commenced its commercial production in the field of
phototypesetting, with the objective of availing opportunities offered by
the international market.
The clientele includes some of the leading publishers of USA and
Europe. The electronic typesetting division has developed its resources
around customer friendly contemporary technology to offer the services
for complex scientific publishing projects.
The in-house software development team develops conversion tools. Its
copyediting resources are strategically located in Noida, New Delhi and
Madras. The Chief Scientific Editor directs the team activities from
Noida.
C-35,Noida
A 100% export oriented unit, where the output quality matches the
international standards, utilizing imported raw material, leading to
production, printing and binding of high quality hard case and paperback
books.
This unit produces two million each hard case and paperback books per
year. The prepress resources included camera, layout and plate making.
Noida Security Printers, Noida
This unit of Thomson Press is responsible for printing of lottery and
travel tickets. All the functions are decentralized, viz. Decentralized
purchasing, independent accounts, set-up and a proper back up with
debtor’s reports & Age analysis.
Okhla, Repro House
This unit comprises of two separate departments namely, Repro and
Sales house consist of Customer Support, Digital Operations, Layout,
Plate Making, Fag Proofing and Manual Planning Departments.
Repro undertakes all the preprocess activities including digital
operations. State of the art technology is employed to produce the best
possible quality with the expertise of specially trained manpower. A team
of dedicated specialists further enhances the capabilities &
competitiveness.
Inventory Management
In today's environment, capital for inventory can be hard to access and
expensive when available. In addition, inventories are expensive to
carry. Capital costs (cost to finance), service costs (insurance,
inventory control and taxes), storage costs (warehouse rent,
equipment, utilities and handling) and inventory costs (obsolescence,
damage, shrinkage and excess) all contribute to inventory carrying
costs of 2% of the value of the inventory, per month. These hidden
costs can average 25% of the value of inventory, or 1% to 3% of
revenue each year.
Source: REM Associates
Inventory is a poor investment alternative for cash, but imperative to
achieve required service levels. Maintaining the appropriate levels and
types of inventory is essential to providing quality, timely service and
products to your customers. Preventing stock-outs without
overstocking products requires a disciplined process and information
system that can dynamically manage this balance. If your organization
does not compute the true cost of inventory, your assets could be
underutilized and costing you money.
Two of the keys to optimizing inventories are to improve reliability
and reduce variability in the supply chain to meet your customer's
demand while being cost effective. Our professionals can provide the
knowledge and technology to assist your organization in better
managing your inventory investment, so you can have the right
inventory in the right place without over committing resources.
Anixter helps you to achieve a balance of minimized inventory
carrying costs in order to meet required service levels.
Inventory Management Benefits
Reduce capital investment and carrying cost of inventory
Postpone ownership
Minimize risk of excess, obsolescence and duplicate inventories
Reduce the cost of maintaining inventories by paying only for
the material you use, as you use it
Reduce the total cost of ownership
Minimize the number of purchase orders, returns, stock-outs and
time needed to the "invoice matching process"
Eliminate traveling to distributor's will-call counters to pick up
small orders, resulting in lost labor time
Services
Consigned inventory programs
Guaranteed inventory availability programs
Visual replenishment programs
Just-in-time delivery and replenishment programs
Inventory buy-back programs
Vendor Managed Inventory Program (VMI)-Anixter and third-
party manufacturers
Web-based, real-time inventory visibility
Inventory Management deserves separate mention beyond other
phases of accounting due to its importance to operations.
With Inventory, you have two conflicting goals: minimize the amount
of money tied up in product and never be out of product when you
receive an order. You need to know exactly what you have, where it is,
what you're likely to need to fill orders, where you get it, how long it
takes to get it, current costs and pricing, how many turns you get out
of which items, how much it's all really worth and how much you can
tell the IRS it's all worth.
Information systems, properly applied, can be a big help in handling
all these factors and making your inventory a lot more profitable by
optimizing your use of the inventory itself. Tight control of inventory
reduces the amount of idle money tied up in slow moving or obsolete
product, and maximizes investment in items that pay a good return. It
also can greatly reduce "shrinkage".
Various Definitions of inventory
“The process of ensuring the availability of products through
inventory administration.”
“Systems and processes that identify inventory
requirements, set targets, provide replenishment techniques
and report actual and projected inventory status”.
“Handles all functions related to the tracking and
management of material. This would include the monitoring
of material moved into and out of stockroom locations and
the reconciling of the inventory balances. Also may include
ABC analysis, lot tracking, cycle counting support etc.”
‘The development and maintenance of adequate assortments
of products to meet customers' needs”
“Management of the inventories, with the primary objective
of determining:
A subset of Configuration Management that focuses on the
management (control and financial accounting) of the most
expensive or attractive CIs in the IT infrastructure. See also
Asset Management, Configuration Management.”
“The process of ensuring the availability of products through
inventory administration activities such as planning, stock
positioning, and monitoring the age of the product. The goal
is to ensure product availability.”
“Activities involved in maintaining the appropriate level of
stock in a warehouse.”
BENEFITS OF HR INVENTORY
LEAVE POLICIES
The State Auditor is responsible for providing uniform interpretation
of certain leave provisions, and for reporting any exceptions made by
individual agencies to the Governor and the Legislature. However,
the Attorney General has ruled that the interpretations of the State
Auditor are advisory only.
Leave Records
For each employee, each state agency is required to keep a record, in
addition to an official personnel file, of time and attendance; vacation
and sick leave accrual; absences; and the reasons for absences,
whether from sickness, vacation, other paid leave, or leave without
pay.
Paid Leave Bank For Institutions Of Higher Education
The governing board of a university system may adopt a
comprehensive leave policy that applies to employees working in a
hospital or clinic of a medical and dental unit of the university
system. This policy may combine vacation, sick, and holiday leave
into a paid leave system that does not distinguish or separate the
types of leave to be awarded and may award leave in an amount
determined by the governing board to be appropriate and cost-
effective. This leave policy must include provisions for:
1. Payment for accrued leave to:
A. The estates or heirs of deceased employees
B. Employees separating from the employing entity
C. Contributing members of state retirement systems who
retire
2. Awards of accrued leave to employees separating from the
employing entity who are to be employed by other state
agencies or institutions of higher education.
On or after September 15, 2005, the governing board of an institution
of higher education may adopt a leave policy as provided above for
employees of the institution.
Leave and 662 - Holidays and Recognition Days and Months of the
Texas Government Code, do not apply to employees covered by a
paid leave bank policy adopted by an institution of higher education.
Annual Leave
Employees of the State are entitled to a paid vacation as determined
by length of service. Exceptions include faculty members who have
appointments of less than 12 months at institutions of higher
education and instructional employees who hold contracts for periods
of less than 12 months at the Texas School for the Blind and Visually
Impaired and the Texas School for the Deaf. Employees of junior
colleges are not considered state employees. Employees paid on an
hourly or daily basis are entitled to a vacation with full pay accrued
at the same rate as employees paid on a monthly basis. Part-time
employees are also eligible for paid vacation, but they accrue
vacation leave on a proportionate basis, and their maximum
carryover is proportionate as well. For example, half-time employees
may earn, and may carry over, vacation leave at one-half the rate
authorized for full-time employees. When an employee's status
changes from part-time to full-time status in the middle of the month,
the employee would accrue annual leave at the applicable rate on the
first calendar day of the following month. The amount of annual time
accrued is based upon the employee's employment status on the first
day of the month (i.e., part-time, full-time). Because the employee's
status is part-time on the first day of the month, the annual leave time
accrued for the month would be accrued on a proportional basis.
In computing vacation leave time taken, time that an employee is
excused from work because of holidays is not charged against
vacation time.
In 1983, the Attorney General concluded that, for purposes of leave
accrual, the definition of state "employee" includes any appointed
officer who normally works 900 hours or more per year. The effect
of this opinion is that certain appointed officers are allowed to accrue
vacation and sick leave under the same rules and conditions as other
state employees. For further information see the definitions of state
employees in Texas Government Code Section 661.001.
The following table provides the vacation leave accrual rates and
maximum allowable carryover (from one fiscal year to the next) for
full-time employees. All hours in excess of the maximum allowable
carryover left at the end of a fiscal year shall be credited to the
employee's sick leave balance as of the first day of the next fiscal
year.
An employee must complete the required years of employment to be
entitled to receive the higher rate of vacation leave accrual (for
example, the employee must complete 15 years of employment to
accrue 12 hours vacation leave per month). The length of
employment is calculated from the employee's anniversary date.
Credit for the higher rate of accrual, as shown in the table, will be
given on the first calendar day of the month if the anniversary date
falls on the first calendar day of the month. Otherwise, the increase
in vacation accrual will occur on the first calendar day of the
following month.
Credit for one month's vacation leave accrual is given for each month
or fraction of a month of state employment and is posted on the first
day of employment and on the first day of each succeeding month
thereafter. Vacation entitlement accrues from the first day of
employment, and is terminated on the last day of duty. If the
employee is on any type of paid leave which extends into a
subsequent month, any vacation leave accrual for the month of paid
leave will not be posted until the date of his or her return to duty.
Specifically, an employee who is on leave the first day of the month
must return to duty before being eligible to use leave accrued for that
month. If an employee goes on paid leave following his or her last
day of duty and does not return to duty, then subsequently separates
from state employment, the employee is not entitled to leave accruals
while on such paid leave for any calendar month(s) following the
month in which the last day of duty occurs. State employees who are
employed by multiple agencies and who work more than 40 hours
per week may not accrue vacation leave at a rate that would exceed
that for a full-time, 40 hour per week employee.
Schedule of Vacation Leave Accruals for Full-Time Employees
Length of State Service
Hours
Accrued
Per Month
Days
Accrued
Per Year
Allowable
Carry-
Over
(Hours)
Less than 2 years 7 10.5 168
At least 2 but less than 5
years
8 12 232
At least 5 but less than
10 years
9 13.5 256
At least 10 but less than
15 years
10 15 280
At least 15 but less than
20 years
12 18 328
At least 20 but less than
25 years
14 21 376
At least 25 but less than
30 years
16 24 424
At least 30 but less than
35 years
18 27 472
At least 35 years or more 20 30 520
Vacation with pay may not be taken until the employee has been
continuously employed with a state agency for six months. An
employee who resigns, is dismissed, or otherwise separates from
state employment during that six-month period is not deemed to have
had continuous employment for at least six months. Additionally,
continuous employment means that no leave without pay (that is, for
a full calendar month that does not count as state service credit) has
been taken. The six-month eligibility requirement means that once an
employee has completed six months or more of continuous state
employment and then leaves state employment, that person is eligible
to take vacation leave as it is earned upon reemployment, or be paid
for it on termination following such reemployment. An employee
who separates from one state agency will not be paid for his or her
unused vacation time if he or she is reemployed by another state
agency that grants vacation time within 30 days of leaving his or her
previous job.
An employee who resigns, is dismissed, or otherwise separates from
state employment is entitled to be paid for accrued and unused
vacation time, as long as the employee has had continuous
employment for at least six months and provided that the employee
has not been reemployed by another state agency within 30 days of
such separation. Institutions of higher education are allowed to
immediately pay for accrued vacation leave upon separation without
having to wait 30 days after separation. Separation from state
employment includes, but is not limited to, a state employee leaving
one state agency to begin working at another state agency, provided
at least one workday occurs between the employee's separation from
the first state agency and the employee's first day at work at the
second state agency. The Payment Entitlements Upon Separation
From State Employment table on page provides a description of
various payment entitlements upon separation from state
employment. An employee terminating state employment may, with
the agreement of the employing agency, be allowed to remain on the
payroll after the last day worked to use vacation leave in lieu of
being paid in a lump sum. Such an employee will not accrue any
additional vacation leave while remaining on the payroll to use such
vacation leave.
Lump-sum payments for accrued but unused vacation time are
computed as though the employee actually worked that time for the
agency. A state employee who, on the date of separation is normally
scheduled to work at least 40 hours a week, will have eight hours
added to his or her accrued vacation time for each state or national
holiday that falls within the period after the date of separation and
the last date of the period in which the employee could have used the
time had the employee remained on the payroll. State employees who
are normally scheduled to work less than 40 hours a week on the date
of separation are also entitled to have hours added to vacation time
hours for national and state holidays using the same calculation.
However, their additional hours are to be proportionate to the number
of normally scheduled work hours. Employees moving to a position
in a state agency that does not accrue vacation time are not entitled to
add vacation time for holidays that fall within an employee's accrued
vacation time period.
According to Texas Government Code Section 661.063(b)
employees compensated for unused vacation time in one lump-sum
payment are not entitled to receive longevity and/or hazardous duty
pay for the period equal to the amount of accrued vacation time.
However, an employee who is permitted to remain on the agency
payroll while exhausting accrued vacation time will continue to
receive all compensation and benefits that the employee was
receiving on the last day of duty including paid holidays, longevity,
and/or hazardous duty pay while remaining on the payroll. The State
Auditor's Office has further clarified that an employee allowed to
remain on an agency's payroll is entitled to continue to receive all
compensation and benefits that the employee was receiving on the
employee's last day of duty. However, as an exception, the employee
may not use sick leave, or accrue sick or vacation time, while
exhausting annual leave.
Employees transferring from one state agency to another will have
their accrued but unused vacation leave balance transferred as long
as the employment is not interrupted by a separation. If an individual
is separated from state employment and is reemployed within 30
calendar days by a state agency to a position that accrues vacation
time, the individual's previously accrued but unused vacation leave
will be restored.
The State Auditor is directed to provide a uniform interpretation of
the subchapters of the Texas Government Code relating to vacation
leave, sick leave, and miscellaneous leave provisions and "shall
report to the governor and the legislature any state agency or
institution of higher education that practices exceptions to those
laws." An Attorney General Opinion held this provision to mean:
…the State Auditor may provide a uniform
interpretation of the provisions on
employee vacations and leaves, but such
interpretation would be advisory in nature
only and not a final determination, because
the Legislature has specifically delegated to
the Attorney General the responsibility of
interpreting legislative intent as it relates to
the General Appropriations Bill.
Sick Leave
State employees are, without deduction in salary, entitled to sick
leave subject to the following:
An employee will begin earning entitlement to paid sick leave on
the first day of employment.
Credit for one month's accrual will be given and posted for each
month or each fraction of a month to that employee's leave
record on the first day of employment and the first day of each
succeeding month of employment thereafter.
An employee who is on leave the first day of the month may not
use the sick leave that the employee accrues for that month
until after a return to duty.
