Request By:
Martha Belwood
Administrator
State Agency for Social Security
Post Office Box 557
Frankfort, Kentucky 40602
Opinion
Opinion By: Steven L. Beshear
You seek an opinion as to whether the City Attorney of Livermore is subject to social security taxes by such position. The Attorney takes the position that he is an independent contractor, that he performs legal services for hundreds of clients, and that the City of Livermore is just another client.
His argument is based upon common law principles in that the City does not provide the tools of his work, nor a place to work, and the City has no control over the work he performs. He bolsters his opinion with guidelines from Circular E, Employer's Tax Guide of the Internal Revenue Service, which advises that, generally, self-employed persons such as lawyers are not employees.
Previous to 1980, KRS 69.580 prescribed the duties of a City Attorney of a Fifth Class City. Livermore is such a City [KRS 81.010 (5)]. KRS 69.580 and numerous other statutes were repealed by the 1980 General Assembly and replaced by general statutes dealing with all classes of cities.
KRS 83A.080 (1980 General Assembly) now provides:
"(1) All nonelected city offices shall be created by ordinance which shall specify:
"(a) Title of office;
"(b) Powers and duties of office;
"(c) Oath of office;
"(d) Bond, if required; and
"(e) Compensation.
"(2) All nonelected city officers shall be appointed by the executive authority of the city and, except in cities of the first class, all such appointments shall be with approval of the city legislative body if separate from the executive authority. The officers may be removed by the executive authority at will unless otherwise provided by law."
Thus, under the 1980 legislation, a city legislative body can establish, by ordinance, those non-elective officers that it deems necessary to operate city government which could include the office of city attorney. Also, it is to be noted that each appointed city office existing upon enactment of the 1980 law (Senate Bill 26) is to continue until abolished by ordinance. Additionally, and importantly as to this matter now under our consideration, is the continued fact a city may also hire an attorney under a personal service contract to advise the city in legal matters.
On September 11, 1980, the minutes of the Livermore City Council reveal:
"Mayor Henton read a summary of Ordinance 13-80 to establish the office of City Attorney for the City of Livermore. Motion to place this reading on record was made by Price. Second by Frizzell. All in favor."
The ordinance in question reads:
"No. 14-80
"AN ORDINANCE ESTABLISHING THE SERVICE CONTRACT FOR AN ATTORNEY FOR THE CITY OF LIVERMORE.
"Be it ordained by the council of the City of Livermore, McLean County Kentucky that an attorney for the City of Livermore be selected.
"The attorney will attend all council meetings requiring legal advice, prepare ordinances, write letters and advice on all city problems requiring legal advice. The attorney will also represent the city in grant and loans administered by Federal Agencies for which the fees are established by the said agencies, and meet with the Agency Representatives as required.
"Salary will be adjusted annually as required."
We do not believe Ordinance No. 14-80 established the office of city attorney. Note that its title refers to establishing a "service contract" . It appears that the attorney selected by the City of Livermore was employed under a personal service contract and as such the Attorney would be considered an independent contractor. See City of Glaslow v. Burchett, Ky., 419 S.W.2d 544 (1967), and Hobson v. Howard, Ky., 367 S.W.2d 249 (1963).
The Social Security Statutes for Public Employes provide in KRS 61.420(3) (Definitions) as follows:
"'Employe' means any person in the service of the Commonwealth, a political subdivision or an interstate instrumentality of which the Commonwealth is a principal and shall include all persons designated officers including those which are elected and those which are appointed. " (Emphasis supplied.)
Therefore in conclusion, we believe an attorney appointed or selected to fill a city attorney office position created or still in existence by ordinance would fit the definition of "employe" in KRS 61.420(3). However, if the attorney is working as an independent contractor basis, whether on a particular case basis or to handle general legal matters for the city, the attorney in this capacity should not be treated as an "employe" for social security purposes. We believe the city attorney of Livermore falls into the latter category just discussed.