20 CFR 404.1026(a)(3)

SSR 72-36

The Commissioner, affirming assessments made against the State of Missouri on basis of income of fee-paid public administrators, held that public administrators were public officers and therefore employees whose income constituted covered wages under State's section 218 agreement; also held that State law passed subsequent to entering into an agreement could not redefine the scope of its agreement; and further held that deputy public administrators of certain counties were covered under section 218 agreement as of effective date of State law authorizing public administrators of such counties to hire deputies.

The State of Missouri timely requested a review pursuant to section 218(s) of the act of the Administration's assessments of contributions due based on its determination that remuneration received by public administrators and deputy public administrators in the form of fees from third parties constituted wages within the meaning of the Act, and that the services were thus covered under the terms of the State's section 218 agreement with the Secretary. The State is of the view that since the remuneration did not come from county funds it was not "wages" prior to October 13, 1961, the effective date of a State law (H.B. 635) which broadened the meaning of the term "employee" as used in the State's agreement to include ". . . county officers remunerated wholly by fees from sources other than county funds . . ." and made provision for such officers to pay social security contributions. The Secretary has delegated to the Commissioner of Social Security authority to make reviews and findings and to give notice of his findings as required by section 218(s).

The facts establish that public administrators are public officers and, therefore, employees within the meaning of section 218(b)(3) of the act. Public administrators have served in every county of the State of Missouri and in the city of St. Louis during all of the periods these entities have been covered under the State's section 218 agreement. They are elected to office pursuant to Section 473.730, Vernon's Annotated Missouri Statutes, which provides for the election of a public administrator in every county in the State and the city of St. Louis. It further provides that the public administrator shall take an oath of office as required by the State constitution and shall enter into bond with the State for a sum not less than $10,000, with two or more securities. The duties of the public administrator are set forth in Section 473.743, Vernon's Annotated Missouri Statutes. Such duties include taking into the public administrator's charge and custody the estates of deceased persons, the person and estates of all minors and the estates or person and estate of all insane persons in the county in specified cases. The compensation of the public administrators is provided for by statute in the form of fees paid from the funds of the estates handled.

A former public administrator of Jackson County, a county of the first class, engaged other individuals to assist him in carrying out the responsibilities of this office. It appears that prior to August 29, 1957, there was no authority under Missouri law, express or implied, for any public administrator to engage others to assist him in the performance of official duties. Section 473.770, V.A.M.S., which became effective August 29, 1957, provided a public administrator in a county of the first class with authority to appoint deputies.

The Commissioner found on review, pursuant to the State's requests, that the earnings of public administrators were covered under the Missouri coverage agreement beginning January 1, 1951, or the date the county by which they were elected was included under the agreement, if later. The individuals engaged by the Jackson County public administrator to assist him in carrying out the functions of his office were deputy public administrators whose services became covered under the agreement as employees of Jackson County beginning August 29, 1957, the effective date of the legislation which gave a public administrator in a county of the first class authority to engage deputies. This is in accordance with the longstanding rule followed by the Social Security Administration that individuals appointed by a public official pursuant to express or implied statutory authority to perform services under the official's direction and control in connection with carrying out his official duties, are employees of the governmental entity which the official represents.

The Commissioner found that legally authorized fees received by the public administrators and deputy public administrators as remuneration for their services were "wages" within the meaning of the Act and of Social Security Regulations No. 4, Sections 404.1026(a)(3) (20 CFR 404.1026(a)(3)), which specifies:

The name by which the remuneration for employment is designated is immaterial. Thus, salaries, fees, bonuses . . . are wages within the meaning of the Act if paid as compensation for employment.

Congress in enacting Section 218 f the Social Security Act recognized that legally authorized fees received by public officials would be "wages" and gave States the option of excluding from coverage under an agreement services in positions compensated on a fee basis. The State of Missouri did not exercise this option in entering into its coverage agreement.

The Commissioner further found that the provisions of H.B. 635 did not serve to extend coverage to public administrators or deputy public administrators in Missouri, as the services of these individuals were already covered by the State's agreement at the time this bill was enacted. The terms of the agreement entered into with the State of Missouri incorporated the basic provisions, definitions, and conditions relating to the coverage to be provided by the agreement, and govern in resolving any question which arises regarding the agreement, including the coverage status of individuals. The status of the public administrators and deputy public administrators must, therefore, be determined in accordance with the provisions of the agreement as of the date coverage was made effective for employees of the counties in which they served.

The public administrators were public officers at all times beginning with January 1, 1951, and thus employees, and were compensated in the same manner (by fees from the estates handled) during the entire period. The statutes relating to the appointment, duties and compensation, as well as the actual manner and method by which the services were performed, were the same before and after H.B. 635 was enacted, and were not affected in any way by that bill. The provisions of the State's agreement, and the definitions contained therein, were not changed in any way by H.B. 635 since the State would have no authority after entering into an agreement to later redefine its scope by unilateral action or in a manner which would contravene the definitions as set forth in the agreement.

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