The employee will accrue sick leave at the rate of eight hours per
month or fraction of a month for a full-time employee and will
accumulate it with any unused sick leave. Part-time employees
will accrue sick leave on a proportional basis.
Sick leave with pay may be taken when an employee is
prevented from performing duties because of sickness, injury,
or pregnancy and confinement. Sick leave may also be taken if
an employee needs to care for a member of his or her
immediate family who is actually ill. Texas Government Code
§ 661.202(d) defines "immediate family" as those individuals
related by kinship, adoption, or marriage who live in the same
household; foster children certified by the Texas Department
of Protective and Regulatory Services who reside in the same
household as the employee; and minor children of the
employee regardless of whether the children live in the same
household.
Sick leave may be taken to care for members of an employee's
family who do not reside in the same household only if the
time taken is necessary to provide care to a spouse, child, or
parent of the employee who needs such care as a direct result
of a documented medical condition. This provision for taking
sick leave does not extend to an employee's parent-in-law if
they do not live in the same household, as per a leave
interpretation by the State Auditor's Office.
An employee who will be absent from work due to an illness
must notify his or her supervisor as soon as possible.
To be eligible for accumulated sick leave with pay for a
continuous period of more than three working days, an
employee must send the administrative head of his or her
agency a doctor's certification, or an acceptable written
statement of facts, showing the nature of the illness. If an
illness results in the absence of three working days or less, the
administrative head has the discretion to require
documentation of the illness.
When an employee returns to work after taking sick leave, he or
she is required to complete a sick leave application which is
submitted to the appropriate approving authority for
consideration.
If an employee is on vacation and would otherwise be entitled to
sick leave, then the fact that such sick leave is requested while
on vacation leave does not affect the employee's entitlement to
sick leave.
State employees who are employed by multiple agencies and
who work more than 40 hours per week may not accrue sick
leave at a rate that would exceed that for a full-time, 40 hour
per week employee.
State employees who are legal guardians by court appointment
may take sick leave to care for a child in accordance with the
leave provisions in Texas Government Code § 661.202
Responding to a request for interpretation of rules for sick leave for
Texas School for the Blind and Visually Impaired employees, the
State Auditor's Office has advised that contract employees may use
sick leave for qualifying events only during instructional days for
which they are under contract.
As provided by Texas Government Code Section 661.206, an
employee may use up to eight hours of sick leave each calendar year
to attend parent-teacher conference sessions for the employee's
children who are in pre-kindergarten through 12th grade.
Employees separated from employment with the State under a formal
reduction-in-force policy are entitled to have their sick leave balance
restored if reemployed by the State within 12 months after the end of
the month following their termination.
Employees are entitled to have their sick leave balance restored if
they are separated from their employment for other reasons and are
reemployed by the State within 12 months after the end of the month
following their termination.
Employees who are who are separated for reasons other than a
formal reduction in force and who are employed by the same agency
or institution may only have their sick leave balance restored if they
have had a break in service of at least 30 calendar days since their
date of termination.
An employee who is restored to state employment following military
service under veterans' employment restoration provisions is
generally considered to have been on furlough or leave of absence
and, as such, is entitled to crediting (restoring) of sick leave accrued,
but unused, prior to such military service.
An employee's accrued sick leave balance will be transferred when
an employee moves from employment in one state agency to another,
provided the employment is uninterrupted.
Employees who have retired from a state agency under ERS and are
reemployed by the state will not have their sick leave balance
restored. Reemployed retirees consumed their sick leave balances
when they received additional state service credit for sick leave
during the application for retirement process with ERS. Retirees
receive an increase in annuity benefits because of the sick leave
balances that were added to service credit.
A terminating employee may, with the agreement of the employing
agency, remain on the payroll after the last day worked to use
vacation leave in lieu of being paid in a lump sum, provided that
such employee will not be eligible to use paid sick leave prior to
final separation from employment.
The estate of a deceased employee is entitled to payment for one-half
of accumulated sick leave, or for 336 hours of sick leave, whichever
is less, provided that the employee had continuous employment with
the State for at least six months at the time of death. Furthermore, the
amount paid to the estate will be based on the state employee's
compensation rate at the time of his or her death. An emolument in
lieu of base pay must be included in the compensation rate if the
employee was eligible for the emolument on the last day of
employment. Neither longevity pay nor hazardous duty pay may be
included in the compensation rate.
Extended Sick Leave:
Exceptions to the amount of sick leave an employee may take can be
authorized by the administrative head or heads of any state agency
only after a review of the merits of each individual case is completed.
All agencies are required to have a written statement filed with the
State Auditor covering the policies and procedures used for the
extension of sick leave in this manner, and the agencies must make
this statement available to all employees. Agencies should ensure
their policies and procedures for extended sick leave do not have
provisions that require employees to pay back extended sick leave; to
do so would suggest that the agency had been advancing salary to the
employee in contravention of the Texas Constitution.
Sick Leave Pool:
The governing body of each state agency is required to establish a
program within the agency to allow an employee to voluntarily
transfer earned sick leave time to a sick leave pool administered by a
person appointed by the governing body of the agency for that
purpose. Contributions of sick leave must be in increments of eight
hours with the exception of a retiring state employee who may
contribute accrued sick leave in increments of less than eight hours.
The sick leave pool is intended to help employees and their families
if a catastrophic illness or injury forces an employee to exhaust all
leave time earned by that employee and to lose compensation from
the State for the employee.
The determination of which injuries or illnesses are classified as
catastrophic is made by the trustee of the State Employee Uniform
Group Insurance Benefits Program established under the Texas
Employees Uniform Group Insurance Benefits Act. The Employees
Retirement System of Texas has defined "catastrophic" in the
following way:
"A severe condition or combination of conditions affecting the
mental or physical health of the employee or the employee's
immediate family that requires the services of a licensed
practitioner for a prolonged period of time and that forces the
employee to exhaust all leave time earned by that employee
and to lose compensation from the State for the employee."
Licensed practitioner means practitioner, as defined in the Texas
Insurance Code, who is practicing within the scope of his or
her license.
Texas Government Code § 661.202 defines immediate family as
1. An individual who resides in the same household as the
employee and is related to the employee by kinship, adoption,
or marriage
2. A foster child of the employee who resides in the same
household as the employee and who is under the
conservatorship of the Department of Protective and
Regulatory Services
3. A minor child of the employee, regardless of whether the child
lives in the same household.
An employee's use of sick leave to care for and assist members of the
employee's family who are not described above is "strictly limited to
the time necessary to provide care and assistance to a spouse, child,
or parent of the employee who needs the care and assistance as a
direct result of a documented medical condition."
An employee is eligible to use the time contributed to the sick leave
pool if, because of a catastrophic injury or illness, the employee has
exhausted all the sick leave time to which that employee is otherwise
entitled.
Holidays that occur during the use of sick leave pool are counted just
like regular sick leave; if a person is sick on a holiday, the person
receives "holiday pay" for that particular day, not "sick leave pay."
The employee may transfer to the pool one or more days of accrued
sick leave time. A retiring employee may designate the number of
accrued sick leave hours, in increments of 20 days, or 160 hours for
one month of service credit, to be used for retirement credit and the
number of hours to be donated on retirement to the sick leave pool.
An eligible employee may withdraw from the pool only with the
approval of the pool administrator. If the employee is seeking to
withdraw time because of a catastrophic illness or injury, the
employee must provide the pool administrator with a written
statement from a licensed practitioner who is treating the employee
or the employee's immediate family member. The statement must
provide sufficient information regarding the illness or injury to
enable the pool administrator to evaluate the employee's eligibility.
An eligible employee may not draw time from the agency sick leave
pool in an amount that exceeds one-third of the total amount of time
in the pool or 90 days, whichever is less. The pool administrator will
determine the exact amount of time that an eligible employee may
draw from the pool.
Agencies should ensure that their sick pool policy is not in conflict
with their extended sick leave policy required under the Texas
Government Code, Section 661.202(i).
Education Service Centers and Leave
Personal Leave: A regional education service center is required
to accept the transfer of personal leave by an employee who
was formerly employed by the State (Education Code Section
8.007). The personal leave will be converted to sick leave in
the education service center. Education Code Section 22.003
awards personal leave to certain state employees. These
employees are teachers at the School for the Deaf (Education
Code Section 30.024) and teachers at the School for the Blind
and Visually Impaired (Education Code Section 30.055).
Although employees in the schools in the Texas Department
of Criminal Justice accrue personal leave, this leave is not
transferable since those employees are not considered state
employees.
Vacation Leave: Vacation leave may not be transferred to
education service centers since they are not considered state
agencies. Accordingly, state employees who are transferring to
education service centers should be paid for any accumulated
vacation leave that has not been exhausted.
Sick Leave: Sick leave may not be transferred to education
service centers since they are not considered state agencies.
Any sick leave balances remaining to the employee would be
forfeited. However, some education service centers have
policies that allow them to give credit for sick leave as a
hiring incentive for employees who were formerly employed
by the State.
Sick leave may be transferred from education service centers to
state employment [according to Education Code Section
8.007(b)] at a rate not to exceed five days per year for each
year of employment.
Family and Medical Leave
The Family and Medical Leave Act provisions, first added to the
Appropriations Act during the 73rd Legislature, were modified
slightly during the 74th Legislature. These provisions were
established to ensure that the State of Texas, as an employer, would
be in full compliance with the entitlement established by the Family
and Medical Leave Act (FMLA). This law took effect on August 5,
1993, and is enforced by the U.S. Department of Labor, Wage and
Hour Division (DOL-WHD) which issued FMLA final regulations
that became effective April 6, 1995.
For purposes of Family and Medical Leave, an eligible employee is
one who has been employed by the State for at least 12 months and
who has worked for at least 1,250 hours during the 12 months
immediately preceding the start of leave. According to Title 29 Code
of Federal Regulations § 825.108, a state or a political subdivision of
a state constitutes a single employer for purposes of determining
employee eligibility for FMLA. If agencies have to determine
eligibility for an employee who transfers from another agency, they
should collect that information from the former agency. Therefore,
employment with a previous agency and the current agency must be
combined to determine if an employee met the eligibility criteria of
12 months or 1,250 hours of service during a 12 month period
preceding the commencement of the leave. Agencies should also
check to determine if the employee might have already taken any
FMLA leave while previously employed. Eligible employees are
entitled to FMLA leave provided they use all of their paid vacation
and sick leave while taking the FMLA leave
In a revised interpretation, the State Auditor's Office has stated that
sick leave may be used for the adoption of a child under three years
of age. Sick leave may be used in conjunction with FMLA leave
when a child under the age of three is adopted regardless of whether
the child is actually sick at the time of adoption. Additionally, a state
employee who is the father of a child, may use his sick leave in
conjunction with the child's birth only if the child is actually ill or to
care for his spouse while she is recovering from labor and delivery.
Employees who apply for FMLA leave and are receiving temporary
disability benefit payments or workers' compensation benefits cannot
be required to use their paid vacation or sick leave prior to taking
FMLA leave. Employees who are presently on FMLA leave and are
receiving temporary disability payments or workers' compensation
benefits may elect to use their paid vacation or sick leave while on
FMLA leave.
FMLA provides that all eligible employees are entitled to a total of
12 weeks of leave during any 12 month period for one or more of the
following reasons:
1. For the birth of a son or daughter and to care for the newborn
child
2. For the placement with the employee of a son or daughter for
adoption or foster care
3. To care for the employee's spouse, child, or parent with a
serious health condition
4. Because of a serious health condition that makes the employee
unable to perform the functions of his or her job
Other FMLA provisions are as follows:
1. An employee who takes leave under the law must be returned
to the same job or a job with equivalent status and pay.
2. The employer must continue the employee's health benefits
during the leave period at the same level and conditions as if
the employee had continued work.
3. The employer can require an employee to provide a doctor's
certification of the serious health condition.
4. FMLA leave does not have to be used consecutively; it may be
used intermittently.
5. The DOL has provided the following guidance concerning
holidays occurring while an employee is on FMLA.
If an employee takes FML in one continuous block and a
holiday or closing occurs during the employee's time off, the
holiday or closing will count as part of the employee's FML
entitlement. That is, just because the business/agency is closed
for MLK Day, San Jacinto Day, or a freak ice storm in
Harlingen does not buy them one more day. According to the
Code of Federal Regulations (29 CFR 825.200) the only
exception is when the entire business ceases operation for at
least a week, such as Spring Break for schools or an agency-
wide shutdown. Note that the regulation says the closure must
last at least one week.
Holidays, ice days, shutdowns, etc. do not count against
employees who are on an intermittent or reduced leave
schedule.
FMLA contains more specific provisions, including those for
intermittent leave and leave on a reduced schedule, and definitions
including spouse, parent, son, daughter, and serious health condition.
An employee does not have the option of choosing whether or not to
designate leave as FMLA leave for a qualifying event, as interpreted
by the State Auditor's Office. In all circumstances, it is the
employer's responsibility to determine whether leave qualifies as
FMLA leave.
Title 29 of the Code of Federal Regulations, Section 825.207(i), does
not permit FLSA compensatory time to be used towards FMLA
leave. If an employee elects to use FLSA compensatory time while
out on FMLA leave, that time is not counted toward the FMLA 12-
week entitlement.
In accordance with FMLA regulations issued by the DOL-WHD,
Section 825.200 (b), state agencies and institutions of higher
education are permitted to choose any one of the following four
methods for determining the "12 month period" in which the 12
weeks of leave entitlement occurs:
1. A calendar year
2. Any fixed 12-month "FML year" (for example, a fiscal year or
an employee's "anniversary" date)
3. A 12-month period measured forward from the date an
employee's first FML begins
4. A rolling 12-month period measured backward from the date
an employee uses any FML
After paid leave is used, the State will continue to pay for its portion
of an employee's coverage under the group health plan during any
full calendar months of leave without pay which may be taken during
FMLA leave.
An employee on FML is not entitled to accrue state service credit for
any full calendar months of leave without pay taken while on FML
and does not accrue vacation or sick leave for such months of leave
without pay. Further, any full calendar months of leave without pay
are not included in the calculation of the minimum number of
continuous months of employment under the merit increase
provisions set forth in Texas Government Code, Section 659.255,
and under the employee vacations and leave provisions in Texas
Government Code, Section 661.152.
