Untitled Texas Attorney General Opinion

The Attorney General of Texas December 22, 1978 JOHN L. HILL Attorney General Honorable Joseph N. Murphy, Jr. Opinion No. H- 1203 Executive Director Employees Retirement System Re: Whether the state or a of Texas political subdivision may estab- P. 0. Box 12337, Capitol Station lish a special program to make Austin, Texas 78711 payments to an employee on account of sickness. Deer Mr. Murphy: You ask: “May the State or any of its political subdivisions establish a special, separate, program to make payments to an employee on account of sickness, such payments not being e continuation of wages?” Your question pertains to the relationship of sick pay to “wages” as that term is used in the Social Security Act and as it has been interpreted by the Secretary of the Department of Health, Education, and Welfare. The inclusion or exclusion of amounts paid public employees as “wages” determines the contribution to be made by public employers end employees, and the rate of benefits to be received ,by the employee. The Social Security Act defines wages of public employees to exclude sick pay as follows: [Tlhe term “wages” means remuneration paid . . . for employment . . . except that . . . such term shall not include - . . . . fb) The amount of any payment . . . made to . . . en employee . . . under a plan or system established by an employer which makes provision for his employees generally . . . on account of . . . sickness or accident disability. . . . 42 U.S.C. S 409. The Secretary of Health, Education, and Welfare has interpreted this exclusion as follows: P- 5129 Honorable Joseph N. Murphy, Jr. - Page 2 (H-1303) [Playments made by a governmental entity to en employee on sick leave are excluded from “wages” only if there is legal authority for the employer to make payments specif- ically on account of sickness es distinguished from authorization to merely continue salary payments during periods of absence due to illness. SSR 72-56 (19721. (Compere the Commissioners of Internal Revenue’s Rev. Rul. 65-275 (19651, applicable to exclusion of sick pay in