LEGAL Q&A: Municipal Official vs Municipal Employee: What is the Difference & Does it Matter for Compensation & Personnel Policies?

The information contained in this article is not intended as legal advice and may no longer be accurate due to changes in the law. Consult NHMA's legal services or your municipal attorney.

At its core, the purpose of electing officials is to allow the voters to hold those they elect accountable for their actions while in office. If the voters do not like the job the elected representative is doing, they can choose to vote for someone else in the next election. If the voters are generally satisfied with the job performed, they will, presumably, reelect the incumbent.

That theory underpins the relationship between municipal officials and employees. Whether select board member, town clerk, tax collector, moderator, or any number of other local officials, the voters have a choice in who serves. That’s not the case with employees. Employees are hired by the governing body (unless otherwise specified in the statutes) and their employment is governed by the municipality’s personnel rules..

The division between municipal official and employee can be confusing, especially for those municipal officials just coming into office, and we find that the relationship between the two position is the subject of many of our legal inquiries at this time of year. Here are some of the common questions that we field.

Q. Under New Hampshire law, what is the difference between a municipal official and a public employee?

A:  Although RSA chapter 41 is helpfully titled “Choice and Duties of Town Officers” and lists a number of required and optional municipal officers (also known as municipal officials), that chapter does not actually distinguish between officials and employees of the municipality. That distinction is found in the New Hampshire Public Employee Labor Relations Law (RSA 273-A:1). It states, in relevant part, that a “public employee” is “any person employed by a public employer except:

(a) Persons elected by popular vote;

(b) Persons appointed to office by the chief executive or legislative body of the public employer;

(c) Persons whose duties imply a confidential relationship to the public employer; or

(d) Persons in a probationary or temporary status, or employed seasonally, irregularly or on call. For the purposes of this chapter, however, no employee shall be determined to be in a probationary status who shall have been employed for more than 12 months or who has an individual contract with his employer, nor shall any employee be determined to be in a temporary status solely by reason of the source of funding of the position in which he is employed.

The first two categories are, really, the key distinction for municipalities. Elected and appointed officials – largely those listed under RSA chapter 41 – are distinct and separate from the ordinary  duties and responsibilities required of “employees.”

Q.  Is there some sort of ‘at-a-glance’ test we can use to determine whether someone may qualify as an “employee” or “municipal official”?

A:  Yes. Municipal employees, just like all other employees, are hired based upon the job description and qualifications that the employer – the governing body – has decided are appropriate for that particular job. While those qualifications must comply with any relevant non-discrimination laws, generally, the employer is free to require whatever qualifications that it wishes.

Municipal officials, on the other hand, are only required to meet a few basic statutory qualifications that the municipality cannot alter. All municipal officials, whether elected or appointed, must take an oath of office. RSA 669:9. They must also be U.S. citizens. RSA 91:2. All elected municipal officials must be domiciled in that municipality. RSA 669:6. A municipality with a charter may require up to a one-year residency requirement before a person runs for elective office. RSA 49-C:9 and RSA 49-D:3, I(d). If an elected official moves out of the municipality during his or her term, the official will be deemed to have resigned at the time they moved. RSA 654:1, II.

In addition, employees generally work for the employer until one (or both) of them decide to dissolve the relationship. Municipal officials, on the other hand, serve for the time specified in the relevant statute. For example, select board members serve for three-year terms. RSA 41:8. After the expiration of their terms, officials may stay on in their positions but only so long as it takes to elect or appoint and qualify their successors. See RSA 41:57-a.

Q.  How do municipal employees differ from municipal officials when it comes to compensation?

A:  Municipal employees have their compensation set at the time of hiring by the governing body or other person authorized to negotiate compensation. Typically, this will entail either an hourly or salaried rate along with any ancillary benefits – e.g. health and other insurance, retirement contributions, etc. – all in accordance with state law.

Municipal officials, in contrast, have their compensation set by town meeting. This may either be through separate warrant article or a dedicated line in the detailed chart of accounts which clarifies the general budget warrant article. Once compensation is set by town meeting, the official “earns” that compensation regardless of the number of hours actually worked.

Q.  What control does the governing body have over employees compared to municipal officials with regard to work hours and work product?

A:  Municipal employees, regardless of what department they may be assigned to in the municipality, are ultimately subject to the supervision of the governing body or, if applicable, town manager. See RSA 37:6. The governing body may adopt work rules – such as personnel policies – and enforce those policies in accordance with the relevant labor and employment statutes. Employees who violate those rules may be disciplined or fired.

Municipal officials, in contrast, are generally not subject to supervision by the governing body. (The major exception being the highway agent. RSA 231:62). They set their own hours – subject to any building rules adopted by the governing body – and perform the tasks assigned to them by the statutes. They cannot be removed from office except as specified in the statutes. For example, the governing body may remove, without notice, any collector of taxes, town clerk, or any treasurer, who, in their judgment, has become insane or otherwise incapacitated to discharge the duties of the office. RSA 41:12. (It would be wise to consult with legal counsel before doing so, however). If the ill or non-performance of an elected official does not rise to the level of requiring removal by the governing body, the only recourse is for the voters to elect someone else to the position at town meeting.

Q.  How should the governing body, budget committee, and human resources deal with raises, time-off, and overtime for employees versus municipal officials?

A:  Municipal employees are protected by a number of state and federal laws that do not apply to municipal officials. For example, the minimum wage and overtime compensation requirements of the federal Fair Labor Standards Act apply to most municipal employees but do not apply to officials. 29 U.S.C. §203. Municipal employers must comply with New Hampshire’s Minimum Wage Law (RSA chapter 279), and the Protective Legislation statute (RSA chapter 275), which covers a wide variety of subjects including hours of work, payment of wages and discrimination. Other protections that apply to employees but not officials include worker’s compensation (RSA chapter 281), unemployment compensation (RSA chapter 282-A), maternity leave (RSA chapter 354-A), the federal Americans with Disabilities Act (42 U.S.C. §12101), and the federal Family and Medical Leave Act (29 U.S.C. §2611).

In most municipalities, these various laws that apply to municipal employees are incorporated into the personnel policy, personnel handbook, or other policies adopted by the governing body. Those policies set the rules for time-off, overtime, and other ancillary benefits received by employees. Raises for employees, of course, are determined by the governing body and, although they are often conditioned on and administered after a vote by town meeting on the budget, they may be given at any time of the year – regardless of the outcome of the town meeting vote – through reallocation of funds via the transfer authority contained with RSA 32:10.

As stated above, municipal officials, in contrast to employees, generally have their compensation set by town meeting and “earn” that compensation regardless of the number of hours actually worked. The governing body does not have the authority to adjust the compensation of elected officials, only town meeting does. Thus, municipal officials may acquire additional compensation by persuading voters to increase the line dedicated to their compensation. In addition, municipal officials are not subject to personnel policies and other workplace rules. If they want time off, they can simply take it. If the voters disagree, they can elect someone else at the next town meeting.

Natch Greyes is Municipal Services Counsel with the New Hampshire Municipal Association.  He may be contacted at 603.224.7447 or at legalinquiries@nhmunicipal.org.