SUBMITTED TO: Mr.MOHAMMAND AQIB AHSAN OFFICER-HR THOMSON PRESS ( I ) LTD.

OKHLA

SUBMITTED BY: POOJA SHARMA MASTERS IN HUMAN RESOUCE INSTITUTE OF MARKETING AND MANAGEMENT

TABLE OF CONTENTS

S.NO. NO . 1. 2. 3. 4. 5. 6. 7. 8. 9.

DESCRIPTION

PAGE

ACKNOWLEDGEMENT BRIEF SUMMARY OF THOMSON PRESS UNITS IN THOMSON PRESS OBJECTIVES & METHODOLGY FINDING HR INVENTORY SYSTEM BENEFITS OF THE STUDY GRAPHS 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 decisionmaking 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 companys 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 organizations 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, Readers 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 number distribution of of a of large publications

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. 2. 3. 4.

High end drum and flatbed scanners. Multicolour sheetfed and web printing machines. Mechanized binderies. 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 companys 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, Readers 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 World Media Ltd. Ltd. BUSINESS Journalism Hosting/Online News

Living Media India Publishing/Music/Website Paper TV Today Network Electronic Media Ltd. Integrated India Ltd. Radio Database Publication of Industrial & Directories today Broadcasting Radio Commercial of FM

Broadcasting Ltd.

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 companys publishing and business i.e. detailed as under: 1. India Today : English 3. India Today : Tamil 5. India Today : Telugu 7. Computers Today 9. Books Today 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 2. India Today : Hindi 4. India Today : Malayalam 6. India Today Plus 8. Business Today 10. Cosmopolitan

Current Affairs Channel viz. Aaj Tak. The channel went operational in December 2000 & is highly popular news channel.

Organisation structure
MANAGING DIRECTOR

EXECUTIVE DIRECTOR

ACCOUNT & FINANCE

DOMESTIC PRINITING

INFORMATION SERVICES

MATERIALS 1-PURCHASE 2- STORES

FINANCE & ACCOUNTS

IMPORT & CUSTOMS

EDP EXPORT PRINITNG BUSINESS DEVELOPMENT TP LM ACCOUNTS & CIRCULATION

EXPORT TYPESETTING

TP - SCHOOL

ACCOUNTS

COSTING

TAXATION

INTERNAL AUDIT

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. 1 2 3 4 5 Designation General Manager Chief / Senior Manager Deputy Senior Manager Manager Deputy Manager Grades A B C D E Cadre I II II(A) III III(A)

6 7 8 9 10 11 12

Assistant manager Sr. Foreman/ Sr. Officer Foreman / officer Asst. Foreman/ Asst. Officer Senior Supervisor Supervisor Asst. Supervisor

F G H I J K L

IV V VI VII VIII IX 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 4:15 PM to 12:15 AM 12:15 AM to 8:15 AM 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 companys 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 companys policy, all the visitors should 1st Shift 2nd Shift 3rd Shift

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 visitors identity card, which are to be returned at the time of leaving the premises. Visitors are advised to display the visitors 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. 1 Management trainee 2 Graduate Engineer Category Qualifications Duration Cadre/Designation completion of training V / Sr. Foreman

of Training after Ph.D. / CA / One year ICWA / MBA BE / B Tech / One /

year VI / Foreman

BE (Ptg.) / training & M one year of

Trainee/ Junior MSW

Management 3 Trainee Supervisor Trainee 4 Asst Supervisor Trainee

Stat Dip

probation Engg. Two year IX / Supervisor

(Mech) Elect. / Civil BA / B Com / Two year B Sc / Dip Ptg. 60% Above 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 Manager Type of training Management Development Programs Junior management In-House External educational seminars Management Development Programs Specialized Training in-house Faculty IIMS, MDI

Workmen

technical discussions On the job training (at External / Internal least two in a month) Specialized room Training regular technical class-

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 Executive Appraisal Trainee Appraisal Work Man / Staff Appraisal TIME OF APPRAISAL April and October Quarterly January and July

BENEFITS AND FACILITIES LEAVE

LEAVE Leave is categorized as under PL/EL = Privileged Leave/Earned Leave CL SL = Casual Leave = 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: PRIVILEG S.N O. 1 2 3 CATEGORY E *E *A 240 75 75 SICK E 7 7 7 A 180 CASUAL E 7 7 A -

Asst Supervisor 28 GM Administrative staff 21 Workers 14

 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 its 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: COMPANYS CUSTOMERS INCLUDE: INDIA Adidas Bates Clarion ITC LG Becton & Dickinson Lintas LIC of India Nestle Maruti Suzuki Samsung WORLD WIDE Addison Wesley Al Nisr Publications Book Builders, Hong Kong Cambridge University Press, U.K Dorling Kindersley, U.K Elsevier Group, U.K. Gordon & Breach, Singapore Gulf News, Dubai Harcourt Brace Publishers Inner Traditions, U.S.A

