Opinion No. ( 1987 )

The Honorable Senator, District 98 406 Armstrong Building El Dorado, AR 71730

Dear Senator Mahony:

This is in response to your request for an opinion as to whether the five percent educational incentive which is added to the salary of a firefighter in El Dorado should be used in the calculation of the firefighter's retirement pay.

Whether the amount should be included in the calculation of retirement benefits depends upon whether the educational incentive pay is correctly classified as salary. The Arkansas Supreme Court discussed the terms salary and compensation in the case of Hestand v. Erke, 227 Ark. 309, 298 S.W.2d 44 (1957). In that case it was determined that overtime pay is not salary. The Court reasoned that overtime pay might constitute compensation. Salary was defined as "payment at regular intervals of fixed compensation regularly paid as by the year, quarter, month or week."

It would appear that the Court's reasoning in Hestand would apply to the educational incentive pay offered by the City of El Dorado. The incentive pay would not appear to be salary within the definition of the statute and thus would not be eligible for inclusion in the calculation of the retirement benefits.

The foregoing opinion, which I hereby approve, was prepared by Special Assistant Attorney General George A. Harper.