Opinion 2006 - 1


This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

CLAIMS -- Payments (of compensation prior to completion of payroll period)
LOCAL LAWS -- Pre-emption (matters contained in article 8 of the Town Law)
MUNICIPAL FUNDS -- Payrolls (requirement to certify as prerequisite to payment)
PUBLIC OFFICERS AND EMPLOYEES -- Compensation (payment of prior to completion of payroll period)

TOWN LAW §120: Pursuant to Town Law §120, certification of the payroll or other claim for compensation of town officers and employees is a prerequisite to the payment of compensation and, therefore, payment of salary to employees may not be made until after all work covered by the payroll period has been performed. The certification provisions of section 120 may not be superseded by local law.

This is in reply to your letter asking whether a town may pay an employee on the morning of the last day of the payroll period even though such employee has not yet completed the final day of work for that period. You suggest that payment prior to the completion of all work on the last day of the payroll period, at least in the absence of a collective bargaining agreement, could constitute a gift or loan of town monies in contravention of article VIII, §1 of the State Constitution.

Town Law §27(1), which relates to the compensation of town officers and employees, states in part as follows:

The town board of each town shall fix, from time to time, the salaries of all officers and employees of said town, whether elected, or appointed, and determine when the same shall be payable … Salaries shall be in lieu of all fees, charges or compensation for all services rendered to the town or any district or subdivision thereof … Provisions of this subdivision shall not preclude the town from hiring laborers, clerical assistants and stenographers, and compensating them upon the hourly or daily basis …..

Section 27 must be read together with article 8 of the Town Law (§§100-125), which prescribes procedures for town finances, including budgetary procedures and procedures for the payment of claims against a town.

Town Law §118(1) generally provides that no claim against a town may be paid unless an itemized voucher therefor is presented, audited and approved. Claims for fixed salaries and compensation for services of officers and employees engaged at agreed wages are excepted from the general requirement that all claims against a town be audited and approved prior to payment (see also Town Law §29[7]). Pursuant to section 120 of the Town Law, however, all payrolls or other claims for compensation for personal services rendered to the town by any person, other than an elective town officer, must be certified by the town officer or employee having direct supervision of the claimant. The certification must be to the effect that the services indicated on the payroll or claim for compensation “were actually performed by the person or persons mentioned therein.”1 The evident intent of the payroll certification requirement is to provide a method to assure the accuracy of the payroll or other claim for compensation (see 1980 Opns St Comp No. 80-538, unreported).

Since section 120 requires that the certification be to the effect that services already have been performed, certification may not occur or have effect until all services that are the subject of the payroll or other claim for compensation have been rendered. In view of the requirements of section 120, we have expressed the opinion that absent proper certification, payroll checks may not be released (Opn No. 80-538, supra). It then follows that since the certification is a prerequisite to the payment of compensation, payment may not be made until after all work covered by the payroll period has been performed ( id.).

We note that section 10 of the Municipal Home Rule Law authorizes towns to adopt local laws, not inconsistent with the Constitution or general law, relating to the compensation and welfare of its officers and employees. Further, Municipal Home Rule Law § 10(1)(ii)(d)(3) authorizes towns to supersede any provision of the Town Law, with certain exceptions, relating to matters in relation to which and to the extent to which the town is authorized to adopt local laws. One of the exceptions stated in section 10(1)(ii)(d)(3) prohibits a town from superseding the provisions of Article 8 of the Town Law relating to town finances (Municipal Home Rule Law §10[1][ii][d][3][4]). 2 Therefore, the certification requirement of section 120 may not be superseded by local law to authorize payment prior to the end of work on the last day of the payroll period.3

Accordingly, pursuant to Town Law §120, certification of the payroll or other claim for compensation of town officers and employees is a prerequisite to the payment of compensation and, therefore, payment of salary to employees may not be made until after all work covered by the payroll period has been performed. The certification provisions of section 120 may not be superseded by local law.

 

January 10, 2006

Joseph F. Izzo, Supervisor
Town of Catskill

1 The town board, by resolution, may determine that, in lieu of certification, the payroll and other claims for compensation must be verified by the appropriate officer or employee (Town Law §120).

2 Municipal Home Rule law §10(1)(ii)(d)(3) does not preclude the transfer or assignment of functions, powers and duties from one town officer or employee to another.

3 In light of our conclusion herein, we need not address whether payment prior to the completion of services on the last payroll day would contravene the gift and loan prohibition of article VIII, §1 of the State Constitution. Also, you do not ask that we address whether prepayment may be provided for in a collective bargaining agreement, but presume that such a payment would not be violative of the constitutional gift and loan prohibition. With respect to such payment under a collective bargaining agreement, we call your attention to Matter of Board of Educ. v Ramapo Teachers’ Assn., 200 AD2d 62, 611 NYS2d 962 lv den 84 NY2d 806, 621 NYS2d 515). In that case, the court noted that a past practice of prepaying salaries to teachers under a collective bargaining agreement was not a loan violative of article VIII, §1 of the State Constitution, but was a prepayment for services promised to be rendered and that the failure to perform the contractual services would constitute a breach of contract. The court, however, also concluded that in light of Education Law §3015(3), which the court determined prohibits payment of teachers’ salaries in advances of services, the past practice was against the public policy underlying section 3015.