Parental Leave
Employees with less than 12 months of state service or less than
1,250 hours of work in the 12 months immediately preceding the
start of leave are entitled to a parental leave of absence, not to exceed
12 weeks (480 hours), if the employee uses all available and
appropriate paid vacation and sick leave while taking the parental
leave. Such parental leave may only be taken for the birth of a
natural child or the adoption or foster care placement with the
employee of a child under three years of age. The leave period begins
with the date of birth or the adoption or foster care placement. Sick
leave may be used when a child under the age of three is adopted
regardless of whether the child is actually sick at the time of
adoption.
The Federal Pregnancy Discrimination Act of 1978 provides that
discrimination on the basis of pregnancy, childbirth, or related
medical conditions constitutes unlawful sex discrimination under
Title VII of the Civil Rights Act of 1964 as amended. The Act states
women affected by pregnancy or related conditions must be treated
in the same manner as other applicants or employees with similar
abilities or limitations.
Combining Family Medical and Parental Leave
Parental leave was designed with less stringent time requirements
than the Family Medical Leave Act. It is only available to employees
with less than 12 months of state service or who worked fewer than
1,250 hours during the 12 month period preceding the beginning of
parental leave. The statute states parental leave "begins with the date
of the birth of a natural child or the adoption or foster care placement
of a child under three years of age." Further, parental leave must be
taken during the 12 weeks beginning on the date of birth of a natural
child by the employee or the adoption or foster care placement with
the employee.
Family medical leave is only available to employees with more than
12 months of state service and may be used (among other reasons)
"for the birth or placement of a child for adoption or foster care."
Since eligibility time requirements for the two types of leave are
different, an employee would meet the requirements for either
parental leave or family medical leave, not both, so the two types of
leave could not be taken back-to-back for the same event.
There are certainly circumstances where an employee could take
parental leave, return to duty, and subsequently be eligible for FMLA
leave. The employee could then take FMLA leave for the birth,
adoption, or foster placement of a child or for a reason not related to
the birth, adoption, or foster placement of a child.
Foster Parent Leave
A state employee who is a foster parent to a child under the
conservatorship of the Department of Protective and Regulatory
Services (DPRS) is entitled to a leave of absence with full pay for the
purpose of attending staffing meetings held by the DPRS regarding
the employee's foster child. In addition, the employee may attend,
with a paid leave of absence, the Admission, Review, and Dismissal
(ARD) meeting held by a school district regarding his or her foster
child.
Parent-Teacher Conference Leave
An employee may use up to eight hours of sick leave each calendar
year to attend parent-teacher conference sessions for the employee's
children who are in pre-kindergarten through 12th grade. Employees
must give reasonable notice of intention to use sick leave to attend
such conferences. Part-time employees receive Parent-Teacher
Conference Leave on a proportional basis.
Emergency Leave
An employee shall be granted emergency leave by an agency's
administrative head for a death in the employee's family. An
employee's family is defined as the employee's spouse, the
employee's and the spouse's parents, children, brothers, sisters,
grandparents, and grandchildren. An agency head may grant
emergency leave for other reasons determined to be for good cause.
Administrative Leave for Outstanding Performance
Administrative leave with pay may be granted by the head of an
agency as a reward for outstanding performance as documented by
employee performance appraisals. The total amount of such
administrative leave granted may not exceed 32 hours during any
fiscal year. The State Auditor's Classification Office has opined that
executive directors of state agency are not eligible for administrative
leave for outstanding performance
Military Leave
State employees are eligible for the following types of leave for
military service: (1) authorized training or duty for members of the
state military forces and members of any of the reserve components
of the United States Armed Forces, (2) call to National Guard active
duty by the Governor, and (3) national emergency active duty for a
member of a reserve branch of the U.S. armed forces.
Adjusted Work Schedule: To facilitate participation in military
duties by state employees, each state agency shall adjust the work
schedule of any employee who is a member of the Texas National
Guard or the United States Armed Forces Reserve so that two of the
employee's days off work each month coincide with two days of
military duty to be performed by the employee.
Authorized Training for Duty: A state employee who is called to
active duty or authorized training as a member of the state military
forces or any of the reserve components of the United States Armed
Forces is entitled to a leave of absence from his or her respective
duties for not more than 15 days in each federal fiscal year without
loss of time, efficiency rating, vacation time, or salary.
The Attorney General has held that the 15 days need not be
consecutive and "members of the state military forces or members of
reserve components of the U.S. Armed Forces who are ordered to
duty by proper authority on nonconsecutive days are entitled to 15
days total." This same opinion also holds that 15 days refers to
working days and not calendar days.
In 1979, the State Auditor wrote,"after exhausting the 15 days of
military leave, the employee may use accrued vacation leave to the
extent available or be placed in a leave without pay status (or a
combination of the two) for the remainder of the active duty period."
A 1979 Attorney General Opinion stated, "a state employee who is
engaged in 'authorized training duty' in the state military forces is
entitled to receive compensation for up to 15 working days per year
during which he is absent from his regular employment."
Call to National Guard Active Duty by the Governor: A state
employee who is called to active duty as a member of the National
Guard by the Governor because of a state emergency is entitled to
receive emergency leave without loss of military or annual leave.
Such leave will be provided with full pay. The State Auditor's Office
has interpreted that this time is not limited and does not count against
military leave or annual leave.
Call to National Duty, U.S. Armed Forces Reserve Branch: An
employee called to active duty during a national emergency by a
reserve branch of the U.S. Armed Forces is entitled to an unpaid
leave of absence. However, the employee retains any accrued sick or
vacation leave and will be credited with those leave balances upon
return.
Restoration of Employment: Any employee who is restored to a
position upon returning from military service is considered to have
been on furlough or leave of absence during his or her time of federal
or state military service. The employee is entitled to participate in or
other benefits to which a public employee is or may be entitled.
To be eligible for restoration to his or her previous employment upon
returning from military service, the employee must have been
honorably discharged no later than the fifth anniversary of the date of
induction, enlistment, or call to active military service, and be
physically and mentally qualified to perform the duties of that
position.
The Attorney General has ruled that state employees returning to
work following military service under restoration provisions are
entitled to include time spent on active duty with longevity of
employment (state service credit) for purposes of vacation and sick
leave entitlement. Returning employees do not accrue vacation or
sick leave while on active military duty and are not considered
employed by the State.
Volunteer Firefighter and Emergency Medical Services Training
Leave
Volunteer firefighters and emergency medical services volunteers
will be granted a paid leave of absence not to exceed five working
days each fiscal year for attending training schools conducted by
state agencies. This leave of absence may also be granted to
volunteer firefighters or emergency medical services volunteers for
the purpose of responding to emergency fire or medical situations if
the agency or institution has an established policy for granting the
leave time.
Certified American Red Cross Activities Leave
Any state employee who is a certified disaster service volunteer of
the American Red Cross, or who is in training to become such a
volunteer, may be granted a leave of absence not to exceed ten days
each year to participate in specialized disaster relief services. The
employee must have supervisory authorization in addition to a
request from the American Red Cross and the approval of the
Governor's Office. If the above conditions are met, the employee will
not lose pay, vacation time, sick leave, earned overtime, and/or
compensatory time during such leave. The pool of certified disaster
volunteers must not exceed 350 participants at any one time.
Leave for Employees with a Disability
A state employee who is a person with a disability as defined by
Human Resources Code, Section 121.002, will be granted a paid
leave of absence not to exceed ten days each fiscal year for the
purpose of attending a training program to acquaint the employee
with an assistance dog to be used by the employee.
Payment of Accrued Leave of Deceased Employees
The estate of an employee who dies while employed by the State is
entitled to payment for all of the employee's accumulated vacation
leave and to one-half of the employee's accumulated sick leave, or
336 hours of sick leave, whichever is less. The payment is calculated
at the salary rate paid to the employee at the time of death.
The estates of appointed officers or employees of a state agency who
normally work at least 900 hours per year, including hourly and
temporary state employees, are eligible for this benefit. For this
purpose, the term "state employee" includes a person employed by
the Teacher Retirement System, the Texas Education Agency, the
Texas Higher Education Coordinating Board, the Texas National
Research Laboratory Commission, the Texas School for the Blind
and Visually Impaired, the Texas School for the Deaf, the Texas
Youth Commission, the Windham School District of the Texas
Department of Criminal Justice, or the Texas Rehabilitation
Commission. The term "state employee" also includes a classified,
administrative, faculty, or professional employee of a state agency or
institution of higher education who has accumulated vacation leave,
sick leave, or both, during the employment.
The term "state employee" does not include:
A person who holds an office normally filled by vote of the
people
A person employed on a piecework basis
An operator of equipment or a driver of a team whose wages are
included in the rental paid by a state agency to the owner of
the equipment or team
A person covered by the Judicial Retirement System (Plan One
or Plan Two)
A person covered by the Teacher Retirement System (except for
state employees noted in the paragraph above)
An independent contractor or the employee of an independent
contractor
In 1929, the Attorney General ruled "a day begun is a day done."
Thus, the Comptroller pays a full day's wages to an employee who
begins, but does not finish, a work day. If an employee dies during a
work day, his survivors are entitled to receive compensation for the
last day of service, even though the employee had not worked every
hour during that day. Similarly, the survivors of an annuitant who
dies on the last day of a quarter are entitled to receive an annuity for
the entire quarter.
A deceased state employee's estate is entitled to receive payment for
earned but unused (banked) Fair Labor Standards Act overtime. The
Attorney General ruled in 1976 that the estate of a deceased
employee is not entitled to receive payment for earned but unused
state compensatory time. However, subsequent to the issuance of this
opinion (H-899), the Legislature made exceptions to allow for
payment of state compensatory time on a straight time basis to
employees of certain agencies and institutions of higher education
who are subject to FLSA overtime revisions.
A deceased employee's estate shall receive payment for accrued but
unused vacation leave and entitled sick leave. This payment is
computed as though the employee had actually used these leave
hours while on the agency's payroll. Any state holiday that falls
within this period should not be charged against the accrued leave
hours (i.e., holidays which fall on a recognized work day have the
effect of extending these leave hours).
Leave Without Pay
Agencies may grant a leave of absence without pay subject to the
following provisions
All such leave without pay may not exceed 12 months.
Except for disciplinary suspensions, workers' compensation, and
military situations, all accumulated paid leave entitlements
must be exhausted before granting such leaves, with the
additional provision that sick leave must be exhausted only in
those cases where the employee is eligible to take sick leave as
provided in the sick leave provisions.
Subject to fiscal constraints, approval of such leave constitutes a
guarantee of employment for a specified period of time.
An administrative head of an agency may provide exceptions to
these limitations for such reasons as interagency agreements or
educational purposes. The Attorney General said in 1985 that
the reasons stated in the leave provisions for granting
exceptions to the requirement to exhaust paid leave prior to
leave without pay "exemplify purposes for which the agency
head may allow exemptions; they do not list the purposes
exhaustively."
Any full calendar month in which an employee is on leave
without pay will not be counted in the calculation of total state
service credit for the purposes of vacation or longevity pay
entitlement, except in the case of an employee returning to
state employment from military leave without pay. No
employee will accrue vacation or sick leave for such month.
Any such full calendar month of leave without pay does not
constitute a break in the continuity of state employment, but
will not be included in the calculation of the minimum number
of continuous months of service required under merit salary
and employee vacation and leave provisions. Employees on
leave without pay for an entire month do not accrue retirement
service credit for that month.
A full-time employee or regular part-time employee who is subject to
FLSA and is on leave without pay will have his or her compensation
reduced for that particular pay period at the equivalent hourly rate of
pay times the number of work hours lost by leave without pay. FLSA
exempt employees may also be subject to salary reduction in the
same manner, in accordance with provisions set forth in the overtime
provisions of Title 29 of the Code of Federal Regulations, Section
541.188. FLSA exempt employees who are absent from work for less
than one day for personal reasons or sickness or disability under
certain conditions may be subject to a salary reduction.
Negative Leave and Compensatory Time Balances Prohibited
The State Auditor's Office has advised that a state agency must not
allow an employee to carry a negative sick leave, vacation leave, or
compensatory time balance. In 1974, the Attorney General stated that
it would be unconstitutional for a state agency to advance salary to
an employee. However, in inclement weather or other circumstances
beyond the control of the Department, the Texas Department of
Transportation is authorized to grant construction or maintenance
employees time off with pay with the hours charged to the
Compensatory Time Taken Account, provided that such advanced
time must be repaid by the employee within the following 12 months
or at termination, whichever is sooner.
Sick and Vacation Leave for Retirees Resuming State Service
The State Auditor's Office has opined that retired state employees
who return to state employment are eligible for vacation and sick
leave accruals at the same rate of accrual prior to his or her
retirement.
Payment Entitlements Upon Separation From State Employment
Type Of
Separati
on
Lump-Sum
Payment For
Further
Accrual
Of
Lump-Sum
Payment
For
Payme
nt For
Longe
vity Or
Hazar
dous
Duty
Holi
day
Pay
Gene
ral
Salar
y
Incre
ase
Accru
ed
Vacati
on
Leave
Accru
ed
Sick
Leave
Balan
ce
Vacat
ion
Leave
Sic
k
Lea
ve
Accru
ed
State
Comp
Time 6
Accru
ed
FLSA
Comp
Time
Any
separatio
n where
the
employe
e is
permitte
d to
remain
NO
(but
may
expend
accrue
d
vacatio
n prior
to
NO
(also,
not
eligibl
e to
use
sick
leave
while
NO NO NO
(AGO
H-883
dated
9-26-
76) 2
YES
(29
CFR,
Part
553)
YES 3 YES 3
YES 3
on the
payroll
to
expend
accrued
vacation
separat
ion)
remai
ning
on
payrol
l to
extend
vacati
on)
Any
separatio
n where
the
employe
e does
not
remain
on the
payroll
to
expend
accrued
vacation
YES NO N/A N/A
NO
(AGO
H-883
dated
9-29-
76) 2
YES
(29
CFR,
Part
553)
NO YES 4
NO
Any
separatio
YES
(at the
NO
(may
NO NO NO
(but
YES
(to the
YES 3 YES 3
YES 3
n where
the
employe
e is
permitte
d to
remain
on the
payroll
to
expend
accrued
state or
FLSA
compens
atory
time
time of
separat
ion)
not
use
sick
leave
while
remai
ning
on
payrol
l to
expen
d state
or
FLSA
comp.
Time) 7
may
expen
d
accrue
d state
comp.
