Generally, a position compensated by a salary and fees is considered a fee-basis position
if the fees are the principal source of compensation, unless a State law provides
that a position for which any salary is paid is not a fee-basis position. A State
may exclude positions compensated by both salary and fees from Social Security and
Medicare coverage under the State’s Section 218 Agreement. If the exclusion is taken,
none of the compensation received, including the salary, is covered wages under the
Section 218 Agreement. However, the salary payment, while excluded under the Agreement,
is subject to mandatory Social Security if the official is not a member of a public
retirement system.