This is Samuel and I will discuss this and provide you information in this regard.
Here is what the current Texas law is Under 659.015 states about govenment/state employees and comp time.
Sec. 659.015. OVERTIME COMPENSATION FOR EMPLOYEES SUBJECT TO FAIR LABOR STANDARDS ACT. (a) This section applies only to a state employee who is subject to the overtime provisions of the federal Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.) and who is not an employee of the legislature, including an employee of the lieutenant governor, or of a legislative agency.
(b) The employee is entitled to compensation for overtime as provided by federal law and this section. To the extent that this section and federal law prescribe a different rule for the same circumstance, federal law controls without regard to whether this section or federal law prescribes a stricter rule.
(c) An employee who is required to work hours in excess of 40 hours in a workweek is entitled to compensation for the excess hours either by:
(1) the agency allowing or requiring the employee to take compensatory time off at the rate of 1-1/2 hours off for each hour of overtime; or
(2) at the discretion of the employing agency, in cases in which granting compensatory time off is impractical, the employee receiving pay for the overtime at the rate equal to 1-1/2 times the employee's regular rate of pay.
(d) Holidays or other paid leave taken during a workweek are not counted as hours worked in computing the number of overtime hours under Subsection (c) or (e).
(e) An employee may not accumulate more than 240 hours of overtime credit that may be taken as compensatory leave under Subsection (c)(1), except that an employee engaged in a public safety activity, an emergency response activity, or a seasonal activity may accumulate, in accordance with 29 U.S.C. Section 207(o)(3)(A), not more than 480 hours of overtime credit that may be taken as compensatory leave under Subsection (c)(1). An employee must be paid at the rate prescribed by Subsection (c)(2) for the number of overtime hours the employee works that cause the employee to exceed the amount of overtime credit the employee may accumulate. In this subsection, "overtime credit" means the number of hours that is computed by multiplying the number of overtime hours worked by 1-1/2.
(f) When an employee does not work more than 40 hours in a workweek but the number of hours worked plus the number of hours of holiday or other paid leave taken during the workweek exceeds 40 hours, the employee is entitled to compensatory time off at the rate of one hour off for each of the excess hours. When an employee does work 40 or more hours in a workweek and in addition takes holiday or other paid leave during the workweek, and the total number of hours worked still exceeds 40 after subtracting the hours compensable under Subsections (c)-(e), the employee is entitled to compensatory time off at the rate of one hour off for each of the remaining hours in excess of 40. When an employee does not work more than 40 hours in a workweek and the number of hours worked plus the number of hours of holiday or other paid leave taken during the week does not exceed 40 hours, the employee may not accrue compensatory time for the week under this section.
(g) Except as provided by Subsection (k), compensatory time off to which an employee is entitled under Subsection (f) must be taken during the 12-month period following the end of the workweek in which the compensatory time was accrued or it lapses. An employee may not be paid for that compensatory time, except as provided by this subsection and Subsections (i) and (j). An employee of an institution of higher education as defined by Section 61.003, Education Code, or an employee engaged in a public safety activity, including highway construction and maintenance or an emergency response activity, may be paid at the employee's regular rate of pay for that compensatory time if the employer determines that taking the compensatory time off would disrupt normal teaching, research, or other critical functions.
(h) Exceptions to the workweek overtime computation for public safety, emergency response, or seasonal situations shall be made in accordance with the federal Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.).
(i) With authorization from the administrative head of the agency for which an employee works, or that person's designee, an employee may be paid for the hours of compensatory time the employee earns for work directly related to a disaster or emergency declared by the appropriate officer of the state or federal government.
(j) With authorization from the administrative head of the agency for which an employee works, or that person's designee, an employee employed by a state mental health or mental retardation facility may be paid for any unused compensatory time if the employing agency determines that taking the compensatory time off would disrupt the normal business functions of the agency.
(k) Compensatory time off to which a correctional officer employed by the Texas Department of Criminal Justice is entitled under Subsection (f) must be taken during the 24-month period following the end of the workweek in which the compensatory time was accrued or it lapses.
This law was last amended in 2011. In essence under the laws allows that a public agency may provide compensatory time under paragraph (1) only-- (A) pursuant to--
(i) applicable provisions of a collective bargaining agreement, memorandum of understanding, or any other agreement between the public agency and representatives of such employees; or
(ii) in the case of employees not covered by subclause (i), an agreement or understanding arrived at between the employer and employee before the performance of the work.
In essence, unless there is a union contract, or an understanding with the employees, overtime would need to be paid in lieu of Comp Time. Any employee who feels there is a violation should contact the TX Department of Labor and file a complaint.