Time
prior
to
separa
tion -
AGO
H-883
dated
9-26-
76) 2
extent
such
time
has
not
been
exhau
sted -
29
CFR,
Part
553)
Any
separatio
n where
the
employe
e does
not
remain
YES NO N/A N/A NO
(AGO
H-883
dated
9-26-
76) 2
YES
(29
CFR,
Part
553)
NO NO NO
on the
payroll
to
expend
accrued
state or
FLSA
compens
atory
time
Death
(paymen
t to
estate)
YES
YES -
for 1/2
of sick
leave
hours
not to
excee
d 336
hours
(lump-
sum
payme
nt) 5
N/A N/A
NO
(AGO
H-899
dated
11-18-
76) 2
YES
(29
CFR,
Part
553)
NO YES 4
NO
General References: Texas Government Code Ann., Sections
662.003, 661.032, 661.062, 661.067, 661.152, 659.015, 659.041.
Neither an employee nor an employee's estate may receive payment
for vacation balance if the employee has not completed six months of
continuous (unbroken) employment with the State (Texas
Government Code Ann., Sections 661.032, 661.152 and 661.062).
According to AGO JC-0302, starte employees have no vested right in
the method of calculating compensation for vacation benefits that
pre-dated the amendment of section 661.063 of the Government
Code.
2 Subsequent to the issuance of AGO H-883 and H-899, the
Legislature has made exceptions to allow for payment of state
compensatory time to employees of certain agencies and institutions
of higher education under certain circumstances (General
Appropriations Act, Article VII, Section 1, TXDOT appropriations,
Rider 11; Article II, Section 1, MHMR appropriations, Rider 20;
Texas Government Code Ann., Section 659.015
This entitlement is applicable to the period covered by the expended
accrued vacation time, state comp., or FLSA comp. time as though
the employee actually worked that time.
4 This entitlement is applicable to the period beginning on the day
following the last day of employment and ending on the last working
day through which the accrued leave (both vacation and/or sick)
would have extended.
5 An employee's estate may not receive payment for sick leave if the
employee has not completed six months of continuous (unbroken)
employment with the State at time of death (Texas Government Code
Ann., Sections 661.033; 661.152
6 This includes both state and holiday compensatory time.
7 Texas Government Code Ann., Section 661.067
Source: State Classification Office
Payment Entitlements For Employees Of Higher Education Institutions Upon
Separation from State Employment
Employme
nt Status
Vacation
Accrual
Sick
Leave
Accrua
l
State
Servic
e
Credit
Longevit
y Pay
Holiday
s
Positions
requiring
student
status as a
condition of
employment
No No Yes No No
Faculty
(Full-time
or part-time,
20 hours or
more)
No, except
those with
appointmen
ts of 12
months or
more.
Yes Yes No Yes
Non-faculty
(Full-time)
Yes Yes Yes Yes Yes
Non-faculty
(Part-time,
20 hours or
more)
Yes Yes Yes No Yes
Other than
Faculty &
Non-Faculty
No No Yes No No
HOLIDAYS
Section 662.003 of the Texas Government Code identifies three
types of holidays for state employees: national, state, and optional.
Eligible employees are entitled to a paid day off from work on
national and state holidays as specified by the Legislature. The table
entitled, State Holiday Schedule lists the holidays and their dates for
the 2002-2003 biennium.
A state employee is entitled to a paid day off from work for each
national and state holiday if:
The holiday does not fall on a Saturday or Sunday; and
The employee is not on unpaid leave.
A state employee who is a peace officer commissioned by the
Department of Public Safety and who is required to work on a
national or state holiday that falls on a Saturday or Sunday is entitled
to compensatory time off at the rate of one hour for each hour
worked on the holiday.
Holidays for State Agencies
A state agency must have enough state employees on duty during a
state holiday to conduct the public business of the agency except for
those state holidays that fall on a Saturday or Sunday, the Friday
after Thanksgiving Day, December 24th, or December 26th
Employees who actually work on a national holiday or a state
holiday will be allowed compensatory time off during the 12-month
period following the date of the holiday worked. Employees are
required to give reasonable advance notice when taking this
compensatory time; however, employees do not have to specify the
reason for the request. An employee who normally works 40 hours
per week on a schedule other than Monday through Friday, 8 A.M. to
5 P.M., is entitled to paid holiday time off that is equivalent to the
holiday time that employees who work normal schedules receive.
The holiday pay for part-time employees shall be determined on a
basis proportionate to their hours worked.
According to Texas Government Code § 662.005, "An individual
who is a state employee on the last workday [and not on leave
without pay] before or the first workday after a national or state
holiday, or on both workdays, is entitled, except as provided by
Section 662.010, to a paid day off from working for a state agency on
the holiday if: (1) the holiday does not fall on a Saturday or Sunday;
and (2) the General Appropriations Act does not prohibit state
agencies from observing the holiday." See the discussion in the
following sections for clarification.
Holiday Occurring Immediately Before a New Employee Starts
Work
According to Texas Government Code § 662.010
"An individual who is not a state employee
on the last workday before a state or
national holiday but who is an employee on
the first workday after the holiday may not
be paid for the holiday if it occurs during
the same month as the last workday before
the holiday."
Example: In this particular case a new employee starts work on
January 2, 2002. Should he or she be paid for the January 1, 2002
holiday?
The individual was not an employee on December 31st (last workday
before a state or national holiday) but was an employee on January
2nd (first workday after the holiday). The statute says the employee
"may not be paid for the holiday if it occurs during the same month
as the last workday before the holiday." The last workday before the
holiday is in December; the first workday after the holiday is in
January, different months. Accordingly, the individual is entitled to
be paid for the January 1, 2002, holiday.
December 2001/January 2002
Sunda
y
Mond
ay
Tuesday Wednesd
ay
Thursd
ay
Frida
y
Saturd
ay
23 24 25 26 27 28 29
30 31 1
HOLID
AY
2 3 4 5
Holiday Occurring Immediately Following the Last Workday of
a Current Employee
In a similar manner:
"an individual who is a state employee on the last workday
before a state or national holiday but who is not an employee
on the first workday after the holiday may not be paid for that
holiday if it occurs before the first workday of the month and
during that month."
Example: In this particular case a current employee's last work day is
December 31, 2001. Should he or she be paid for the January 1, 2002
holiday?
The individual was an employee on December 31st (last workday
before a state or national holiday) but was not an employee on
January 2nd (first workday after the holiday). The statute says the
employee "may not be paid for the holiday if it occurs before the first
workday of the month and during that month." The first workday of
the month is January 2nd, and the holiday occurs during the month of
January, both events occurring during the same month. Accordingly,
the individual may not be paid for the January 1, 2002, holiday.
Holidays for Employees in a Leave Without Pay (LWOP) Status
Employees who are in LWOP status before and after a holiday may
not be paid for the holiday. Eligibility for paid holidays for
employees who change their LWOP status either immediately
preceding or immediately following a holiday is determined the same
as if they were a new employee or a terminating employee.
In cases of a partial LWOP day, the employee will receive credit for
working the entire day. The Comptroller's office has determined that
only employees who use unpaid leave for the entire workday will be
considered on LWOP for the day.
State Holiday Schedule
Fiscal Year 2002
Holiday Agency Status Date Day of Week
Labor Day All agencies
closed
09-03-01 Monday
Rosh
Hashanah
Optional
Holiday
09-18-01 Tuesday
Rosh
Hashanah
Optional
Holiday
09-19-01 Wednesday
Yom Kippur Optional
Holiday
09-27-01 Thursday
Veteran's Day
11-11-01 Sunday
Thanksgiving
Day
All agencies
closed
11-22-01 Thursday
Day after
Thanksgiving
All agencies
closed
11-23-01 Friday
Christmas Eve
Day
All agencies
closed
12-24-01 Monday
Christmas Day All agencies
closed
12-25-01 Tuesday
Day after
Christmas
All agencies
closed
12-26-01 Wednesday
New Year's
Day
All agencies
closed
01-01-02 Tuesday
Confederate
Heroes' Day
01-19-02 Saturday
Martin Luther
King, Jr. Day
All agencies
closed
01-21-02 Monday
Presidents' Day All agencies
closed
02-18-02 Monday
Texas
Independence
Day
03-02-02 Saturday
Good Friday Optional
Holiday
03-29-02 Friday
Cesar Chavez
Day
03-31-02 Sunday
San Jacinto
Day
04-21-02 Sunday
Memorial Day All agencies
closed
05-27-02 Monday
Emancipation
Day
Skeleton crew
required
06-19-02 Wednesday
Independence
Day
All agencies
closed
07-04-02 Thursday
LBJ's Birthday Skeleton crew
required
08-27-02 Tuesday
Fiscal Year 2003
Holiday Agency
Status
Date Day of Week
Labor Day All agencies
closed
09-02-02 Monday
Rosh Hashanah
09-07-02 Saturday
Rosh Hashanah
09-08-02 Sunday
Yom Kippur Optional
Holiday
09-16-02 Monday
Veteran's Day All agencies
closed
11-11-02 Monday
Thanksgiving All agencies 11-28-02 Thursday
Day closed
Day after
Thanksgiving
All agencies
closed
11-29-02 Friday
Christmas Eve
Day
All agencies
closed
12-24-02 Tuesday
Christmas Day All agencies
closed
12-25-02 Wednesday
Day after
Christmas
All agencies
closed
12-26-02 Thursday
New Year's Day All agencies
closed
01-01-03 Wednesday
Confederate
Heroes' Day
01-19-03 Sunday
Martin Luther
King, Jr. Day
All agencies
closed
01-20-03 Monday
Presidents' Day All agencies 02-17-03 Monday
closed
Texas
Independence
Day
03-02-03 Sunday
Cesar Chavez
Day
Optional
Holiday
03-31-03 Monday
Good Friday Optional
Holiday
04-18-03 Friday
San Jacinto Day Skeleton
crew
required
04-21-03 Monday
Memorial Day All agencies
closed
05-26-03 Monday
Emancipation
Day
Skeleton
crew
required
06-19-03 Thursday
Independence All agencies 07-04-03 Friday
Day closed
LBJ's Birthday Skeleton
crew
required
08-27-03 Wednesday
Weekend Holidays:
Offices will not be closed on another day when designated holidays
fall on a Saturday or Sunday. Such holidays will not be observed.
Skeleton Crew Holidays:
A state agency must have enough state employees on duty to
conduct business during the skeleton crew holidays listed.
Compensatory time off during the 12-month period following the
holiday worked will be allowed for this duty.
Optional Holidays:
A state employee is entitled to observe Rosh Hashanah, Yom
Kippur, and Good Friday in lieu of any state holiday where a
skeleton crew is required. An agency's administrative director may
allow employees to observe Cesar Chavez Day as a state holiday
instead of another state holiday that falls on a weekday. The agency
must remain open for business at minimum staffing levels (skeleton
crew).
Institution of Higher Education Holidays:
Institutions of higher education may establish their own holidays in
keeping with academic schedules, provided the number of holidays
granted does not exceed the number of holidays to which employees
of state agencies are entitled.
Transferring Employees and Holidays
In the event that a state or national holiday falls between the dates an
employee separates from one state agency and begins employment
with another state agency without a break in service, the agency to
which the employee transfers is responsible for paying the employee
for the holiday, regardless of whether the agency or institution of
higher education that receives the new employee recognizes the
holiday.
Optional Holidays
An individual who is a state employee on the last workday before or
the first workday after an optional holiday is entitled to a paid day off
for the optional holiday if it does not fall on a Saturday or Sunday, if
state agencies are not prohibited from observing the optional holiday,
and if that employee agrees to relinquish during that same year a
state holiday that does not fall on a Saturday or Sunday. However,
the Friday after Thanksgiving Day, December 24, and December 26
are state holidays that the employee may not relinquish in return for
paid time off during an optional holiday, since these three state
holidays do not require any agency staffing.
Holidays for Institutions of Higher Education
Only regular employees of institutions of higher education are
eligible for paid holidays. A regular employee for this purpose is
defined as someone who is employed to work at least 20 hours per
week for a period of at least four and one-half months, excluding
students employed in positions that require student status as a
condition for employment. Student employees of institutions of
higher education do not get paid for holidays.
State employees who are employed by multiple agencies and who
work more than 40 hours per
week may not accrue holiday leave at a rate that would exceed that
for a full-time, 40 hour per week employee.
Employees of institutions of higher education may be paid for
holiday compensatory time hours earned on a straight time basis
when the taking of compensatory time would be disruptive to normal
teaching, research, or other critical functions
A university may determine the days on which employees receive
paid leave for state holidays, as long as the number of holidays in a
fiscal year is the same number as the number of holidays for state
agencies as set by the Legislature.
There are at least three options regarding a university's determination
of holidays:
A university may determine all of the holidays that the
institution will celebrate and mandate those holidays for all
employees.
A university may determine some of the holidays that the
institution will celebrate and mandate those holidays for all
employees. For the remaining holidays, the university may
allow each employee to select his or her own holidays. These
"floating holidays" would be unique for each employee.
A university may allow each employee to choose all of his or her
own holidays as "floating holidays," as long as the number of
holidays in a fiscal year is the same as the number of holidays
for state agencies.
INSURANCE
Accelerated Payment of Life Insurance Benefits
The trustees of the Uniform Group Insurance Benefits Program may
adopt rules to pay accelerated life insurance benefits to a terminally
ill, terminally injured, or permanently disabled participant in
amounts that benefit the participant without increasing the costs of
providing benefits. The amount of any accelerated payment will be
deducted from the amount of the death benefit. A participant may
also enter into a viatical settlement and irrevocably designate a
beneficiary in conjunction with that settlement.
Accelerated benefits and designation of beneficiaries in conjunction
with viatical settlements are limited to group life insurance policies
delivered, issued for delivery, or renewed on or after September 1,
1997. Participants may not elect to receive an accelerated benefit or
designate a beneficiary in conjunction with a viatical settlement
before January 1, 1998.
Benefit Replacement Pay
Beginning with wages paid January 1, 1996, the State of Texas no
longer paid the federal taxes imposed on state employees and state-
paid judges under the Federal Insurance Contributions Act (FICA).
This payment was commonly known as "state-paid social security."
However, the Legislature offset the repeal of the tax payment by
providing "benefit replacement pay" (BRP) for eligible
employees.An eligible state employee is an individual who was, on
August 31, 1995:
An employee of a state agency and eligible for the state-paid
social security contribution of the employee tax under Section
606.064 of the Texas Government Code
Using unpaid leave from a state job, if the individual would have
been eligible for state payment of the employee tax had he or
she not been using his or her unpaid leave
Not working for a state agency because his or her employment
customarily did not include summer months; because the
individual had contracted with the agency before August 31,
1995, to resume working for the agency before September 2,
1995; and because the position held on September 2, 1995,
would have made the individual eligible for the state-paid
employee tax if the employee had held that position at that
time
An employee's benefit replacement pay is equal to the sum of 5.85
percent of the FICA covered wages earned by the employee during
the pay period (not to exceed $16,500)and an amount equal to the
additional retirement contribution paid by the employee because of
the benefit replacement pay. The amount paid on the behalf of
eligible employees, not including the retirement contribution, may
not exceed $965.25 each calendar year.
