SL 60001.625 Fee-Based Public Officials
A fee-based public official is an individual who receives and retains remuneration directly from the public. An individual who receives payment for services from government funds in the form of a wage or salary is not a fee-based public official, even if the compensation is called a fee.
Reference: Social Security Ruling 92-4p (SSA adopted the IRS definition of a “fee.”)
A. POSITION COMPENSATED SOLELY BY FEES
Services in positions compensated solely by fees are excluded from coverage under Section 218 Agreements (unless the State specifically included these services) and are covered as self-employment and subject to SECA.
B. POSITION COMPENSATED BY SALARY AND FEES
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.