09/12/04 — Retirement decision felt throughout state

View Archive

Retirement decision felt throughout state

By Barbara Arntsen
Published in News on September 12, 2004 2:05 AM

A recent decision by the state attorney general's office denying retirement benefits to former Goldsboro City Attorney Harrell Everett may affect city and county attorneys across the state.

The state retirement office received an informal opinion last week from the attorney general's office confirming a 1989 opinion that Everett wasn't eligible to participate in the local government retirement program.

That decision is now having a rippling effect throughout the state.

"We will be working closely with the League of Municipalities and the County Commissioners Association to translate the ruling into guidelines that all counties and municipalities can follow," said Michael Williamson, director of the state's retirement system."Our job is to pay benefits to employees that are entitled to them."

For purposes of retirement eligibility, state law defines an employee as a person regularly employed by local or state government. "Regular," as defined by the North Carolina Administrative Code, is an employee, "the duties of which require not less than 1,000 hours of service per year."

If there is a question about what constitutes regular employment, the state decides.

City Manager Richard Slozak said Everett was a full-time employee, but Mayor Al King and Mayor Pro Tem Chuck Allen said he was not.

In a five-page letter to Williamson, Assistant Attorney General Robert Curran cited several Supreme Court rulings that supported his decision. He said that Everett wasn't eligible for retirement pay, unless the city had additional information it could offer that would show he wasn't an independent contractor.

Curran said that the Internal Revenue Service, as well as most courts, used a "right to control" test to decide the full-time employment question.

Factors considered in determining right to control include the extent of the hired party's discretion over when and how long to work; the method of payment; the hired party's role in hiring and paying assistants; whether the hiring party is in business; and the provision of employee benefits.

Curran said that he supported the retirement system's previous determination that Everett was an independent contractor, rather than an employee.

Wayne County makes retirement system payments for both of its lawyers, County Attorney Borden Parker and Tax Attorney Dortch Langston. Both have private law practices, as well.

County Manager Lee Smith said the two county lawyers were "contractual employees." Smith said that as contractual employees, the lawyers are regarded as full-time employees, receiving W-2 forms from the county, but are exempt from the county's personnel policy.

The lawyers are given the retirement system payments and also health insurance as part of the contracts, Smith said. He said the practice of providing health insurance and retirement benefits for lawyers was common.

Smith said that the county didn't have any plans to change the retirement pay for its attorneys.

"The statements made by the attorney general's office were unofficial, and we won't do anything until we get an official opinion" Smith said. "When we get something official, we'll take a look at it."

Smith said that he had looked at the employment history of Parker and Langston, and said they qualified for the retirement because they both worked over 20 hours a week.

"I think our situation is different," Smith said. "The city received a letter in 1989 saying Mr. Everett wasn't eligible, but we didn't. I think that shows our situation isn't the same."

Williamson said that Everett and the city would be given an opportunity to provide additional information that might affect the case.

Slozak said that the city didn't plan on submitting any more information, but said he thought that Everett was going to appeal the decision.

Everett declined to comment on the issue.

Williamson said his office would continue to review specific circumstances regarding retirement pay.

"We have already been called by the County Commissioner Association specifically asking for an understanding of the new ruling and applying it," Williamson said."There are probably others that need clarification."

He said it wasn't uncommon over time for there to be a new twist requiring a ruling on specific instances.

"This will have a state wide effect," he said. "I didn't think it would have as wide a play, but we're constantly required to interpret the state statutes."