State employers have the option of offering benefit replacement pay
on behalf of their employees in equal installments during the
calendar year. If the employer so chooses, employees who will be
receiving $965.25 in benefit replacement pay may opt to be paid in
the equal installments. However, if an employee chooses the equal
installment payments and terminates or leaves his or her employment
before the end of the year, he or she will not be paid the difference
between the benefit replacement pay received and the amount he or
she would have received had he or she not chosen the installment
plan. Also, an eligible employee who leaves state employment after
August 31, 1995, for at least 12 consecutive months before returning,
is ineligible to receive benefit replacement pay.
Law Enforcement Officers and Firefighters Survivors' Benefits
Article III, Section 51(d) of the Texas Constitution empowers the
Legislature to provide assistance payments to eligible survivors of
certain officers who "because of the hazardous nature of their duties,
suffer death in the course of the performance of their duties." Section
615.003 of the Texas Government Code defines eligible officers,
firefighters, and other employees. Eligible survivors may include the
surviving spouse; a child; or, a surviving parent, if there is no
surviving spouse or child.
A surviving spouse may receive $250,000. If there is no eligible
surviving spouse, the State shall pay $250,000 in equal shares to
surviving children. A surviving parent may receive $250,000 if he or
she is the only surviving parent. If there are two surviving parents,
each will receive equal shares.
A surviving spouse or a surviving child is eligible to receive
education benefits. The child must be claimed as a dependent on the
income tax return filed with the Internal Revenue Service by the
listed individual in the year preceding the year in which the listed
individual died. An eligible person who enrolls as a full-time student
at an institution of higher education is exempt from tuition and fees
at that institution of higher education until the student receives a
bachelor's degree or 200 hours of course credit, whichever occurs
first. If the student elects to reside in housing provided by the
institution of higher education and qualifies to reside in that housing,
the institution shall pay the cost of the student's contract for food and
housing until the student receives a bachelor's degree or 200 hours of
course credit, whichever occurs first. If there is no space available in
the institution's housing, the institution shall pay to the student each
month the equivalent amount that the institution would have
expended had the student lived in the institution's housing. The
institution is not required to pay the student the monthly payment if
the student would not qualify to live in the institution's housing. The
institution of higher education shall pay to the student the cost of the
student's textbooks until the student receives a bachelor's degree or
200 hours of course credit whichever occurs first. These education
benefit payments are in addition to any payment made under
Government Code Section 615.022, Payments to Eligible Survivors.
Additionally, as permitted by Texas Government Code Section
615.121, the state will shall pay the funeral expenses related to the
deceased officer or employee and an annuity to an eligible surviving
spouse of a peace officer or an employee of the institutional division
or state jail division of the Texas Department of Criminal Justice, as
described by Texas Government Code Section 615.003(1) or (6),
who was killed in the line of duty and who had not qualified for an
annuity under an employees' retirement plan The annuity will consist
of monthly payments that equal the greater of:
the monthly annuity payment the deceased officer or employee
would have received if the officer or employee had survived,
had retired on the last day of the month in which the officer or
employee died, and had been eligible to receive an annuity
under an employees' retirement plan; or
the minimum monthly annuity payment the deceased officer or
employee would have received if the officer or employee had
been employed by the state for 10 years, had been paid a
salary at the lowest amount provided by the General
Appropriations Act for a position of peace officer or employee
of the institutional division or state jail division of the Texas
Department of Criminal Justice, as described by Section
615.003(1) or (6), and had been eligible to retire under the
Employees Retirement System of Texas.
The surviving spouse is entitled to continue to receive monthly
payments under Subsection (a) until the earlier of:
the date the surviving spouse remarries;
the date the surviving spouse becomes eligible for retirement
under an employees' retirement plan; or
the date the surviving spouse becomes eligible for Social
Security benefits.
Survivor benefits under this provision are administered by the Board
of Trustees of the Texas Employees Retirement System and are
available to the eligible survivors of the following:
Individuals who are elected, appointed, or employed as peace
officers by the State or a political subdivision of the State
under Article 2.12, Code of Criminal Procedure, or other law
Custodial personnel of the Texas Department of Criminal Justice
(TDCJ)
Jailers or guards of a county jail who are appointed by the
sheriff; who perform a security, custodial, or supervisory
function over the admittance, confinement, or discharge of
prisoners; and who are certified by the Texas Commission on
Law Enforcement Officer Standards and Education
Juvenile correctional employees of the Texas Youth Commission
Employees of the Texas Department of Mental Health and
Mental Retardation who work at the department's maximum
security unit, or who perform on-site services for TDCJ
Paid aircraft crash and rescue firefighters
Members of organized volunteer fire departments that are not
paid, that have more than 20 active members, and that conduct
a minimum of two drills each month for two hours each
Any employees of the State or a political or legal subdivision
who are subject to certification by the Texas Commission on
Fire Protection
Members of an organized police reserve or auxiliary unit
Paid jailers
Parole officers employed by the pardons and paroles division of
the Texas Department of Criminal Justice who perform duties
under Article 42.18, Section 2 and who have the qualifications
under Section 19 of the Code of Criminal Procedure, or in
prior law
Liability Insurance
The Legislature authorized all state agencies owning or operating
motor vehicles, any type of power equipment, aircraft, or watercraft
to provide liability insurance for their officers and employees. If an
agency requires liability insurance but does not provide it, an
employee may be reimbursed from agency maintenance funds for
any amount spent on liability insurance.
Social Security Benefits
State agencies were formerly authorized to pay a portion of
employee contributions on social security coverage of their
employees. However, the 74th Legislature amended the Texas
Government Code to the effect that state employees are required to
pay contributions on wages in the amount of the employee tax
imposed by Section 3101 of the Internal Revenue Code of 1986 (29
U.S.C. Section 3101).
Employees who, on August 31, 1995, had their social security
contributions paid for by the State under the authorization of the
previous law are entitled to benefit replacement pay according to
Section 659.124 of the Texas Government Code.
State Kids Insurance Program (SKIP)
State agencies are required to provide each employee with
information regarding the State Kids Insurance Program (SKIP) and
Medicaid. When offering insurance to employees, agencies must
provide separate literature, including eligibility requirements and
prices, for SKIP and Children's Medicaid. The outreach shall be
performed at least annually during open enrollment (beginning with
the summer of 2001), and with any new state employee at the time of
hiring.
The State Kids Insurance Program (SKIP) introduced September 1,
2000, provides a 30% supplement toward the health insurance
premiums of eligible children of full-time (and higher education)
employees and 15% toward the health insurance premiums of
eligible children of part-time state employees.
The SKIP supplement is available to state and higher education
employees participating in the state insurance program who:
Meet eligibility criteria according to family income and size,
Are not eligible for Medicaid,
Are U.S. citizens or legal residents, and
Have UGIP-eligible children under the age of 19 living with
them in Texas.
A dependent child of a state employee whose family income meets
specified requirements and is not eligible for the state Medicaid
program may have a portion of his or her healthcare premium paid
directly by the State.
Children's Health Insurance Program (CHIP)
CHIP is designed for families who earn too much money to qualify
for Medicaid health care, yet cannot afford to buy private insurance.
The parents in some of these families have jobs that do not offer
health insurance for children. Other parents' jobs offer health
insurance, but the insurance is so expensive that families cannot
afford it
State employees need to be aware of the difference between CHIP
and SKIP. Both programs have been designed for families who earn
too much money to qualify for Medicaid health care. Both programs
have also been designed to meet the needs of children. However,
SKIP is designed for employees covered by the state's insurance
program. CHIP is comparable, but is for children whose parents are
not covered by the state's insurance program.
State Paid Medical Care
In 1959, the Legislature authorized the appropriation of public funds
to pay for drug, medical, hospital, laboratory, and funeral expenses
incurred by state employees injured or killed while performing
assigned governmental functions or when exposed to unavoidable
dangers resulting from the performance of their work. State agencies
may only spend funds for expenses incurred by employees under
their control, but only "to the extent authorized by an appropriation
for the purpose."
Long-Term Care Insurance Program
The Employees Retirement System (ERS) has been authorized to
establish a group long-term care insurance program to provide long-
term care insurance coverage for: an employee, including a retired
employee; a spouse of an employee, including a retired employee; a
parent or grandparent of an employee, including retired employee;
and the parent of a spouse of an employee, including a retired
employee. ERS members and employees of institutions of higher
education are covered under this law.
The program participant is responsible for the required payment. The
premiums and program cost may not be deducted from an employee's
monthly compensation or a retired employee's annuity. This group
long-term care insurance program is not part of the group coverages
offered under the Texas Employees Uniform Group Insurance
Benefits Act, and the State may not contribute any part of the
premiums for coverage offered under this article.
Unemployment Compensation
State employees are covered by unemployment insurance in Texas
unless they are in the employ of a political subdivision, or of an
instrumentality of a political subdivision that is wholly owned by one
or more political subdivisions, as an elected official; a member of a
legislative body; a member of the judiciary; a temporary employee in
case of fire, storm, snow, earthquake, flood, or similar emergency; or
in a position that is designated under law as a major non-tenured
policy-making or advisory position that ordinarily does not require
more than eight hours of service each week.
The State of Texas has elected to reimburse the unemployment
compensation fund administered by the Texas Workforce
Commission (Commission) for benefits paid to former employees
rather than to pay taxes into the fund. Therefore, if a claim is
approved for payment, a state agency will be billed on a quarterly
basis for all benefits based on wages reported by it during the base
period of the claim.
The law provides that an employer respond to the notice of initial
claim within 14 days following the mailing date of the notice. A
failure to do so results in the waiver of all rights in connection with
the claim, including the right to appeal a determination by the
Commission allowing payment of benefits. An employer must file a
timely protest of initial claim in order to protect its status as a party
of interest to the claim.
Benefit Wage Credits: An individual's unemployment benefits are
based on the wages reported to the Commission by employers during
the base period of initial claim. The Commission credits an
individual's wages received during the individual's base period as
benefit wage credits.
Unemployment Eligibility: Individuals who are eligible to receive
unemployment benefits must:
Have registered for work and continue to report to an
unemployment office
Have filed a claim for benefits in accordance with Commission
rules
Be able and available to work
Make an active search for work
Participate in required reemployment activities
Have benefit wage credits in at least two calendar quarters and in
an amount totaling not less than 37 times the weekly benefit
amount to which they are entitled
Have earned wages totaling at least six weeks times their weekly
benefit amount since the beginning date of their most recent
prior benefit year
Have been totally or partially unemployed for a waiting period
of at least seven consecutive days (Benefits will be paid for
this waiting period week after the individual has been paid
three times his weekly benefit amount.)
Disqualification for Benefits: An otherwise eligible individual can
be disqualified from receipt of benefits based upon the reason for the
last separation from work prior to the filing of the initial claim for
benefits. The law provides that an individual be disqualified if the
last work separation was due to a voluntary quit without good cause
connected with the work or if the individual was discharged for
misconduct connected with the work. The disqualification continues
until the individual has returned to employment and worked for six
weeks or has earned six times his weekly benefit amount, unless the
individual quit the last work in order to relocate with a spouse, in
which case the disqualification will be assessed a minimum of six
weeks but can be applied for a maximum of 26 weeks.
An individual will not be disqualified if the individual left the last
work because of:
A medically verified illness of the individual or the individual's
minor child (only if reasonable alternative care was not
available to the child and the employer refused to allow the
individual a reasonable amount of time off during the illness)
Injury
Disability
Pregnancy
Total and Partial Unemployment: An individual is totally
unemployed in a benefit period in which the individual "does not
perform services for wages in excess of the greater of $5 or 25
percent of the benefit amount." Individuals who have any earnings
during the period for which they are filing claims for benefits must
report those earnings to the Commission. Individuals may be eligible
for partial benefits. The amount of benefits payable to a partially
unemployed individual is equal to the individual's benefit amount,
plus the greater of $5 or 25 percent of the benefit amount, minus the
amount of the gross wages earned by the individual during the
benefit period. An individual is not considered unemployed and is
not eligible to receive benefits for any benefit period during which
the individual works the individual's customary full-time hours,
regardless of the amount of wages the individual earns during the
benefit period.
Weekly and Maximum Benefit Amounts: The maximum benefit
amount an eligible individual may be paid during a benefit year may
not exceed 26 times the individual's weekly benefit amount or 27
percent of the total base period wage credits, whichever is less. The
weekly benefit amount is 1/25th of the highest quarter of wages in the
individual's base period or the maximum benefit amount established
for that year, whichever is less. Effective September 1, 2001, the
benefit amount for a totally unemployed individual will not exceed
47.6 percent of the average weekly wage in covered employment in
this State. The minimum weekly benefit amount is 7.6 percent of the
average weekly wage in covered employment in this State. Each
October, these amounts are adjusted annually based on the annual
average of the weekly wage in Texas for the preceding year.
Individuals who have exhausted their regular benefits may apply for
extended benefits provided the State is in an extended benefits
period.
Out-of-State Employment: The Commission is authorized to enter
into agreements with agencies of other states or a federal agency by
which an employee who is performing services in this state and in
any other state(s) is considered to be employed entirely in this state;
in one of the other states in which the individual performs services;
in the state of the individual's residence; or in the state in which the
employing unit maintains a place of business.
Likewise, the Commission may enter into reciprocal agreements with
agencies of other states under which an employee who is employed
by this state and who performs services in another state is considered
to be employed entirely in this state. If no agreement is reached, the
employing agency shall become a reimbursing employer. If the
agency is not permitted by law to be a reimbursing employer, the
agency may pay the required contribution for that employee from
available funds.
Uniform Group Insurance Program
In 1975, the 64th Legislature passed the Texas Employees Uniform
Group Insurance Act, thereby establishing a comprehensive
insurance program whose primary purpose is "to provide uniformity
in life, accident, and health benefits coverages on all employees of
the State of Texas and their dependents."
Except for the conditions explained in Article 3.50-2, Section 13A of
the Texas Insurance Code, no employee eligible to receive the full
state contribution may be denied the basic coverage offered by the
Uniform Group Insurance Program (UGIP), unless the employee
waives the coverage with a written statement. Employees on FMLA
leave are entitled to continue receiving the state contribution to the
UGIP and may keep all the coverages they had while working,
except disability coverages. Employees on FMLA leave are
responsible for paying their out-of-pocket premiums on the first of
each month.
