Can a long-serving Virginia town attorney who worked under a contract be enrolled in the state retirement system as a retirement honor?

Plain-English summary

The Town of Richlands had an attorney who served the town under a contract for more than thirty years. After the town did not reappoint him, the council wanted to honor his service by enrolling him in the Virginia Retirement System under the town's newly adopted VRS plan. Town Attorney Bradley Ratliff asked the AG whether that was legally possible.

The AG concluded that it was not. The Virginia Retirement System, governed by §§ 51.1-100 through 51.1-168, is open to specific categories of public servants. Section 51.1-132 defines eligible employees as "[o]fficers and employees of the political subdivision who are regularly employed full time on a salaried basis and whose tenure is not restricted as to temporary or provisional appointment." The eligibility statute does not include independent contractors.

The facts that Ratliff laid out all pointed in the same direction. The attorney served under a specific contract with the town. The town was just one of several clients. He received an annual "fee" or "salary" along with corresponding 1099 tax forms (not W-2 forms). All of those are classic indicators of independent-contractor status under federal tax and labor law, and the AG accepted them at face value. The fact that the town referred to him as an "officer" does not change the analysis when the legal indicators all point the other way.

The AG flagged that the ultimate eligibility determination rests with VRS itself, but the legal conclusion is that the attorney cannot participate. A long, loyal, and excellent record of service does not change the fact that he was not on the town's payroll as an employee.

Currency note

This opinion was issued in 2010. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The VRS eligibility statutes have been amended over the years, including the addition of separate plans (Plan 1, Plan 2, Hybrid Plan) tied to hire dates. The fundamental distinction between employees and independent contractors remains relevant, but anyone evaluating eligibility today should consult the current Title 51.1 statutes and the VRS-administered rules.

Common questions

Why can't the town just decide to make the attorney an employee retroactively?
Employment status under VRS is not a label the employer can apply at will. It tracks actual working conditions: how compensation was paid, what tax forms were issued, whether the person was on the payroll, whether they served multiple clients, whether they controlled their own work. The attorney here had 1099 forms, multiple clients, and a service contract. Reclassifying him retroactively would not change those underlying facts.

Is being called an "officer" enough to qualify?
No. The Town of Richlands referred to the attorney as an officer, but that label by itself doesn't establish VRS eligibility. The statute requires both that the person be an officer or employee AND that they be regularly employed full time on a salaried basis with non-temporary tenure. Calling someone an officer doesn't get them past the second part of the test.

What's the distinction between an independent contractor and an employee in this setting?
Common indicators of independent-contractor status: a fixed-term or task-based contract; payment as a "fee" rather than a salary on a payroll; receipt of 1099 forms instead of W-2 forms; control over the work; the freedom to take other clients. Indicators of employee status: payroll inclusion, withholding, W-2 tax forms, prescribed work hours, exclusive service. The opinion notes that nearly every indicator here pointed toward contractor status.

Background and statutory framework

The VRS framework cited by the AG:

• §§ 51.1-100 through 51.1-168. The Virginia Retirement System statutes generally.
• § 51.1-130. Authorizes political subdivisions to permit their eligible employees to participate in VRS.
• § 51.1-132. Defines eligible employees as "[o]fficers and employees of the political subdivision who are regularly employed full time on a salaried basis and whose tenure is not restricted as to temporary or provisional appointment."

The statute is two-part:

1. The person must be an officer or employee, not an independent contractor.
2. The person must be regularly employed full time on a salaried basis, with non-restricted tenure.

The opinion treats the contractor/employee question as dispositive, so it does not reach the second part.

Citations

• Va. Code § 2.2-505
• Va. Code Ann. §§ 51.1-100 through 51.1-168
• Va. Code Ann. § 51.1-130
• Va. Code Ann. § 51.1-132

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2010/10-088-Ratliff.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General

November 12, 2010

Bradley C. Ratliff, Esquire
Town Attorney, Town of Richlands
Bolling, Hearl, Ratliff
401 Railroad Avenue
P.O. Box 1250
Richlands, Virginia 24641

Dear Mr. Ratliff:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You inquire whether the former town attorney is eligible for benefits under the Virginia Retirement System.

Response

It is my opinion that because the former town attorney served as an independent contractor rather than as an employee, he is ineligible to participate in the Virginia Retirement System ("VRS").

Background

You relate that an esteemed attorney, who served the Town of Richlands for over thirty years under a contract with the Town, was not reappointed to the position at a recent town council meeting and that the town council would like to honor his service by including him in its VRS plan. The Town adopted the VRS plan in June 2010. You report that, pursuant to his contract with the town, this attorney received an annual "fee" or "salary" and corresponding 1099 tax forms, and that he accepted other clients. You note that the Town viewed him as an "officer."

Applicable Law and Discussion

The Virginia Retirement Service is governed by §§ 51.1-100 through 51.1-168 of the Code of Virginia. Section 51.1-130 authorizes political subdivisions to permit their eligible employees to participate in the state system. Section 51.1-132 defines eligibility. It provides that eligible employees are those "[o]fficers and employees of the political subdivision who are regularly employed full time on a salaried basis and whose tenure is not restricted as to temporary or provisional appointment ...."

Under the facts presented, the attorney was not an employee or officer of the Town. The fact that the Town was just one of the attorney's clients, that the attorney served under a specific contract of employment, and that he received 1099 tax forms, signals that the attorney served as an independent contractor rather than as an employee or an officer. The eligibility statute does not include independent contractors. Therefore, although the ultimate determination of eligibility rests with VRS, I conclude that the former town attorney is not eligible to participate in the Virginia Retirement System.

Conclusion

Accordingly, it is my opinion that, because the former town attorney served as an independent contractor rather than as an employee, he is ineligible to participate in the Virginia Retirement System.

With warmest regards, I am

Kenneth T. Cuccinelli, II
Attorney General