House Bill 438 (HB 438):  If enacted, the bill would create a straightforward rule requiring annual payouts of unused compensatory time for public employees. While it seeks to provide a financial benefit to employees, it also increases budget planning and payroll obligations for state and local government employers.  

 House Bill 438 (HB 438):  The proposed law would not override existing collective bargaining agreements; however, in future negotiations, CBAs might need to adapt to the spirit of this legislation.
1. Purpose of the Act
The Act requires that employees of the State of New Mexico or its political subdivisions (e.g., counties, cities, school districts) receive monetary payment for any unused compensatory (comp) time at the end of each calendar year.
2. Key Provisions
a.	Mandatory Payout of Unused Comp Time (Section 1):
The new law adds a section to Chapter 10, Article 7 NMSA 1978.
It provides that, at the end of each calendar year, all state or local government employees must be paid the full value of any unused compensatory time accrued.
Applicability and Collective Bargaining Agreements (Section 2):
a.	If a collective bargaining agreement (CBA) covering a public employee includes provisions that conflict with this new law, the terms of the CBA prevail over the new law.
b.	This protects agreements currently in place under the Public Employee Bargaining Act.
3. Practical Effects and Considerations
a.	Immediate Financial Impact on Public Employers:
b.	State agencies, counties, and municipalities would need to budget for paying out unused compensatory time at year-end.
Employees who accrue significant comp time could receive larger payouts.
Impact on Employee Leave Decisions:
a.	Employees might prefer taking overtime pay instead of comp time, knowing any unused comp time will be paid at year-end.
This law effectively removes the possibility of “rolling over” compensatory leave indefinitely.
Administrative Complexity:
a.	Public employers must track comp time balances carefully to ensure correct year-end payouts.
b.	Payroll systems may require updates to handle these automatic payouts.
Collective Bargaining Agreements:
a.	For employees covered by union contracts, this new law applies only if the contract does not conflict with it.
b.	If the contract explicitly handles comp time in a different manner, the contract takes precedence.
 

 House Bill 438 (HB 438):  This proposal is a new section of Chapter 10, Article 7 NMSA  1978 -  "[NEW MATERIAL] PAYMENT OF COMPENSATORY LEAVE. 

 Committee Substitute February 28, 2025 in HLVMC.

HLVMCcs/HB 438:  The following is a summary of the proposed legislation requiring state and local governmental employers to allow their employees to cash out compensatory leave:
This proposal applies to employees of:
•	The State of New Mexico (i.e., state agencies).
•	Political subdivisions of the state (e.g., municipalities, counties, school districts).
Key Provision: Cash-Out of Compensatory Leave:
At least twice each year, every covered employee must be given the opportunity to:
•	Exchange any unused compensatory leave (comp time).
•	Receive compensation (i.e., payment) for that comp time.
•	The payment is for the full value of all unused compensatory leave that the employee chooses to exchange.
Collective Bargaining Agreements:
•	If any part of this act conflicts with an existing collective bargaining agreement under the Public Employee Bargaining Act, this law does not override those negotiated contract terms.
•	If an employee’s current union contract has different provisions, those contract terms still apply until they expire or are renegotiated.
This act ensures that twice a year public-sector employees in New Mexico can cash out their unused compensatory leave for its full monetary value, except where a collective bargaining agreement already addresses it differently.