Prior to the 72nd Legislative Session in 1991, all active and retired
state employees were allowed to participate in the UGIP, except for
those working for an institution of higher education. The 72nd
Legislature altered this exception, passing legislation that placed
employees of almost all institutions of higher education under the
auspices of the UGIP. Given the option by the Legislature, Texas
Tech University and the University of Houston System elected to
participate in the UGIP. However, individuals employed by the
University of Texas System and the Texas A&M University System
may not participate in the UGIP. These two institutions of higher
education participate in the Texas State College and University
Employment Uniform Insurance Benefits Program. A person who
has at least eight years of creditable legislative service, or ending
service in the Legislature, or a person who has ten years creditable
service as a legislative employee, or ending service in the
Legislature, continues to be eligible to participate in the UGIP.
An employee or retiree is entitled to secure for his or her dependents
any uniform group coverage provided for employees by UGIP. A
"dependent" is the spouse of an active or retired employee, or an
unmarried child under 25 years of age, including:
An adopted child
A stepchild
A foster child who is not covered under another governmental
health plan
Other child who is in a regular parent-child relationship
A child who is considered a dependent for federal income tax
purposes and who is a child of the employee's or retiree's child
An eligible child for whom the employee or retiree must provide
medical support pursuant to a valid order from a court of
competent jurisdiction
Any such child, regardless of age, who is mentally retarded or
physically incapacitated to such an extent as to be dependent
upon the employee for care or support.
The unmarried dependent child of an employee or retiree, regardless
of age, on expiration of the child's continuation of health benefits
coverage under COBRA, is eligible for reinstatement of health
benefits coverage at a rate sufficient to cover the full cost of the
coverage. The cost of this coverage will be paid by the child or the
child's participating parent.
A surviving dependent of an employee or retiree who is entitled to
monthly benefits may, following the death of the employee, elect to
retain authorized coverages at the group rate for employees, provided
that such coverage was previously secured by the employee or retiree
for the dependent, and the dependent directs the applicable
retirement system to deduct required contributions from the monthly
benefits paid the surviving dependent by the retirement system or
agrees to pay required contributions directly to the Retirement
System.
Section 4 of Article 3.50-2 names the trustee of the UGIP as its
administrator. The trustee is authorized to appoint an advisory
committee as it considers necessary to assist it in performing its
duties.
The trustee is authorized, empowered, and directed to establish plans
of group coverage which may include, but are not limited to, the
following:
Group term life coverage
Accidental death and dismemberment
Health benefit plans, including, but not limited to, hospital care
and benefits
Surgical care and treatment
Medical care and treatment
Dental care
Obstetrical benefits
Prescribed drugs
Medicines
Prosthetic devices and supplemental benefits, supplies, and
services
The UGIP trustee is also authorized to establish a "cafeteria plan" for
state employees. The cafeteria plan that the trustee put into action,
"TexFlex," requires employees to pay UGIP premiums, eligible
health care expenses, and eligible dependent care expenses with pre-
tax, rather than after-tax, dollars.
The state contribution to group insurance for general state employees
for fiscal years 2002 and 2003 is provided in the General
Appropriations Act, Article I, Section 1, Employees Retirement
System (5). The state contributions for the various levels of coverage
are presented in the table below. State agencies and institutions of
higher education are required to make timely payments to the ERS
and reconcile coverages and payments monthly.
If the cost of the basic coverage exceeds the amount of the state's
contribution, the state will deduct from or reduce the monthly
compensation of the employee and deduct from the retirement
benefits of the annuitant an amount sufficient to pay the cost of the
basic coverage. All other UGIP participants will be billed directly by
ERS.
State Contributions to Group Insurance
Maximum Monthly
Level of Coverage State Contribution
Fiscal Year 2002
Employee Only $276.02
Employee and Spouse $433.45
Employee and Children $381.43
Employee and Family $538.86
At the time of publication, figures for FY 2003 were not available.
Workers' Compensation
The Employer Liability Act of 1913 established the Texas Workers'
Compensation System. The intent of the law was to provide quick
and certain relief to injured workers. The program provides both
medical and indemnity payments to eligible state employees.
The State of Texas is self-insured, and the State Office of Risk
Management (SORM) administers the State's workers' compensation
system for most state employees. SORM is the insurance carrier for
all state agencies except the Texas Department of Transportation,
The University of Texas System, and the Texas A&M University
System. The director of SORM represents the State in workers'
compensation matters, may make procedural rules, and may
prescribe forms necessary for the effective administration of the
program.
Employees covered by workers' compensation insurance coverage or
their legal beneficiaries have the exclusive remedy of recovering
Workers' Compensation benefits against the employer, their agents,
or an employee of the employer. To receive Workers' Compensation
payments, a state employee must suffer a compensable injury in the
course of employment. In Section 401.011 of the Texas Labor Code,
an injury is defined as "damage or harm to the physical structure of
the body and a disease or infection naturally resulting from the
damage or harm." An occupational disease is considered an injury.
Medical Benefits: An injured employee is entitled to "all health care
reasonably required by the nature of the injury as and when needed."
Such health care includes cures or relief from the effects of the
injury, aiding recovery, or enhancing the ability of the employee to
return or retain his or her employment.
The injured worker is entitled to his or her choice of treating doctor
who must be one of the doctors listed on the Texas Workers'
Compensation Commission's (TWCC) approved doctors list. The
injured worker may change his or her treating doctor but may require
prior approval of TWCC or the regional health care network, if
applicable. Employees may be required to submit to a medical
examination to resolve any questions about the appropriateness of
health care received by the injured worker, the impairment caused by
the compensable injury, the attainment of maximum medical
improvement (MMI), or similar issues. The TWCC chooses a doctor
from a pre-approved list. At the request of their insurance carriers,
injured employees may have a doctor of their choice present at an
examination that is ordered by the TWCC. The insurance carrier is
required to pay the fee for the doctor chosen by the employee.
Income Benefits: In addition to medical services payments, state
employees are eligible to receive income benefits for time lost from
employment for an injury that results in disability for at least one
week. If the disability continues for longer than one week, income
benefits begin to accrue on the eighth day after the disability begins.
An employee's entitlement to income benefits ends with the death of
the employee and eligibility for temporary income, impairment
income, and supplemental income benefits terminates on the
expiration of 401 weeks after the date of injury.
An employee may elect to use accrued sick leave before receiving
income benefits. If an employee elects to use sick leave, the
employee is not entitled to income benefits until the employee has
exhausted the employee's accrued sick leave. An employee may also
elect to use all or any number of weeks of accrued annual leave after
the employee's accrued sick leave is exhausted. If an employee elects
to use annual leave, the employee is not entitled to income benefits
until the elected number of weeks of leave have been exhausted. The
employee may elect not to use sick leave or vacation leave. Once the
election has been made, the employee cannot change his or her
election.
Employees who are receiving temporary disability payments or
workers' compensation benefits may use their paid vacation leave.
State agencies may not require employees to exhaust their
compensatory leave 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.
Employees of the Texas Department of Transportation may elect to
use accrued sick leave before receiving income benefits. If an
employee elects to use sick leave, the employee is not entitled to
income benefits until the employee has exhausted the employee's
accrued sick leave. An employee may elect to use all or any number
of weeks of accrued annual leave after the employee's accrued sick
leave is exhausted. If an employee elects to use annual leave, the
employee is not entitled to income benefits until the elected number
of weeks of leave have been exhausted.
There are four categories of income benefits: temporary, impairment,
supplemental, and lifetime. A brief description of each follows.
Temporary benefits continue until a worker has reached maximum
medical improvement (MMI). MMI is reached when certified by a
doctor or after 104 weeks after temporary benefits begin to accrue,
whichever occurs first. These benefits are paid at 70 percent of the
difference between the worker's average pre-injury weekly wage and
the worker's post-injury weekly earnings, not to exceed 100 percent
of the state average weekly wage rounded to the nearest whole
dollar. For workers who earn less than $8.50 an hour, benefits for the
first 26 weeks are paid at 75 percent of the difference between the
worker's average pre-injury wage and the workers post-injury
earnings.
Impairment benefits begin the day after a worker has reached his or
her MMI point and end either on the date of expiration computed at a
rate of three weeks for each percentage point of impairment, or on
the date of the employee's death, whichever comes first. A worker
who remains impaired by an injury after he or she has reached MMI
will be eligible for impairment benefits. If the diagnosis is disputed
and the parties cannot agree on a doctor to determine whether a
worker has reached MMI, the TWCC will assign a doctor.
The certifying doctor assigns a rating to the worker's impairment
using the American Medical Association's Guides to the Evaluation
of Permanent Impairment. The rating determines the number of
weeks that impairment benefits will be paid. If the impairment rating
is disputed, a doctor chosen by the agreement of both parties or, if
the parties cannot agree, a doctor appointed by the TWCC will assign
a rating. Impairment income benefits are paid at 70 percent of the
worker's average pre-injury weekly wage, not to exceed 70 percent
of the state average weekly wage rounded to the nearest whole
dollar.
Supplemental benefits are paid when a worker's impairment
benefits expire if the worker has an impairment rating of 15 percent
or more; has not returned to work at all or returns to work earning
less than 80 percent of his or her average pre-injury weekly wage;
has not decided to commute part of his or her impairment income
benefit; and has made a good-faith effort to seek employment
according to his or her ability to work. Eligible employees may be
paid supplemental benefits not to exceed 70 percent of the state
weekly wage rounded to the nearest whole dollar. Benefits for a
week are equal to 80 percent of the amount calculated by subtracting
a worker's weekly wage earned during the reporting period from 80
percent of the worker's average weekly wage.
Lifetime benefits are paid for specific serious injuries until the death
of the employee. Employees may be paid at 75 percent of the
worker's average pre-injury weekly wage, not to exceed 100 percent
of the state average weekly wage rounded to the nearest whole
dollar, for the following injuries:
Total and permanent loss of sight in both eyes
Loss of both feet at or above the ankle
Loss of both hands at or above the wrist
Loss of one foot at or above the ankle and the loss of one hand at
or above the wrist
An injury to the spine that results in permanent and complete
paralysis of both arms, both legs, or one arm and one leg
An injury to the skull resulting in incurable insanity or imbecility
Third degree burns over at least 40 percent of the body
Third degree burns covering the majority of either both hands or
one hand and the face.
Death and Burial Benefits: Death and burial benefits are paid to the
beneficiaries of a deceased employee if the employee dies from a
compensable injury. The beneficiaries of the employee are entitled to
75 percent of the employee's average weekly salary not to exceed
100 percent of the state average weekly wage rounded to the nearest
whole dollar. Beneficiaries may include eligible spouses, children,
grandchildren, or dependents.
Weekly payments to an employee's eligible spouse continue until the
spouse dies or remarries. If the spouse remarries, he or she may
receive 104 weeks of death benefits, commuted according to TWCC
rules. Weekly payments to an employee's dependent child continue
until the child reaches age 18. If the child is enrolled as a full-time
student at an accredited educational institution, then weekly
payments may continue until the child reaches age 25, until the date
the child is no longer enrolled as a full-time student for the second
semester in a row, or until the child dies, whichever is first. A child
who is an employee's dependent at the time the employee dies is
entitled to receive benefits until the date the child dies, the date the
child no longer has a disability, or, if the child does not have a
disability, after 364 weeks of death benefit payments, whichever is
first. All other beneficiaries are entitled to 364 weeks of payments or
payments until the date they die. Burial benefits include the actual
costs incurred for reasonable burial expenses or $6,000.
Notification and Claim Requirements: An employee, or a person
acting on his or her behalf, must notify the employer of an injury
within 30 days after the incident occurred or after the employee knew
or should have known that the injury may be related to his or her
employment. Failure to file notice relieves the employer and its
insurance carrier of liability unless the employer has actual
knowledge of the injury; the TWCC determines that good cause
exists for failure to provide notice; or the employer or their insurance
carrier does not contest the claim.
Claims for compensation must be filed with the TWCC within one
year of when the injury occurred or, if the injury is an occupational
disease, when the employee knew or should have known the disease
was work-related. Failure to file a claim for compensation with the
TWCC relieves the employer and its insurance carrier of liability
unless good cause exists for failure to file a claim or the employer or
its insurance carrier does not contest the claim.
Claims for death benefits must be filed with the TWCC within one
year of the employee's death. Failure to file bars the claim unless the
person is a minor or incompetent or good cause exists for the failure
to file a claim. "A separate claim must be filed for each legal
beneficiary unless the claim expressly includes or is made on behalf
of another person."
Out-of-State Assignments or Positions: Workers' compensation
coverage extends to state employees regularly assigned to positions
outside the State of Texas. The Texas Labor Code provision states:
An employee who performs services
outside the state is entitled to benefits
under this [workers' compensation] chapter
even if the person is hired or not hired in
this state; does not work in this state; works
both in this state and out of state; is injured
outside this state, or has been outside this
state for more than one year. An employee
who elects to pursue remedies provided by
the state where the injury occurred is not
entitled to benefits.
Emergency Leave and Workers' Compensation: In accordance
with the current General Appropriations Act, the administrative
head(s) of an agency, department, or institution may authorize
emergency leave with pay to an employee receiving workers'
compensation benefits. The emergency leave payments may not
exceed an amount equal to the difference between the basic monthly
wage of the employee and the amount of income benefits the
employee received for the month. The emergency leave payments
may not extend for more than six months from the date when
payment began.
Leave Accumulation and Workers' Compensation: The State
Auditor's Office has ruled that state employees who are exhausting
their leave as a result of a workers' compensation claim are
prohibited from using sick and annual leave hours that accrue after
the first day of the month in which the employee becomes
incapacitated unless the employee physically returns to work.
Reporting Requirements: At the close of each calendar quarter, the
State Office of Risk Management shall prepare a statement reflecting
the amount of workers' compensation benefits paid to, or on behalf
of, former and current state employees and present it to the
Comptroller.
DEFERRED COMPENSATION
Texas state agencies are permitted to offer a deferred compensation
program in addition to an established retirement, pension, or benefit
system. Employees who participate in a deferred compensation plan
may voluntarily defer part of their compensation for investment in a
qualified investment product. The plan administrator must approve
an investment product before it can be classified as qualified.
Deferred compensation plans must provide that employees do not
have to pay federal income tax on deferred amounts and investment
income until those amounts are distributed to the employee.
