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LIVINGSTON RESPONDS TO STATE COMPTROLLER REPORT

LIVINGSTON RESPONDS TO STATE COMPTROLLER REPORT

On July 17 the Office of the State Comptroller (“OSC”) issued a report entitled “Improper Participation by Professional Service Providers in the State Pension System,” and cited the Township of Livingston as one of 58 municipalities with a “likely” improper classification of one position. Upon investigation, the Township Manager learned that the State was questioning the status of one Township employee making less than $24,000 that Livingston had classified as an employee and the OSC considered an independent contractor.  At issue is the Township’s determination that a professional service position meets the definition of an “employee” contrasted with the OSC suggestion that an individual’s engagement in a private professional practice is a strong indication of independent contractor status.

“We classified our professional service positions after the State revised the pension regulations in 2007 and we felt comfortable that the employee in question was an employee and not a contractor” said Chief Financial Officer William Nadolny. “After revisiting the issue following the State Comptroller’s report, we believe this classification is correct.”

The 2007 pension law uses federal Internal Revenue Service regulations to determine employment vs. contractor status so the Township is going to the source.  “Since the classification for one position has been questioned, we will be seeking a definitive determination from the Internal Revenue Service,” noted Nadolny.  “In the event the IRS disagrees with our position, the employee in question will of course be removed from the Township payroll and paid as an independent contractor.”

“We are disappointed the OSC would release Livingston’s name as part of its list admonishing towns for this issue when Livingston did everything required under the 2007 pension law,” said Township Manager Michele Meade.

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