I have a local government question which is out of my usual area of expertise, so I am hoping some of the experts like Lisa and Scott can guide me. Here is the scenario: elected city official and his wife (hired city employee) face criminal charges arising out of their official city duties. As a result, both have had to take time off of work to attend hearings, meet with their attorney, etc. They asked the city council to reimburse them for lost wages and the city council voted to do that. The question is: can the city council spend city money to pay for time an employee or elected official takes off work as the result of defending a criminal charge? I know that a city council can not pay the criminal defense fees for an employee when the employee is charged with an offense due to an action taken in the course and scope of duties, but I couldn't find anything that covered the lost wages issue. Any guidance will be greatly appreciated.

J Ansolabehere

There are a number of potentially complex questions implicated in this scenario, and I just got back from vacation with a resultant inability to navigate complex issues. Among the issues: is the employee wife an exempt employee? If so, how long was she docked? And was it done pursuant to an established public accountability policy? These and other fascinating FLSA issues may need to be considered.

Also, has there been a final outcome in the criminal matter? Was it favorable to the couple or the State? Is either of them a law enforcement officer who was charged as a result of performance of public duties? Those are important factors (as the AG and the Eastland Court of Appeals in White v. Eastland County have seen it) in determining whether the city has discretionary authority to reimburse for criminal defense expenses.

The back pay issue generally harkens to art. 3, section 53 of the constitution. As a general matter, it provides that a local governmental entity in Texas can't pay bonuses or "extra compensation." That means you get what you contracted for. Nothing more. But wait, the AG has said. Given that section 53 is tied to the amount provided by contract, the contract may in some cases provide for compensation over the baseline without the additional amount being the prohibited "extra" payout. Such may be the case with some defined incentive pay plans, for instance. Similarly, because the contract is the key to defining what is the bargained-for compensation versus what is "extra", the AG has suggested that a city could have a pre-existing policy of providing previously-withheld back pay where employees are exonerated in criminal matters that were the basis for the original withholding (I think a conviction would be problematic from a PR, as well as a constitutional, standpoint) without running afoul of section 53. However, that determination would have to be made pursuant to an existing policy. Changing the rules midstream or making a novel or arbitrary decision to pay back pay to an employee would likely violate section 53, according to the AG's reasoning in this area.

With that pellucid explanation of absolutely nothing, I stand ready to answer your federal Tax Code questions.

"Pellucid," means "easy to understand." The irony will not be lost on those of you who, like me, had to look up the word.