There are two major types of deferred compensation plans described
in the Texas Government Code. A 401(k) Plan is governed by
Section 401(k) of the Internal Revenue Code of 1986. Likewise, the
457 Plan is governed by Section 457 of the Internal Revenue Code of
1986. The Board of Trustees of the Employees Retirement System of
Texas (ERS) is the plan administrator for both the 401(k) Plan and an
established 457 Plan. These plans are referred to collectively as
Texa$aver.
Under a 401(k) Plan, the State may contract with any employee to
defer any portion, up to 25 percent or $10,500* , whichever is less, of
the employee's eligible compensation. Under the 401(k) Plan,
contributions are made on a tax-deferred basis. Some differences
found in the 401(k) Plan include the option to borrow against
deferred compensation funds and to roll over these funds into an
Individual Retirement Account. Also, purchasing a primary residence
and some educational costs are included in the definition for
financial hardship withdrawals under the 401(k) Plan, unlike the 457
Plan.
The 457 Plan allows employees to invest with a variety of vendors.
The State may contract with any employee to defer any portion, up to
25 percent or $8,500, whichever is less, of the employee's eligible
compensation.
RETIREMENT
There are several retirement systems that include state employees.
The brief description that follows is limited to the Employees
Retirement System (ERS) because it includes the largest number of
state employees.
Membership
As a condition of employment, all employees and appointed officers
of every department, commission, board, agency, or institution of the
State become members of the employee class of ERS and begin to
earn monthly service credits on the first day of employment. Persons
whose employment is covered by the Teacher Retirement System or
the Judicial Retirement System (Plan I or II), or who are independent
contractors or employees of such contractors, are not eligible for
participation. Elected officials that are not part of the Teacher
Retirement System or the Judicial Retirement System (Plan I or II)
may participate in ERS if they desire, but they will be members of
the elected class rather than the employee class of the system.
Temporary employees age 65 years or older, who are not current
members of ERS, may elect not to join the system for the first six
months of employment. However, membership is mandatory when
the employment continues into the seventh month.
Contributions
Employee Contributions: The Texas Constitution requires that
those employees participating in the ERS contribute at least 6 percent
of their current compensation into the system. Currently, employees
who are members of ERS, but who are not members of the
Legislature, contribute 6 percent of their compensation to the
retirement fund. Employees who are members of the Legislature
must contribute 8 percent of their compensation to ERS. The agency
where the ERS-covered employee works will deduct, in each payroll
period, the amount of contribution the employee owes The deduction
process requires no employee consent, as the employee consents to
the automatic deduction when he or she becomes a member of ERS.
Each employee who is a member of ERS is required to pay an annual
membership fee of $2. However, the fee may be waived if the
Legislature appropriates funds sufficient to pay the membership fees.
In 2001, the 77th Legislature continued the long-standing tradition
(begun in 1973) of appropriating funds to pay the membership fee.
State Contributions: The amount contributed by the State may not
be less than 6 percent or more than 10 percent of the aggregate
compensation paid to individuals participating in ERS. According to
the General Appropriations Act, Article I, Section 1, Employees
Retirement System (4), the State currently contributes an amount
equal to 6 percent of the total compensation of all members of the
retirement system for that year. In an emergency, as determined by
the Governor, the Constitution allows the Legislature to appropriate
such additional funds as are actuarially determined to be required to
fund benefits authorized by law.
Withdrawal of Contributions: For employee class members of
ERS, a member may receive a refund of his or her contributions to
the retirement fund if the member is not currently employed in a
position in the employee class, does not assume or resume a position
in the employee class during the 30 days after the day on which the
member terminates employment, and files an application for
withdrawal.
Withdrawal of contributions cancels a person's membership in the
retirement system, the person's service credit, and all rights to
benefits from each class from which a withdrawal is made.
The amount a member withdraws is based on his or her accumulated
monthly contributions, any contributions made to establish or
reestablish service credit, and interest on the accumulated amount.
Interest is earned monthly at the rate of 5 percent a year on the mean
balance of the member's account for the fiscal year. The refunded
amount does not include any membership fees or interest the person
may have paid to establish or reestablish service credit.
Purchase of Service Credit
Types of Service Credit That May Be Purchased: In addition to
the service credit earned for each month as a contributing member of
ERS, there are three types of service credit that may be purchased by
eligible employee class members.
Service credits previously canceled by a member withdrawing the
member's accumulated contributions from the system (also known as
refunded service credit) may be purchased by depositing with ERS
the amount withdrawn, plus interest computed on the basis of the
state fiscal year at an annual rate of 5 percent from the date of
withdrawal to the date of deposit.
A person may reestablish service credit previously canceled in the
retirement system if the person is a member of the employee class
and at least six months have elapsed since the end of the month in
which the cancellation became effective; or the person is a former
member of the employee class and a participant in the optional
retirement program.
One month's service credit may be purchased for each month or
fraction of a month of military service, defined as active federal duty
as a member of the U.S. Armed Forces, up to a maximum of 60
months. To be eligible to purchase military service credit, a person
must not be eligible for a federal retirement benefit based on 20 years
or more of active federal military duty or its equivalent and must
have received a discharge that was not dishonorable. Military service
credit may be purchased anytime after a person becomes a member.
Military service may be purchased by depositing with ERS an
amount composed of contributions plus 10 percent interest for each
fiscal year from the date first eligible to purchase the service. No
penalty interest is charged if military service is purchased during the
first year of eligibility following active military duty. Military
service is used in computing occupational disability benefits and in
determining eligibility for the selection of a death benefit plan.
Military service credit may be used in computing service retirement
and non-occupational disability after a member has at least five years
of non-military service credit.
Employees may also purchase service credit not previously
established. This includes service during times when a waiting period
for system membership was in effect (September 13, 1947, to August
31, 1973) and other service for which no contribution was made.
This service may be purchased by depositing with the ERS an
amount comprised of contributions plus 10 percent interest for each
fiscal year from the date of first eligibility to purchase the service.
Eligible members may establish not more than 60 months of
equivalent membership service credit, including law enforcement or
custodial officer service, in either the elected class or the employee
class. A member is eligible to establish this service credit if the
member has at least 120 months of actual membership service of the
type of service that the member seeks to establish. A member may
establish this service credit by depositing with the retirement system,
for each month of service credit, the actuarial present value, at the
time of deposit, of the additional standard retirement annuity benefits
that would be attributable to the purchase of this service credit, based
on rates and tables recommended by the retirement system's actuary
and adopted by the board of trustees. After a member makes these
deposits, the retirement system shall grant the member one month of
equivalent membership service credit for each month of credit
approved.
Methods for Purchasing Service Credit: Members may purchase
service credit for which they are eligible by making a lump-sum
payment to the ERS for the entire period of service, or through
alternative methods. A minimum of one month service credit may be
purchased through a lump-sum payment.
Eligible members may also purchase service credit through monthly
payroll deductions. Payroll deductions to purchase service credit are
subject to the rules of the ERS.
Annual Leave Counted as Service Credit
At the employee's option, he or she may count their annual leave that
has accumulated and is unused on the last day of employment as
service credit when they retire, in addition to receiving it as a lump-
sum payment. Annual leave is creditable in the retirement system at
the rate of one month of service credit for each 20 days, or 160
hours, or fraction thereof of accumulated annual leave.
Sick Leave Retirement Credit
A member who retires based on service or a disability is entitled to
service credit in ERS for the member's sick leave that has
accumulated and is unused on the last day of employment. An
employee is entitled to credit for accrued sick leave only when
employed during the month that includes the effective date of the
member's retirement. Sick leave is creditable in ERS at the rate of
one month of service credit for each 20 days, or 160 hours, or
fraction thereof, of accumulated unused sick leave. A member may
use accumulated sick leave to satisfy service requirements for
retirement as well as to increase the value of his or her annuity.
Retiring employees may donate all or part of their sick leave balance
to the agency's sick leave pool before the agency certifies any
remaining hours to be used for service credit. The statutes contain no
provision that allow a retiring employee to store or bank accumulated
sick leave for use after retirement if they return to work with the
State.
Retirement Eligibility
An ERS member in the employee class who has service credit in the
system, whether or not employed at the time of his or her birthday, is
eligible to retire and receive a service retirement annuity if:
The member is at least 60 years old and has five years of service
credit in the employee class (the employee must have ten years
service credit to be eligible for group health insurance); or
The sum of the member's age and amount of service credit in the
employee class, including months of age and credit, equals 80
and the member has at least five years of service credit in the
employee class.
For the sole purpose of determining eligibility to receive a
service retirement annuity, ERS shall consider service
performed as a participant in the optional retirement program
under Texas Government Code Chapter 830 as if it were
service for which credit is established in ERS.
For the sole purpose of determining eligibility to receive a
service retirement annuity, ERS shall consider not more than
60 months, or portions of months, of service performed for a
Texas governmental employer by a member who has at least
five years of service credit, excluding military service, in the
employee class as if it were service for which credit is
established in ERS.
The eligibility requirements of the elected class of the ERS are
different. In the case of elected members, these individuals are
eligible to retire and receive a service retirement annuity if the
member:
Is at least 60 years old and has eight years of service credit in
that class; or
Is at least 50 years old and has 12 years of service credit in that
class.
A member is eligible to retire and receive a service retirement
annuity if he or she is at least 55 years old and has at least ten years
of CPO/CUS service credit as one of the following:
A commissioned peace officer engaged in criminal law
enforcement activities of the Department of Public Safety, the
Texas Alcoholic Beverage Commission, the State Board of
Pharmacy, or the Parks and Wildlife Department
An employee of the Railroad Commission of Texas who is
licensed by the Commission on Law Enforcement Officer
Standards and Education and who has served at least five years
as an investigator for the oil field theft detection division
A parole officer or caseworker for the Board of Pardons and
Paroles or Texas Department of Criminal Justice
As a custodial officer
An ERS member who has at least 20 years of service credit as a law
enforcement or custodial officer is eligible to retire, regardless of
age, and receive a standard service retirement. However, a law
enforcement or custodial officer who retires before attaining the age
of 50 receives an actuarial reduction from the annuity that would
have been available at age 50. The rule of 80 also applies to members
with CPO/CUS service credit.
A member of both the Employees Retirement System and the
Teacher Retirement System who applies for service or disability
retirement from either system may transfer to that system service
credit established in the other system if the member has at least three
years of service credit in the system from which the member is
retiring. A member of both systems with less than three years of
service credit in the current system and at least three years in the
other system may, at the time the person applies for service or
disability retirement from the other system, transfer service credit to
that system from the system in which the person most recently
received service credit.
Disability Retirement
A retirement system member who has service credit in either
membership class is eligible to retire under an occupational
disability, regardless of age or amount of service credit.
A system member who is also a member of the Texas National
Guard or Texas State Guard is eligible for retirement for an
occupational disability if the person is injured while on active duty
with the national or state guard, is discharged from that entity
because of the injury, and ceases state employment.
In the case of a non-occupational disability, a member is eligible to
retire if that person has at least one of the following:
Eight years of membership service credit in the elected class of
membership
Six years of membership service credit in the elected class plus
two years of military service credit established before January
1, 1978
Ten years of membership service credit in the employee class of
membership
Except for certain peace officers and custodial officers, a standard
disability retirement annuity for service credited in the employee
class of membership is an amount computed at the rate of 2.3 percent
for each year of service credit in that class times the member's
average monthly compensation.
In the case of either an occupational or a non-occupational disability,
the standard disability retirement annuity may not be less than 35
percent of the average monthly compensation, or $150 per month,
whichever is greater. For both types of disabilities, the annuity may
not exceed 100 percent of the applicable rate of compensation.
Disability benefits for certified peace officers and custodial officers
are based on a benefit multiplier of 0.5 percent higher than the
regular service retirement package. The annuity may not be less than
50 percent of the average monthly compensation. If a certified peace
officer or eligible corrections officer is occupationally disabled so
that the person is considered totally disabled under the federal social
security laws, ERS shall increase the person's occupational disability
retirement annuity to 100 percent of the person's monthly
compensation at the time the disabling event occurred.
Retirement Benefits
The standard service retirement annuity for service credited in the
employee class of membership (in ERS) is an amount computed as
the member's average monthly compensation for service in that class
for the 36 highest months of compensation multiplied by 2.3 percent
for each year of service in that class.
The standard service retirement annuity for service credited in the
employee class may not be less than $150 a month or more than 100
percent of the average monthly compensation computed as described
above.
ERS members who have at least 20 years of service credit as law
enforcement or custodial officers receive benefit rates that are based
on the employees' average salary for the 36 highest months of
compensation, multiplied by the sum of the percentage factor for
standard service retirement plus 0.5 percent for each year of service
in a qualified position.
For a member of the elected class of ERS, the standard service
retirement annuity is an amount equal to 2 percent for each year of
service credit in that class, multiplied by the current state salary
being paid a district judge. In addition, the provision states that the
annuity may not exceed, at any time, 100 percent of the current state
salary being paid a district judge.
A retiree may irrevocably waive all or a portion of any benefit from
the retirement system to which he or she is entitled; this is in order to
allow retirees the ability to receive other services such as Medicaid.
ERS can pay an alternate payee (spouse) of a current retirement
system member who meets certain conditions a monthly annuity
from the member's retirement account. The payee must choose to
receive the payment in lieu of the payee's interest in that account
awarded by a qualified domestic relations order. The member must
be an active employee who is eligible to retire, but who has not yet
retired. Upon retirement, the member's retirement benefit is reduced
by the amount awarded to the alternate payee.
Proportionate Service Retirement Program Benefits
The purpose of this program is to provide proportionate benefits to
qualified members who have service credit in more than one
retirement system (employees have service credit only if they have
not received a refund of their contributions). It is contrary to the
purpose of the program for a person or class of persons to receive,
because of service in more than one retirement system,
proportionately greater benefits from a particular system than a
person only under one system. The statewide retirement systems
required to participate in the program are the Employees Retirement
System of Texas, the Teacher Retirement System of Texas, and the
Judicial Retirement System of Texas Plan I and II. A subdivision
participating in the Texas County and District Retirement System, a
municipality participating in the Texas Municipal Retirement
System, or municipal employees participating in a retirement system
for general municipal employees in a municipality with a population
between 460,000 and 500,000 can elect to join the proportionate
retirement program.
