STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL
December 31, 1975
Mr. Jack Weiland, Chairman
Public Utilities Commission
State Capitol Building
Pierre, South Dakota 57501
OFFICIAL OPINION NO. 75-198
Consultant contracts for employee of State of South Dakota
Dear Mr. Weiland:
You have requested an opinion based upon the following facts:
Mr. A is an attorney admitted to practice law in the State of South Dakota and is employed full time from August 15 to May 15 as a professor of law at the State University. By Regential Rule, Mr. A is permitted to engage in consulting work, while in the areas of his expertise, not to exceed one day per week while under contract. No restrictions concerning consulting are imposed upon Mr. A while not under contract. Mr. A enters into a consulting contract with a state agency X to render legal services in his area of expertise when not under contract to the university and later, while under contract but in compliance with the Regential Rule.
Based on the above factual situation you ask:
1. During any period of time is Mr. A an employee of state agency X while rendering legal services as a consultant under a contract specifying Mr. A as an independent contractor.
2. May Mr. A receive compensation in a consultant/non-employee capacity from state agency X in addition to his regular compensation as an employee of the university without violating the dual compensation statute?
3. May Mr. A receive compensation in his consulting capacity from state agency X in excess of eight regular working hours per week, provided additional compensation represents consulting services performed during off duty hours from university employment?
The following statute must be considered with respect to each of the questions you ask:
SDCL 3-8-4. No person receiving a salary or per diem payable out of the state treasury or from the funds of any state institution or department, shall, during the period for which such salary or per diem has been or is to be paid, receive any other salary or per diem from the state or any institution or department thereof.
With respect to the first question you ask, it appears to me that Mr. A is an independent contractor and not a state employee. An independent contractor is defined in Black's Law Dictionary, 4th Edition (1951) as being one exercising an independent employment, one who contracts to do a piece of work according to his own methods and without being subject to the control of his employer except as to the results of the work. If any employee is merely subject to the control or direction of the employer as to the results to be obtained, he is an independent contractor: if he is subject to the control of the employer as to the means to be employed, he is not an independent contractor. Gulf Refining Company v. Wilkinson, 95 Fla. 664, 114 So. 503.
The second question you ask appears to have been partially answered by 1967-68 AGR 171. In that official opinion, the Attorney General concluded that additional compensation could be paid to a member of the law school staff for work performed outside of their usual hours of employment.
So long as Mr. A does the "non-employee consulting" during non-duty hours at the university, he may be compensated for both his consulting and his regular university duties. Mr. A can also be compensated for his non-employee consultations if he takes a leave of absence without pay from his regular duties at the university since he would then not be receiving a salary from the university for the period for which he is to be otherwise compensated for his non-employee consultation. Mr. A cannot, however, use paid annual leave time from the university for paid consultation with the state agency. SDCL 3-8-4 would be violated in such an arrangement, 1949-50 AGR 322.
With respect to the third question you raise, it is my opinion that Mr. A may be provided additional compensation for consultation services if such compensation is for consultation services performed during off duty hours from university employment, while on leave of absence without pay from the university, or during the period from May 16 to August 14 when Mr. A is not under contract to the university.
It is also my opinion that Mr. A may not be lawfully compensated for his "non-employee" consultations with agency X during the hours in which the Board of Regents' rule allows Mr. A to do individual consulting work during regular working hours. Mr. A can do all the "consulting" with "private" interests that the Regents' rule permits, but he cannot lawfully do so for agency X during regular working hours and be compensated both by the agency and by the university. In my opinion SDCL 3-8-4 would be violated by such an arrangement. The Board of Regents does not have the power to undercut SDCL 3-8-4 by rule, by contract or by any other means. If SDCL 3-8-4 needs to be changed, the Legislature is the proper public body to bring the matter to for changing.
The answer to your fourth question is YES. Presuming that the state agency is authorized and has finances to hire a consultant, Mr. A would be entitled to receive compensation for his consulting services during the summer months period when he is not under contract to the university.
Respectfully submitted,
William Janklow
Attorney General
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