October 29, 1985

Alvin L. Hall, Director 
Division O.A.S.I. 
State Social Security Administrator 
Office of State Auditor 
Capitol Building 
Pierre, South Dakota 57501

OFFICIAL OPINION NO. 85-44

Re:  Extra pay for teachers

Dear Director Hall:

You have requested my opinion concerning the procedure school districts should follow in implementing the extra pay for teachers available to the districts, pursuant to House Bill 1364 as passed by the 1985 Legislature.  The applicable section of the bill provides:

Section 10, the sum of three million, two hundred fifty thousand dollars  ($3,250,000) shall be authorized for payments to school districts for the expense of operating school for five days preceding the opening of classes. The formula to be used in allocating to each school district funding authorized under this section shall be based upon the number of instructors in each school district as a percentage of the total numbers of instructors in the state.  Nothing in the preceding sentence shall be considered to affect in any way the operation of the minimum foundation formula as it affects any school district.  Each school district shall utilize these funds to compensate its teachers for the curriculum and staff development activities authorized by §  13-26-2.  Such compensation shall be supplemental to, and separate from, a contract salary or any other compensation provided to teachers by the local district.

You have asked the following question:

QUESTION: 

Do both the employee's share and employer's share of the social security tax come from the funds appropriated for the above-mentioned purpose? 

EXAMPLE:  If $375 is available through the appropriation for each teacher, and both 'halves' of the social security tax are taken from the $375, the teacher would then receive $322.12 (7.05% plus 7.05% totaling 14.1% x $375 = $52.88) after the deduction of this tax.  Or does only the employee's share come from the appropriated funds with the employer's share being the responsibility of the employer to provide from some other funds? EXAMPLE: Again if $375 is available through the appropriation for each teacher and only the employee's share is taken from the $375, the teacher would then receive $348.56 (7.05% x $375 = $26.44) after the deduction of this tax.

ANSWER:

As you know, House Bill 1366, also passed by the 1985 Legislature, addresses this same topic; however, that Bill has been referred for a vote of the people and as a result, the provisions and the House Bill 1364 must stand alone.  I agree that the statute does not precisely address the question you ask; however, due to the wording of the last sentence of the section set out above, it is my opinion that the payments made pursuant to this act are intended to directly benefit teachers and are not subject to the ordinary conditions of  negotiation and the like which attach to teacher salaries.  On the other hand, Federal Law prohibits payment by the employees of the employer's share of social security withholding. See S.S.A. Reg. 422-5.  Accordingly, it is my opinion that the employer may withhold only the employee's share from the amount available per teacher.  In other words, the employer's matching share of appropriate withholding items must be provided from other funds available to the district.

It is my understanding that in many districts, the money provided to the district for this purpose from the Division of Education actually covers more FTEs than the district presently has on the payroll.  This result occurs because in some districts there has been a reduction in staff from last year's report upon which the distribution was based, and in addition, numerous districts report partial FTEs for accreditation purposes that are filled by administrators who are not covered under the compensation provisions of House Bill 1364.  It is my opinion that any excess funds the district received as a result of the foregoing examples or any funds allocated for teachers who did not attend the entire five-day inservice may be utilized by the district to offset the employer's share of the appropriate withholding items.  Accordingly, assuming the figures in your example are correct, each teacher in a public school district in this state should receive at least $348.56 for attending the five-day inservice program.  Of course, this final figure may vary depending  upon the percentage of withholding for income tax purposes that would apply to a particular teacher's salary.

Respectfully submitted,

Mark V. Meierhenry
Attorney General