The law allows an eligible employee to accrue "split service"
retirement benefits in more than one of the retirement systems. A
person who has membership in two or more statewide retirement
systems is subject to the laws governing each of those systems for
determining the person's eligibility for service retirement benefits
from each system. However, for the purpose of determining whether
a person meets the length-of-service requirements for service
retirement in a system, the person's combined service credit must be
considered as if it were all credited in each system. Each retirement
system will pay benefits based only upon the service and salaries
established in that system. A retired employee receives an annuity
from each of the systems where he or she has retired. A person's
combined credit service is usable only in determining eligibility for
service retirement benefits and may not be used in determining the
eligibility for disability retirement benefits, death benefits, or any
type of benefit other than service retirement benefits.
The proportionate retirement program allows employees with service
in two or more participating systems to obtain retirement benefits
while preserving the integrity of each retirement fund. The following
example illustrates how the proportionate service benefit works: A
person served as an employee of an eligible municipality for three
years, and, on leaving employment, chose not to receive a refund of
retirement contributions, thereby retaining service credit in the
municipality's retirement plan. The person then worked for the State
for three years. On attainment of retirement age, without the
proportionate service retirement benefits program, the person would
not have had the five years of service credit needed to retire from
either system. However, the proportionate retirement program allows
the person to combine service under two retirement systems for a
total of six years' service, three under each system. Benefits are paid
proportionately from each system.
A person who is a member of a retirement system participating in the
proportionate program may reestablish service credit, including
service credit if applicable, previously canceled in another system
that is participating in the proportionate program if the person:
1. Is not a current member of the system under which service was
performed
2. In the case of the Texas County and District System, does not
have an open account for which the person performed the
service for which credit is sought.
If membership in the Employees Retirement System or the Teacher
Retirement System was terminated after August 31, 1993, it may be
reinstated and other service purchased only by a member of the
system in which the service is creditable who meets the general
requirements for reinstatement or purchase of service credit in that
system.
Service credit may not be reestablished in a subdivision participating
in the Texas County District Retirement System or a municipality
participating in Texas Municipal Retirement System if the person
who seeks to the credit is a member only of a retirement system that
subdivision or municipality excludes from participation in the
retirement program under Texas Government Code Section 803.103.
Resumption of State Service by a Retiree
The retirement system will no longer suspend annuity payments to
retirees who resume state service in the employee class if the retiree
holds a position included in that class for more than nine months in
any one fiscal year.
In the case of an individual who is a member of the elected class of
ERS, the retirement system will suspend annuity payments when the
person takes the oath for a position included in the elected class and
will continue to withhold annuity payments until that person no
longer holds the elected position.
Before the retiree begins work in a position included in the employee
class of membership, the retiree and the employing agency must
notify the retirement system in writing of the retiree's name, his or
her date of employment, and the projected dates of service. Similarly,
a retiree from the elected class of membership must notify the
retirement system of resumption of state office and the projected
dates of service before the retiree takes the oath of office.
If an employee takes a position in a class of membership other than
that from which the person retired or the retiree is serving the State
as an independent contractor, that person may continue to receive
retirement benefits.
With the exception of a person who is retired from the elected class
of ERS and who again holds a position in that class, a retiree may not
rejoin ERS as a member of the class from which the person retired. A
retiree taking a state position not included in the membership class
from which the retiree receives retirement benefit payments:
Is required to become or remain a member if the position is
included in the employee class
May elect to become or remain a member if the position is
included in the elected class
Optional Service Retirement Benefits
Retiring members of the Employees Retirement System may elect to
receive an optional retirement annuity in the place of the standard
retirement annuity. The member may select any optional retirement
annuity approved by the board of trustees or may select one of the
following payment options:
After the retiree's death, a reduced annuity is payable in the same
amount throughout the life of the person designated by the
retiree at retirement.
After the retiree's death, three-fourths of the reduced annuity is
payable throughout the life of the person designated by the
retiree before retirement.
After the retiree's death, one-half of the reduced annuity is
payable throughout the life of the person designated by the
retiree before retirement.
If the retiree dies before 60 monthly annuity payments have been
made, the remainder of the 60 payments are payable to one or
more designees or, if one does not exist, to the retiree's estate.
If the retiree dies before 120 monthly payments have been made,
the remainder of the 120 payments are payable to one or more
designees or, if one does not exist, to the retiree's estate.
At the time of retirement, the retiree may choose to take a partial
lump sum of up to 36 months of his or her standard annuity.
The employee's monthly annuity would then be recalculated
using an actuarial reduction factor. This lump-sum option is
effective January 1, 2000. Members retiring under the
proportionate retirement program provided by Texas
Government Code Chapter 803 are not eligible for this lump-
sum option.
A member who selects an optional retirement annuity must designate
a person to receive the annuity on the death of the member before the
selection becomes effective. If the designated person predeceases the
retiree, the reduced annuity will be increased to the standard service
retirement annuity. The standard service retirement annuity will be
adjusted for early retirement and post-retirement benefit increases
authorized by law. The increase in the annuity begins the month after
the designee dies and is payable to the retiree for the remainder of the
retiree's life.
A retiree may change from an optional annuity selection to a
standard retirement annuity by filing a request with the retirement
system if the designated beneficiary was not at the time of
designation and is not currently the retiree's spouse or child, or has
executed since the designation a transfer and release, approved by a
court of competent jurisdiction in a divorce decree, of the
beneficiary's interest in the annuity and is not currently the retiree's
spouse or child. If such a change is made, the retirement system will
recompute the annuity as a standard service retirement annuity, and
payment will be adjusted for the first monthly payment following the
filing of the request to change.
Death Benefits
A member who has at least 10 years of service credit in the
elected or employee class of membership may select a death
benefit plan for the payment, if the member dies while the
member is eligible to select a plan, of a death benefit annuity to a
person designated by the member. A death benefit designee of an
ERS member who dies is entitled to service credit in the retirement
system for the member's sick leave that has accumulated and is
unused on the member's date of death. Annual leave may be applied
in a similar manner. For making a death benefit selection, a
designation of a former spouse as beneficiary is invalid unless the
designation is made after the date of the divorce.
If a member who is eligible to choose a death benefit plan dies
without having made a selection, or if a selection cannot be made
effective, the member's designated beneficiary or the personal
representative of the member's estate, (provided there is no
designated beneficiary), may select an annuity plan. In lieu of
selecting a death benefit plan, the beneficiary or the member's
representative may elect to receive a refund of contributions. A death
benefit designee may use the deceased member's sick leave credit to
qualify for making a death benefit plan selection. A death benefit
designee may use the deceased member's annual leave credit to
qualify for making a death benefit plan selection.
If a contributing member dies who, at the time of death, was eligible
for retirement by age and length of service, but was not eligible to
select a death benefit, an annuity is payable only to a designated
beneficiary or to a guardian of minor children (when there is no
designated beneficiary). In the event there is no surviving spouse or
minor children, the estate may only receive a refund of the
accumulated contributions. The spouse or guardian, as the case may
be, may select a refund of the accumulated contributions in lieu of a
benefit payment.
In the event a member is not eligible for retirement or eligible to
select a death benefit plan, the accumulated employee contributions
(plus accrued interest) are refunded to the member's designated
beneficiary or the member's estate (provided the member does not
designate a beneficiary or the beneficiary does not survive the
member). If a contributing member dies who, at the time of death,
was not eligible to select a death benefit and who was:
actively employed by the State;
receiving Workers' Compensation benefits for an injury
sustained while employed by the state; or
on authorized sick leave,
then a lump-sum death benefit is payable to the employee's
designated beneficiary or to the member's estate. The lump-sum
death benefit, which is a sum provided in addition to the refunded,
accumulated employee contribution, is an amount computed at the
rate of 5 percent of the amount in the member's individual account at
the time of death times the number of full years of service credit the
member had at the time of death. However, the lump-sum death
benefit may not exceed 100 percent of the amount in the member's
individual account. The lump-sum death benefit may not be paid to a
member who, at the time of death, had a death benefit annuity that
became effective.
In the event of an occupational death, an amount equal to one year's
salary is paid to the surviving spouse or the guardian of dependent
minor children in addition to the death benefits provided above. A
1978 Attorney General Opinion held that "payments made by the
Retirement System for the benefit of a minor child may be made to
the parent under Section 12.04 (4) and (8) of the Family Code."
Supplemental death benefits are payable upon the death of an
employee with 20 or more years of service as a state commissioned
peace officer or custodial officer.
ERS retirees who selected an optional retirement annuity plan may
now change the beneficiary designated at the time of retirement after
annuity payments have begun. If the beneficiary designated at the
time of retirement is the spouse or former spouse of the retiree, the
spouse or former spouse must give written, notarized consent to the
change, or a court with jurisdiction over the marriage must have
ordered the change.
The beneficiary is entitled on the retiree's death to receive
monthly payments of the survivor's portion of the retiree's
optional retirement annuity for the shorter of the remainder of
the life expectancy of the beneficiary designated as of the
effective date of the retiree's retirement; or the remainder of
the new beneficiary's life.
A retiree may not change a beneficiary after retirement if the
retiree has previously changed after retirement a beneficiary
for optional retirement annuity payments.
OTHER BENEFITS
Awards and Gifts
State agencies are authorized to purchase and present to their
employees or officers service awards, safety awards, and other
similar awards for professional achievement or other outstanding
service. The awards must be purchased at a cost not to exceed $50
per employee.
Awards and gifts may also be purchased for volunteers. The award
must be given in recognition of a volunteer's special achievement and
outstanding service and only if the agency has established a
volunteer program that complies with Chapter 2109 of the Texas
Government Code. The awards for volunteers, like those for
employees, cannot exceed $50 and are limited to engraved
certificates, plaques, pins, and other similar awards.
The Attorney General ruled that savings bonds with a maturity value
of more than $50 may be given as a gift by a state agency as long as
the purchase price is $50 or less.
Child Care Services
In an attempt to encourage state agencies to attend to their
employees' family needs, the 70th Legislature passed legislation in
1987 that empowered the Building and Procurement Commission to
allocate leasable state office building space for the provision of child
care by private vendors at the direction of the Child Care
Development Commission.
The Child Care Development Commission (Commission),
established in 1989, is responsible for developing and administering
a program to provide child care services for state employees, and, by
rule, the Commission may establish the methods with which to
administer and supervise such a program. The Commission or the
Commission's designee submits a report to the Legislature at each
legislative session that summarizes the development and progress of
the child care services program and describes additional child care
services needed by state employees.
The Child Care Advisory Committee, which is a body appointed by
the Commission, shall advise the Commission on the location, size,
and design of the child care facilities and the curriculum a child care
facility must provide to ensure the provision of high quality
developmentally appropriate services. The Child Care Development
Commission will provide the Building and Procurement Commission
with specifications for each child care facility site that include the
location, size, and design of the facility. With this information and
the continuing direction of the Commission, the Commission shall
make any contract necessary to establish a child care facility
consistent with the State Purchasing and General Services Act, Texas
Government Code, Section 2151.001 et seq.
Uniform Cleaning Allowance
A cleaning allowance is an allotment to help defray the cost of
maintaining a uniform for certain state employees. A cleaning
allowance is authorized for specific positions and does not transfer
with an employee if that employee transfers to a position for which
such reimbursement is not authorized. Cleaning and clothing
allowances shall not be considered compensation for purposes of
retirement contribution determination.
Clothing Allowance
Clothing allowances are authorized for certain commissioned officers
assigned to the Alcoholic Beverage Commission and the Department
of Public Safety and certain uniformed personnel in the Texas Parks
and Wildlife Department.
Employee Health Fitness and Education
The State Employees Health Fitness and Education Act of 1983 was
enacted to encourage and create a condition of health fitness in state
administrators and employees. Any agency or department may use
available public funds and facilities for health fitness education and
activities and other related costs. Each agency must first submit a
plan covering the participants, purpose, nature, duration, costs, and
expected results of such a program. The Act was amended in 1989 to
require that all health fitness plans be approved in writing by the
Texas Department of Health before implementation. If
implementation of a plan requires the expenditure of public funds,
written approval must also be obtained from the Governor or the
designated representative of the Governor.
Employee Meal Authorization
State agencies providing institution-based services, including the
Texas Department of Criminal Justice, the Texas Department of
Mental Health and Mental Retardation, the Texas Youth
Commission, the Texas School for the Blind and Visually Impaired,
and the Texas School for the Deaf, may provide meals to employees
working in institutional settings and may charge a fee at costs
established by the agencies that does not exceed the direct and
indirect costs of preparation.
Employee Assistance Programs (EAP)
An Employee Assistance Program (EAP) offers assistance in the
identification and resolution of productivity problems associated
with employees impaired by personal concerns including, but not
limited to, health, marital, family, financial, alcohol, drug, legal,
emotional, and stress which may adversely affect employee job
performance. The Texas State Human Resources Association
(TSHRA) has developed a guide for implementing an EAP in state
agencies. State agencies may elect to establish or participate in an
EAP for their employees. Agencies must meet the same requirements
as specified in the Employee Health Fitness and Education section,
above.
Tuition Assistance
Eligible members of the State's military forces, (Texas Army
National Guard, Texas Air National Guard, or Texas State Guard)
are authorized tuition assistance for any undergraduate or graduate
course at an institution of higher education or private or independent
institution of higher education, including a vocational or technical
course. In an effort to encourage voluntary membership, to improve
the education level of its members, to diversify the composition of
the forces, and to enhance the State's workforce, the Adjutant
General may award tuition assistance as necessary to meet the
recruitment and retention needs of the State's military forces. A
person may not receive tuition assistance under this section for (1)
more than 12 semester credit hours in any semester or (2) more than
five academic years or 10 semesters, whichever occurs first for the
person.
To be eligible for tuition assistance a person must be:
an enlisted member;
a warrant officer of a grade from Warrant Officer One through
Chief Warrant Officer Three;
or a commissioned officer of a grade from Second Lieutenant
through Captain; and,
meet any additional qualifications established by the Adjutant
General.
Work and Family Policy Clearinghouse
The Work and Family Policies Clearinghouse, a public/private sector
program housed at the Texas Workforce Commission, is mandated
by the Legislature to provide "technical assistance and information
on dependent care and other employment-related family issues to
public and private sector employees, state agencies, policy makers,
and individuals." The legislation provides for a private sector Work
and Family Policies Advisory Committee and earmarks money for
the activities of the Clearinghouse by creating a Work and Family
Fund to be administered by the Clearinghouse. The fund may be used
for the following:
The operation of the Clearinghouse (i.e., the provision of
information and technical assistance related to dependent care
and other employment-related family issues)
Research conducted or sponsored by the Clearinghouse on child
care and other employment-related family issues in the State