District employees earn right to extra pay for payroll system upgrade

Two school district employees, the director of payroll and director of personnel, were informed that their employment contracts with the district had been proposed for termination after they both received extra pay while working to upgrade the district's payroll system. They requested a hearing regarding the proposed termination before an independent hearing examiner assigned by the Texas Education Agency.

After considering the evidence presented at the hearing, the examiner made the following findings and conclusions:

Both employees had been employed at the district for over 20 years and both had excellent employment records. Both employees were considered "exempt" employees, meaning that they were not entitled to receive overtime pay in accordance with the Fair Labor Standards Act. The problem began when the district decided to convert its payroll system. The vendor hired by the district to perform the conversion failed to properly staff the project, causing much of the conversion work to fall on the shoulders of the two employees, who spent considerable time working on data conversion between the older payroll system and the new one.

The payroll conversion was rolled out on a large scale when district employees returned to work for the 2021-22 school year. That rollout turned into an absolute fiasco, resulting in thousands of employees getting no pay, others getting less pay than they were entitled to, and others getting overpaid. In response, the district hired a consultant to address the problem.

Although the consultant was not employed by the district, he acted as the two employees' supervisor, conducted regular staff meetings with them and frequently gave direction, supervision and oversight to them and their staffs. During a board meeting, the superintendent announced that the consultant was overseeing the Finance Department in which the employees worked. In this board meeting, which focused considerably on the payroll conversion, one of the board members told the superintendent that "it's all hands on deck and let's get this situation fixed."

Shortly after this board meeting, the consultant met with the employees and directed them to track the extra time they spent working on the payroll conversion project for pay purposes, including retroactively for extra work performed before the board meeting. The employees never questioned the consultant's authority for this directive and reasonably expected that they would get paid for this extra work.

Both employees documented considerable time working on the payroll conversion well beyond the normal workweek, including several hours during weeknights and on weekends. Both employees meticulously documented their work on timesheets. Although the timesheets were not signed by their "supervisor," the timesheets apparently were submitted, converted into the normal batch form report for payment, and then processed for approval. The district did not dispute that the extra work the employees claimed and submitted by them was in fact performed. All told, one employee received pay for her extra work on the payroll conversion totaling $40,716.44 and the other received $17,031.74.

By mid-year, the payroll situation had been resolved and the consultant's contract with the district ended. During a review of prior years' overtime payments, the district learned that extra payments were made to the two employees. The district determined that neither employee had been approved to receive extra payments and they were placed on administrative leave with pay. The district then proposed the employees' contracts for termination, alleging that "you caused to be paid to yourself and to the other employee overtime pay for your work at the District...." and that such conduct was done deceptively.

After hearing the evidence, the independent hearing examiner disagreed, finding that the employees acted with complete transparency and under the direction of their then-supervisor, who told them to track their extra hours spent on the payroll conversion to get paid. They did not hide or deceive anyone about their work and in fact openly devoted enormous amounts of time outside their normal work duties or work hours to help fix the payroll conversion problem.

Further, nobody disputed that these employees worked the amount of extra hours documented on their timesheets. They openly and transparently submitted their timesheets for payment of the extra duty consistent with existing practices and with other employees who submitted timesheets and were paid for extra work without a supervisor's written approval. They kept receiving their paychecks without question from district leadership.

Based on the above, the independent hearing examiner concluded that there was no good cause to terminate the employees and that they had earned supplemental duty pay in accordance with their contracts and recommended to the board of trustees that they be reinstated to their positions.