Knowledgebase-Does an Employee Have a Right to a Salary Increase by Virtue of Provisions Made in the Budget for Salary Increases


Information Product

Title:Does an Employee Have a Right to a Salary Increase by Virtue of Provisions Made in the Budget for Salary Increases
Summary:MTAS was asked whether an employee has a right to a salary increase by virtue of provisions made in the budget for salary increases.
Original Author:Shechter, Leslie
Co-Author:
Product Create Date:07/23/92
Last Reviewed on::07/15/2017
Subject:Budgets--Municipal; City council--Procedure; Personnel--Compensation
Type:Legal Opinion
Legal Opinion:

Reference Documents:

Text of Document: July 23, 1992

You have asked whether an employee has a right to a salary increase by virtue of provisions made in the budget for salary increases. In my opinion, the answer is no.

According to the minutes of the meeting in which your budget was approved, the mayor indicated that there were ample funds for "pay increases for all employees with no tax increase." After the budget was approved unanimously, you added that you were reviewing the salaries for the departments over which you have authority and would not commit to an across the board pay increase. In fact, you indicated that you intended to use the additional funds to "equalize the salaries and make them a little more fair."

Under the municipal charter, all commissioners have complete administrative authority over their constituent departments, including the ability to hire and fire and to set compensation. Section 4. Organization of City Government.

The Commissioners operate their departments within the approved budget, but there is no line item for salaries nor specific salaries set out in the budget. Thus, in approving the budget, the operating expenses of the entire department are approved, not specific salary amounts. In my opinion, there was simply an understanding that funds were available to support pay increases for all employees, not that the Commissioners were obligating themselves to give all employees pay increases.

An employee is entitled only to the compensation set and:
[T]he receipt of compensation in any amount for public service is not a constitutional right....If compensation is not prescribed by law, the proper officer or board may in the exercise of sound discretion, determine such rate, and the courts will not interfere with the exercise of that discretion in the absence of abuse. McQuillen, Municipal Corporations, 3rd Ed., Vol. 4, 12.180.

The salaries of your departmental employees are not established by law and therefore, are within your discretion to set. Further, the power to set salaries includes the:
    power to adjust or regulate, and implies the plenary right to act by lowering or raising salaries. McQuillen, Municipal Corporations, 3rd Ed., Vol. 4, 12.196.

In fixing salaries, you were interested in awarding pay increases in a manner that more equitably compensated your employees for their services. Obviously, it was your opinion that those not given increases were receiving adequate compensation. This determination is one which I think a court would not interfere with.

In short, I do not believe employees in any of the departments which you administer have any "entitlement" to a pay increase.

Sincerely,

Leslie Shechter
Legal Consultant

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