Otto Burlington Rediffusion Mercedes Benz Mudra R K Swamy Osho Commune Sahara Airlines State Bank of India UCO Bank Panjab & Sind Bank Modi Care Escorts Times of India

International Publisher & Distributors John Wiley McGraw- Hill Mission India, U.S.A Octopus Group Osho International (World wide) Oxford University Press Promotional Reprint Company, U.K Reed Customer Books, U.K Springer Verlag, Germany Studio Editions, U.K UNs International Childrens Education 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 debtors 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 thirdparty 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 costeffective. 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 Hours Length of State Service Accrued Per Month Less than 2 years 7 Days Accrued Per Year 10.5 12 Allowable Carry-Over (Hours) 168 232

At least 2 but less than 5 8 years At least 5 but less than 10 9 years At least 10 but less than 10 15 years At least 15 but less than 12 20 years At least 20 but less than 14 25 years At least 25 but less than 16 30 years At least 30 but less than 18 35 years At least 35 years or more 20

13.5

256

15

280

18

328

21

376

24

424

27

472

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 Credit for one month's accrual will be given and posted for

leave on the first day of employment.

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 To be eligible for accumulated sick leave with pay for a

illness must notify his or her supervisor as soon as possible.

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 agencywide 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 12week 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 A person employed on a piecework basis An operator of equipment or a driver of a team whose

the people

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 A person covered by the Teacher Retirement System An independent contractor or the employee of an

One or Plan Two)

(except for state employees noted in the paragraph above)

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 Lump-Sum Payment For Type Of Separation Accrued Vacation Leave Any separation where employee permitted payroll expend accrued vacation Any separation the is to to NO may expend accrued vacation prior to separation) (but Accrued Sick Leave Balance NO (also, not eligible to use leave while remaining on payroll to extend vacation) NO N/A N/A NO YES NO sick NO NO NO (AGO H883 dated 9-26-76) 2 YES (29 CFR, YES 3 Part 553) Leave Further Accrual Of Lump-Sum Payment For FLSA Comp Time Payment For Or Hazardous Duty

Accrued Accrued Longevity H Vacation Sick State Leave Comp Time 6

remain on the

YES

(AGO H- (29 CFR,

where employee does payroll expend accrued vacation Any separation where employee permitted payroll expend

the not 883 dated 9-29-76) 2 to Part 553)

remain on the

NO (may the is to to YES not while (at remaining NO the time of on payroll NO separation) to expend state FLSA comp. Time) 7 YES the not to NO N/A N/A or use sick leave

NO (but may expend accrued state comp. Time prior to separation - AGO H883 dated YES (to extent such time has been exhausted - 29 CFR, Part 553) not YES 3 the

remain on the

accrued state or time Any separation where employee does payroll remain on the FLSA compensatory

9-26-76) 2 NO YES (AGO H- (29 CFR, 883 dated Part 553) 9-26-76) 2

NO

expend accrued state or time YES - for 1/2 of NO (AGO H- YES N/A N/A 899 dated (29 CFR, NO 11-18-76) Part 553)
2

FLSA

compensatory

sick leave Death (payment estate) to YES hours not to exceed 336 hours (lumpsum payment)
5

General References: Texas Government Code Ann., Sections 662.003, 661.032, 6 661.152, 659.015, 659.041.

Neither an employee nor an employee's estate may receive payment for vacation balanc

has not completed six months of continuous (unbroken) employment with the State (T

Code Ann., Sections 661.032, 661.152 and 661.062). According to AGO JC-0302, start amendment of section 661.063 of the Government Code.
2

no vested right in the method of calculating compensation for vacation benefits t

Subsequent to the issuance of AGO H-883 and H-899, the Legislature has made excep

payment of state compensatory time to employees of certain agencies and institutions of

under certain circumstances (General Appropriations Act, Article VII, Section 1, TXDO

Rider 11; Article II, Section 1, MHMR appropriations, Rider 20; Texas Government Co

659.015 This entitlement is applicable to the period covered by the expended accrued vacation 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 da

and ending on the last working day through which the accrued leave (both vacation a have extended.
5

An employee's estate may not receive payment for sick leave if the employee has n

months of continuous (unbroken) employment with the State at time of death (Texas G Ann., Sections 661.033; 661.152
6

This includes both state and holiday compensatory time.

