Texas House Bill HB 5404

Texas 2025 - 89th Regular

• Filed: 3/14/25

Caption

Relating to overtime compensation for certain state employees.

Summary

HB 5404 would revise the state overtime compensation statute for certain Texas employees who are covered by the federal Fair Labor Standards Act. The bill applies to state employees other than legislative employees and legislative-agency staff, and it states that these employees are entitled to overtime compensation under both federal law and state law, with federal law controlling if there is any conflict. The bill changes the current overtime framework by removing language that gives agencies discretion to choose between compensatory time and cash overtime in some situations. Under the bill, an employee who works more than 40 hours in a workweek must be compensated either by receiving compensatory time off at a rate of 1.5 hours for each overtime hour or by being paid at 1.5 times the regular rate of pay. The bill is set to take effect September 1, 2025.

Impact

HB 5404 would amend Section 659.015 of the Education Code, which governs overtime compensation for state employees subject to the Fair Labor Standards Act. Its practical effect is to strengthen overtime rights for covered state workers by limiting agency discretion and making overtime compensation more mandatory and uniform. It would not apply to legislative employees or legislative agencies, and it preserves federal law as controlling where federal and state rules differ.

Sentiment

Based on the bill text and the absence of recorded committee testimony or votes in the provided materials, the bill appears to be framed as a worker-compensation and administrative-efficiency measure rather than a controversial policy overhaul. The title and structure suggest support for clearer overtime rules for state employees, but there is no direct evidence in the record provided of formal support or opposition. The bill was referred to the Delivery of Government Efficiency committee, indicating it was being considered in an administrative/government-operations context.

Contention

The main point of contention is likely the reduction of agency discretion. Current law allows agencies, in some cases, to decide whether overtime is handled through compensatory time or cash payment when comp time is impractical; HB 5404 would remove that discretionary language and make overtime compensation more mandatory. Another likely issue is fiscal impact, since requiring more cash overtime payments could increase state payroll costs, while supporters may argue the bill ensures fairer treatment and clearer compliance with federal overtime standards. Legislative employees and legislative agencies are expressly excluded, which may also be a point of interest in discussions about scope and fairness.