RE: Alternative Wage Payment Arrangements and Educational Service Centers

You requested the opinion of the Attorney General as to the possible application of Indiana Code § 20-26-5-32.2 to an Educational Service Center (hereinafter referred to as "ESC"), as established under Ind. Code Chpt. 20-20-1.

Ind. Code § 4-6-2-5 contemplates that either chamber of the General Assembly may request, by resolution, an official advisory opinion of the Attorney General as to the constitutionality of an existing or proposed legislative enactment. The final clause of that same statutory provision grants to the Attorney General the discretion to render (or decline to render) opinions sought by individual state legislators about other matters, including questions of statutory interpretation having statewide significance and which are likely to recur while evading judicial review.

Can an ESC, as an extended agency of school corporations, enter into alternative wage payment arrangements under Ind. Code § 20-26-5-32.2, or does the so-called "10 day rule" apply as a bar to such alternative payment methods under Ind. Code § 22-2-5-1?

Although an ESC is an extension of a school corporation, it is not a "school corporation" for the purposes of Ind. Code § 20-26-5-32.2 such that an ESC may utilize the wage payment flexibility afforded under this statute.

The factual context in which this question arises is as follows, according to the requesting party:

Under Ind. Code § 22-2-5-1(b), "[p]ayment shall be made for all wages earned to a date not more than ten (10) business days prior to the date of payment" (hereinafter referred to as the "10 day rule"). The 10 day rule, if applied to public school employees who work less than 12 months a year would result in the employees not receiving a paycheck during lengthy holiday breaks and summer breaks. Because public school employees in many instances prefer to be paid through alternative wage payment methods (such as a teacher employed for 9 or 10 months a year being paid in equal installments over the course of 12 months), Ind. Code § 20-26-5-32.2 was passed to allow Indiana public school employees to utilize alternative wage payment methods notwithstanding the 10 day rule.

The alternative wage payment arrangement referenced above is codified at Ind. Code § 20-26-5-32.2, and states in relevant part (with emphasis added):

(a) Notwithstanding IC 22-2-5-1, a school corporation or charter school and:

(1) an employee . . .

may agree in writing to a wage payment arrangement.

(b) A wage payment arrangement under subsection (a) may provide that compensation earned during a school year may be paid:

(1) using equal installments or any other method; and

(2) over:

(A) all or part of that school year; or

(B) any other period that begins not earlier than the first day of that school year and ends not later than thirteen (13) months after the wage payment arrangement period begins.

Such an arrangement may provide that compensation earned in a calendar year is paid in the next calendar year, so long as all the compensation is paid within the thirteen (13) month period beginning with the first day of the school year.

. . .

(g) Employment with a school corporation or charter school may not be conditioned upon the acceptance of a wage payment arrangement under subsection (a).

This alternative method for payment of wages provides employees of a school corporation or a charter school the opportunity to be compensated in equal installments over the course of 13 months. Absent from this statute is the specific inclusion of an ESC.

Indiana law provides for the creation of an ESC, which is by definition an "extended agency of school corporations." Ind. Code § 20-20-1-2(a).¹ While an ESC organized under Ind. Code § 20-20-1-2 mirrors in some ways services provided by a "school corporation," see e.g., Ind. Code § 20-20-1-2(b), Ind. Code § 20-20-1-13, and may employ certified teachers for various purposes including instruction, Ind. Code § 20-20-1-9(2), the "primary purpose" of an ESC "shall be to perform educational planning on a cooperative basis and to assist in meeting specific educational needs in participating school districts which could be better provided by an educational service center than by the districts themselves." 511 IAC 4-4-1(A).² Nowhere does a statute or regulation define an ESC as a "school corporation."³

"School corporation," for the purposes of Ind. Code § 20-26-5-32.2, is not defined as including an ESC. The following are dispositive (with emphasis added):

IC 20-26-2-1 Applicability

Sec. 1. Notwithstanding IC 20-18-2,⁴ the definitions in this chapter apply in IC 20-26-1 through IC 20-26-5 and IC 20-26-7.

IC 20-26-2-4 "School corporation"

Sec. 4. "School corporation" means a local public school corporation established under Indiana law, including a:

(1) school city;

(2) school town;

(3) metropolitan school district;

(4) consolidated school corporation;

(5) county school corporation;

(6) community school corporation; and

(7) united school corporation.

"[W]hen construing a statute, the legislature's definition of individual words is binding upon us." Rose & Walker, Inc. v. Swaffar, 721 N.E.2d 899, 901 (Ind. Ct. App. 2001). In this matter, the legislature has defined "school corporation" for application to Ind. Code Chpt. 20-26-5, and this definition is binding upon any interpretation of this concept of Ind. Code § 20-26-5-32.2.⁵ The applicable definition of "school corporation" does not include an ESC.

The Indiana General Assembly has specifically defined "school corporation" at Ind. Code § 20-26-2-4 and applied this definition to Ind. Code Chpt. 20-26-5.⁶ This definition of "school corporation" is binding for the purposes of Ind. Code § 20-26-5-32.2. Since the legislature has not included ESC within this definition of "school corporation", the wage payment arrangements in Ind. Code § 20-26-5-32.2 are not available to an ESC. Accordingly, the frequency of wage payments for ESC personnel would be dictated by Ind. Code § 22-2-5-1.

SUBMITTED, and

ENDORSED FOR PUBLICATION:

Curtis T. Hill, Jr.

Attorney General

Scott C. Newman, Chief Counsel

Kevin C. McDowell, Assistant Chief Counsel

DIN: 20181010-IR-010180413AOA

Composed: May 03,2024 8:05:25PM EDT

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