Texas Government Code Ann., Section 661.067 Source: State Classification Office

Payment Entitlements For Employees Of Higher Education Institutions Upon Separation from State Employment Employment Status Vacation Accrual Sick Leave State Longevity Holidays

Service Pay

Accrual Credit Positions requiring student status No No Yes No No

as a condition of employment Faculty (Full- No, time or part- those or more) except Yes with Yes No Yes

time, 20 hours appointments of 12 months or more. Non-faculty (Full-time) Non-faculty (Part-time, 20 hours more) Other Faculty than No & No Yes No No or Yes Yes Yes No Yes Yes Yes Yes Yes Yes

Non-Faculty 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 Sunday 23 30 Monday Tuesday 24 31 25 1 HOLIDAY 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." Wednesday Thursday Friday Saturday 26 2 27 3 28 4 29 5

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 Labor Day Agency Status All closed Rosh Hashanah Optional Holiday Rosh Hashanah Optional Holiday Yom Kippur Optional Holiday Veteran's Day Thanksgiving Day Day All closed after All closed agencies 12-24-01 Monday agencies 11-23-01 Friday 11-11-01 agencies 11-22-01 Sunday Thursday 09-27-01 Thursday 09-19-01 Wednesday 09-18-01 Tuesday Date Day of Week Monday

agencies 09-03-01

Thanksgiving

Christmas Eve All Day Christmas Day closed All closed Day Christmas New Day after All closed

agencies 12-25-01

Tuesday

agencies 12-26-01

Wednesday

Year's All closed

agencies 01-01-02

Tuesday

Confederate Heroes' Day Martin Luther All closed All closed Texas Independence Day Good Friday Optional Holiday Cesar Day San Jacinto Day Memorial Day All closed Emancipation Day Independence Day LBJ's Birthday Skeleton required All closed Skeleton required Chavez

01-19-02

Saturday

agencies 01-21-02

Monday

King, Jr. Day Presidents' Day

agencies 02-18-02

Monday

03-02-02

Saturday

03-29-02

Friday

03-31-02

Sunday

04-21-02 agencies 05-27-02

Sunday Monday

crew 06-19-02

Wednesday

agencies 07-04-02

Thursday

crew 08-27-02

Tuesday

Fiscal Year 2003 Holiday Agency Status Labor Day All agencies 09-02-02 closed Rosh Hashanah Rosh Hashanah Yom Kippur Optional Holiday Veteran's Day All agencies 11-11-02 closed Thanksgiving Day Day Thanksgiving Christmas Day Christmas Day All agencies 11-28-02 closed after All agencies 11-29-02 closed Eve All agencies 12-24-02 closed All agencies 12-25-02 closed Day Christmas New Year's Day after All agencies 12-26-02 closed All agencies 01-01-03 closed Wednesday Thursday Wednesday Tuesday Friday Thursday Monday 09-07-02 09-08-02 09-16-02 Saturday Sunday Monday Monday Date Day of Week

Confederate Heroes' Day Martin

01-19-03

Sunday

Luther All agencies 01-20-03 closed All agencies 02-17-03 closed

Monday

King, Jr. Day Presidents' Day

Monday

Texas Independence Day Cesar Day Good Friday Chavez Optional Holiday Optional Holiday San Jacinto Day Skeleton crew required Memorial Day

03-02-03

Sunday

03-31-03

Monday

04-18-03

Friday

04-21-03

Monday

All agencies 05-26-03 closed

Monday

Emancipation Day Independence Day LBJ's Birthday

Skeleton crew required

06-19-03

Thursday

All agencies 07-04-03 closed Skeleton crew required 08-27-03

Friday

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 statepaid 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 the date the surviving spouse becomes eligible for Social

retirement under an employees' retirement plan; or

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 Jailers or guards of a county jail who are appointed by the

Justice (TDCJ)

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 Are not eligible for Medicaid, Are U.S. citizens or legal residents, and Have UGIP-eligible children under the age of 19 living

size,

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 longterm 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 Have filed a claim for benefits in accordance with 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

unemployment office

Commission rules

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 Other child who is in a regular parent-child relationship A child who is considered a dependent for federal income

governmental health plan

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 Surgical care and treatment Medical care and treatment Dental care Obstetrical benefits Prescribed drugs Medicines Prosthetic devices and supplemental benefits, supplies,

care and benefits

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 pretax, 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 Level of Coverage State Fiscal Year 2002 Employee Only Employee and Spouse Employee and Children Employee and Family $276.02 $433.45 $381.43 $538.86 Monthly Contribution

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 An injury to the spine that results in permanent and

hand at or above the wrist

complete paralysis of both arms, both legs, or one arm and one leg

An injury to the skull resulting in incurable insanity or Third degree burns over at least 40 percent of the body Third degree burns covering the majority of either both

imbecility

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 lumpsum 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 Is at least 50 years old and has 12 years of service credit in

in that class; or

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 As a custodial officer

and Paroles or Texas Department of Criminal Justice

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 Six years of membership service credit in the elected class

class of membership

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 May elect to become or remain a member if the position is

is included in the employee class

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 lumpsum 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 lumpsum 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 on authorized sick leave,

sustained while employed by the state; or

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 or a commissioned officer of a grade from Second

through Chief Warrant Officer Three;

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