October 22, 1976
Mr. Dennis Finch, Secretary
Department of Labor
Joe Foss Building
Pierre, South Dakota 57501
OFFICIAL OPINION NO. 76-102
Employment contract for county highway employees
Dear Mr. Finch:
You have requested an opinion based on the following factual situation:
FACTS:
The Brown County Highway employees are presently negotiating for an employment contract. One of their proposals is substantially as follows: The employees agree to work a five day/fifty hour week during the months of May through September and forty hours per week the remainder of the year. However, the per month pay of the employees would be computed by multiplying the total hours worked per year by the hourly rate (plus overtime when applicable) and dividing that sum by twelve. Therefore, the employees would receive twelve equal pay checks even though in some months they would have actually earned more than the average figure while in others they would have earned less.
QUESTIONS:
l. Would the above proposal and method of payment be authorized under South Dakota law?
2. May the county highway employees be paid every two weeks or a total of twenty-six times per year rather than on a monthly basis?
My research fails to disclose any statutes which directly address the questions you have asked. SDCL 3-8 deals with time and manner of compensation for employees, but specifically refers to "compensation of officers and employees payable out of the state treasury." (SDCL 2-8-62.) Thus, since county highway employees are paid from county general funds, said statutes are inapplicable. Likewise, SDCL 7-7-15 and 20 specifically refer only to compensation in the office of county auditor, treasurer, register of deeds and coroner and not employees of the county highway department.
IN RE QUESTION NO.1:
However, with regard to Question No. 1, I refer you to SDCL 7-22-1 which provides, in part:
7-22-1. Before any account, claim, or demand against any county for any obligation, property, or services for which such county shall be liable shall be allowed, the person having such account, claim, or demand, either by himself or agent, shall reduce the same to writing, and shall verify the same to the effect that such account is just and true; that the money therein charged was actually paid for the purposes therein stated; that the property therein charged for was actually delivered or used for the purposes therein stated, and was of the value therein charged; and that the services therein charged for were actually rendered and of the value as charged, or in case such services were official, for which fees are prescribed by law, that the fees and amounts charged therefor are such as are allowed by law; and that no part of such account, claim, or demand has been paid.
My predecessors have ruled on several occasions that salaries of county officers and employees are subject to this provision. (1925-26 AGR 254, 1931-32 AGR 643.) In keeping with these decisions, it is my opinion that wages must be earned prior to submission of a voucher and signing of the warrant.
Therefore, for example, an employee commencing employment March I, would only be entitled to be paid at the end of the first pay period for hours actually worked. He would be prohibited from receiving an amount on the basis of an average number of hours per pay period if said amount exceeded what was actually earned. Implementation of a feasible plan pursuant to the proposal in your factual situation which could guarantee compliance with SDCL 7-22-1 is incomprehensible to me. The additional practical problem of recovering overpayment from an employee who, for example, terminated after employment during that part of the year when only forty hours per week are worked further leads me to the conclusion that SDCL 7-22-1 was intended to be applicable to claim for wages. The answer to your Question No. 1 is NO.
By way of suggestion, however, it is my opinion that SDCL 7-22-1 would not prohibit the county and the highway employees from entering into an employment contract whereby said employees would receive a fixed annual salary payable in "X" number of equal installments. The employees' pay would then be similar to the method of compensation for elected county officials (i.e. - based on the performance of a job rather than a per hour or per day labor basis).
IN RE QUESTION NO.2:
County highway employees are under the direction and supervision of the county highway superintendent subject to the general supervisory control of the board of county commissioners. (SDCL 31-11-3 et seq.; 1919-20 AGR 281.) In the absence of specific statutory guidance as to the manner and time of compensation, it is my opinion that the county commissioners, in cooperation with the county highway superintendent, must exercise their discretion in establishing pay periods and amounts of compensation for county highway employees. SDCL 7-8-20 vests county commissioners with the power to superintend county fiscal affairs and perform such other duties and acts as are required.
Therefore, in my opinion, the answer to your Question No.2 is YES. Payment of county highway employees' wages on a bi-weekly basis would not violate State law.
Respectfully submitted,
WILLIAM J. JANKLOW
ATTORNEY GENERAL
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