Opinion ID: 1857262
Heading Depth: 2
Heading Rank: 5

Heading: 53rd Checks.

Text: The Auditor took exception to Olive Branch's distribution of a fifty-third check to its employees because the Auditor deemed the extra check a bonus. Bonuses are donations and are prohibited by law. Olive Branch contends that the extra check given each year is a policy of dividing an employee's compensation into fifty-three checks per year. Nichols testified that when they interviewed prospective employees they told them that their salary was based upon fifty-three checks, that standard deductions and taxes were held out of the 53rd check, and the checks were actually a part of the overall compensation package. Of import is the fact the Board and the Mayor called these 53rd checks bonuses in their board meetings. Below are some excerpts from the board meetings: Next, discussion ensued in regard to Christmas bonuses for city employees. Alderman Bowlan made motion, seconded by Alderman Gillespie, that we continue this year giving employees one week's salary as Christmas bonus, but that the Board discuss this policy at a later date for continuation. Motion put to vote and passed unanimously. Board Meeting Minutes, December 3, 1985, p. 3. Next, was a discussion of Christmas bonuses for employees. Alderman Scott B. Phillips made motion, seconded by Alderman T.D. Doddridge, that all employees be paid a Christmas Bonus this year, but that all employees be notified that no additional bonuses are contemplated being paid. Motion put to vote and passed unanimously. Board Meeting Minutes, December 2, 1986, p. 2. Second, the city payroll records introduced at trial show that they divided employee salaries into fifty-two checks. As an example, an employee's, Syble H. Barry's, salary was set at $16,100 in 1985. This figure divided by fifty-two is $309.62, which was the amount of her weekly paycheck. On December 6, she received two checks for $309.62 each. Third, there were extra checks paid to employees who received an hourly wage. These persons' yearly earnings would depend on the time worked and, accordingly, could not be fitted into fifty-three weeks. These hourly workers received a check for an extra forty hour week that they never worked. Fourth, the payroll records list the 53rd check as a bonus. Fifth, this amount was paid during the Christmas season. Sixth, Olive Branch paid the 53rd check and the 52nd check at the same time. Seventh, the employees performed no extra work to be entitled to the extra check. The Auditor took exception to the fifty-third check because it was determined that the 53rd checks were donations. This Court defined donation in the early case of Craig v. Mercy Hospital-Street Memorial, 209 Miss. 427, 439, 45 So.2d 809 (1950). This Court stated the term `donation or gratuity' implies absence of consideration, the transfer of money or other things of value from the owner to another without any consideration. Craig, 209 Miss. at 439, 45 So.2d 809. In Golding v. Salter, 234 Miss. 567, 107 So.2d 348 (1958), this Court considered the question of Christmas bonuses. This Court announced the following decision: [T]he payments were nevertheless gifts to the employees, and no law has been cited, and we think that none can be cited, which vests in the board of trustees of a county hospital the right to make donations of public funds to private individuals. As stated by the Court in Joint Consolidated School District No. 2 v. Johnson, 163 Kan. 202, 181 P.2d 504, 509, That a public officer entrusted with public funds has no right to give them away is a statement so obviously true and correct as to preclude the necessity for citation of many authorities. The Legislature has never authorized, or attempted to authorize, any subordinate state agency to make donations of public funds to employees as Christmas presents. And payments of that kind are so clearly and distinctly payments which the board of trustees in this case could not lawfully make as to bar the members of the board from claiming justification or immunity from liability therefor on the ground that the payments were made in good faith and honest error. Golding, 234 Miss. at 589, 107 So.2d at 356-57. Also, as authority, the Auditor cites the Mississippi Constitution Art. 4, §§ 66, 96. The Mississippi Constitution Art. 4, § 66 states: No law granting a donation or gratuity in favor of any person or object shall be enacted except by the concurrence of two-thirds of the members elect of each branch of the legislature, nor by any vote for a sectarian purpose or use. The Mississippi Constitution Art. 4, § 96 states: The legislature shall never grant extra compensation, fee, or allowance, to any public officer, agent, servant, or contractor, after service rendered or contract made, nor authorize payment, or part payment, of any claim under any contract not authorized by law; ... Olive Branch strongly argues that the 53rd checks were merely compensation and the employees relied on these promises made by Olive Branch before they were hired. Olive Branch cites several National Labor Relations Board cases for the proposition that when a 53rd check was part of the entire compensation package presented to prospective employees, during the initial employment interview, it is to be considered compensation not a bonus. N.L.R.B. v. Bancroft Mfg. Co., 635 F.2d 492 (5th Cir.1981), cert. denied, 452 U.S. 917, 101 S.Ct. 3053, 69 L.Ed.2d 421 (1981); Weisel v. Singapore Joint Venture, Inc., 602 F.2d 1185 (5th Cir.1979); N.L.R.B. v. Zelrich, 344 F.2d 1011, 1014 (5th Cir.1965); General Tel. Co. of Florida v. N.L.R.B., 337 F.2d 452, 453-54 (5th Cir.1964); N.L.R.B. v. Citizens Hotel Co., 326 F.2d 501 (5th Cir.1964). However, if this argument were true why would employees' salaries, listed in the payroll as a certain amount, be less the sum of the extra check? If, when hiring Syble H. Barry, see supra, she was told that her salary was set for $16,100, then why pay her the extra $309.62? If Barry was told she would get $16,409.62, why was this not presented on the payroll? Also, this argument is not persuasive because Olive Branch gave an extra check to hourly employees, who were told what their hourly pay would be, but certainly could not be told how much the extra check would be for at Christmas time. It cannot be said that the trial judge was manifestly in error in granting this exception, and there is no merit to this assignment.