Township Trustee
- Is a Township Trustee considered an “executive officer” of a “governmental subdivision or municipal corporation”?
- Is a Township Advisory Board member considered an “executive officer” of a “governmental subdivision”?
These questions arise when providing workers compensation insurance coverage for townships. Some carriers treat trustees as regular employees and other treat them as executive officers.
Also, some townships desire to cover the township advisory board members on their workers compensation policies. In the corporate world, we wouldn’t consider board members to be employees. However given the statute wording, it could be interpreted that board members could be considered executive officers of the township, and therefore, the township could elect to cover them.
Relevant Statutes
IC 22-3-6-1(b) (1) “An executive officer elected or appointed and empowered in accordance with the charter and bylaws of a corporation, other than a municipal corporation or governmental subdivision or a charitable, religious, educational, or other nonprofit corporation, is an employee of the corporation under IC 22-3-2 through IC 22-3-6….”
IC 22-3-6-1(b) (2) states “An executive officer of a municipal corporation or other governmental subdivision or of a charitable, religious, educational, or other nonprofit corporation may…be brought within the coverage…by specifically including the executive officer in the contract of insurance.”
Indiana Code §§ 22-3-6-1(b) (1) & (2) provide the parameters under which an “executive officer” of a “governmental subdivision” can be brought within coverage by including them specifically in the insurance contract. Accordingly, the questions involve the interpretation of two separate terms: (1) what does the statute mean by “governmental subdivision or municipal corporation” and (2) what does the statute mean by “executive officer.” A brief analysis below regarding these two terms as they relate to two questions.
Analysis
- Is a Township Trustee considered an “executive officer” of a “governmental subdivision or municipal corporation”?
- Brief answer: Likely yes.
- Pursuant to Indiana Code § 36-1-2-10, Indiana Code § 36-1-2-13, and Indiana Code § 36-1-2-23, a “township” is a “municipal corporation” and a “political subdivision.” And under Indiana Code § 36-6-4-2, a Township Trustee is the “township executive”. Accordingly, a “township trustee” is the executive of a municipal corporation or political/governmental subdivision.
- Is a Township Advisory Board member considered an “executive officer” of a “governmental subdivision”?
- Brief answer: Likely yes.
- This one is a little more tenuous. Although the definition of “township” still equates to a “municipal corporation” and a “political subdivision,” the definition of “Advisory Board Member” is not as easily linked to “executive officer.” Unlike with the office Township Trustee described above, the Township Advisory Board is defined not as an “executive” but rather as the township legislative body. Indiana Code § 36-6-6-2(c); Indiana Code § 36-1-2-9(6). Nonetheless, a 1956 Attorney General opinion and a 1965 Indiana Court of Appeals opinion interpreting the definition of an “executive officer” suggest that it is not the label of “executive” that matters, but rather the difference between whether the office is a “public officer” and therefore not an employee.
- More particularly, the 1956 Attorney General Opinion addressed the question of whether members of the county council and other council’s would be considered “executive officers” under Indiana WC law. On page 201, the Indiana Attorney general stated that “executive officers” means “that group of persons commonly denominated as officers under prior law and who prior hereto were not entitled to compensation benefits when injured while engaging in executive activities.”
Accordingly, the Attorney General concluded that “executive officer” was intended “to extend workmen’s compensation benefits to those persons who serve and represent the governmental subdivisions and who are designated by the subdivision as included in the contract of workmen’s compensation insurance covering said subdivision by the payment of a premium on those individual executive officers.” (In short, that the statute leaves the choice of who to designate to the political subdivision, so long as that person is serving in a representative capacity).
- Additionally, In Union Township of Montgomery County v. Hays, 207 N.E.2d 223 (Ind. Ct. App. 1965), the Indiana Court of Appeals discussed whether a “township assessor” (an office which was recently eliminated by the Indiana Legislature) was an “executive officer.” The Court noted that “[i]t is well settled in this State that a public officer is not an ‘employee’ under the Workmen’s Compensation Act.” Id. at 282. The court then noted that “[a] public officer ‘is a position to which a portion of the sovereignty of the state attaches for the time being, and which is exercised for the benefit of the public.
The most important characteristic which may be said to distinguish an office from an employment is that the duties of the incumbent of an office must involve an exercise of some portion of the sovereign power.” Id. at 282-83. With this background, the court determined that a deputy township assessor was an officer because he/she exercised “a portion of the State’s sovereign power to assess and tax its citizens.” Id. at 283-84. As such, he was determined to be an “executive officer” to whom benefits did not extend unless specifically included in the contract. - Under the Attorney General and Indiana Court of Appeal’s analyses, it becomes apparent that the question of what is an “executive officer” depends on whether the office exercises some portion of the sovereignty of the state. The Township Trustee, by virtue of being named the executive officer most likely falls within that category.
A Township Advisory Board member, although exercising a legislative role, exercises certain powers of the state in ensuring that budgets are reviewed and set, and that the Township Executive has the money necessary to run the political subdivision. Ind. Code § 36-6-6-1 et seq.
Finally, as the Court of Appeals noted in Union Township, “[w]hen an individual has been appointed or elected, in a manner required by law, has a designation or title given him by law, and exercises functions concerning the public assigned to him by law, he must be regarded as a ‘public officer.’” Id. at 284. Although the term “public officer” is not the same as “executive officer” it does appear that the Court would interpret “executive officer” to mean “public officer.”
Since the Advisory Board members are elected and hold a title by that election, it is more probable than not that a Township could define them as an “executive officer” and choose to provide them benefits under the Workmen’s Compensation law.
Conclusion
These are a legal questions to which there is not direct court case to reference. However, our counsel’s advice is that the answer is likely yes, the Township Trustees and Advisory Board Members would be considered a “public officer” and also be included as executive officers of a “governmental subdivision”.
An agent and carrier should seek clarification from the township if the intent is to cover or not cover the Trustee and Advisory Board Members. Here’s a further explanation.
Since the Advisory Board members are elected and hold a title by that election, it is more probable than not that a township could define them as an “executive officer” and choose to provide or not provide them benefits under the WC Act.
Accordingly, this interpretation would make Trustees and Advisory Board members subject to IC 22-3-6-1(b) (2) which states “An executive officer of a municipal corporation or other governmental subdivision or of a charitable, religious, educational, or other nonprofit corporation may…be brought within the coverage…by specifically including the executive officer in the contract of insurance. The election to bring the executive officer within the coverage shall continue for the period the contract of insurance is in effect, and during this period, the executive officers thus brought within the coverage of the insurance contract are employees of the corporation under IC 22-3-2 through IC 22-3-6.”
Consequently, again this interpretation indicates Trustees and Advisory Board members would be excluded from coverage unless the township specifically elects to include them. An appropriate manner to include them in the contract of insurance would be to:
- Add their payroll, using the Basic Manual Rule 2-E-1 for Executive Officers, and
- Attach the endorsement, “Sole Proprietors, Partners, Officers and Others Coverage Endorsement” (WC 00 03 10).
If the township elects not to cover the Trustees and Advisory Board members, then no payroll would be added. The record should be clear that the township made an informed decision to cover or not cover the Trustee and/or Advisory Board Members.
The material in this document has been prepared and shared for informational purposes only and should not be relied upon as legal advice on any particular situation.
