Can a retired North Carolina state employee participate in the state employee suggestion system and collect cash awards for cost-saving ideas submitted after retirement?

Plain-English summary

Jane Smith Patterson, Secretary of the Department of Administration, asked the AG whether retired state employees could participate in the state employee suggestion system established under G.S. 143-340(1). The statute authorized the Secretary of Administration to establish "a meritorious service award system for state employees' suggestions" with cash awards paid from the cost savings produced when an adopted suggestion was implemented.

The 1983 AG concluded the statute does not authorize retiree participation. The statutory text uses "state employees' suggestions" and "employee suggestions," both phrased in the active sense. The opinion noted that the purpose of the statute (encouraging cost-saving ideas) might well be furthered by retiree participation. The text, however, does not provide for it.

There is one carve-out. If a retiree had submitted a suggestion before retirement, and the suggestion is later adopted and produces savings, the retiree can still receive the award. The eligibility moment is the moment of submission, not the moment of adoption. A retiree cannot make new submissions after retirement, but earlier submissions remain eligible for cash awards.

Currency note

This opinion was issued in 1983. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The state employee suggestion system has been modified over the decades, including changes to the maximum-award caps and the administrative procedures. Retiree-participation policy may have shifted, or the program may have been replaced or restructured. A current question should be directed to the Department of Administration.

Historical context: what the AG concluded

The 1983 opinion is short but well-reasoned.

It read "state employees" in the active sense. The statute says "state employees' suggestions." The AG read this phrase to refer to people who are currently state employees, not former state employees. The active sense is the more natural reading in context, especially because the program is tied to a state human-resources function (Department of Administration) that exists to manage active personnel.

It acknowledged the policy tension. The AG did not pretend the result was obvious or that retirees lacked good ideas. The opinion explicitly says the purpose of the statute may be furthered by retiree participation, but the text doesn't extend that far. Statutory text controls over policy preference.

It carved out pre-retirement submissions. The temporal anchor is submission, not adoption. A retiree who submitted while employed can still collect when the suggestion produces savings later. This is the right structural answer: it would be unfair to the employee to lose the award reward simply because the bureaucracy took a long time to implement the idea.

It did not bar retirees from making informal suggestions. The opinion's scope is the cash-award program. Retirees remain free to submit ideas through other channels (writing to officials, public participation forums, contacting their old agencies) without expectation of payment.

Background and statutory framework

G.S. 143-340(1) gave the Secretary of Administration the power and duty to establish a meritorious service award system for state employees' suggestions. Cash awards came from the savings resulting from adopted suggestions, capped at 25% of first-year savings or $5,000, whichever was lower.

The structural logic of the statute is classic gainsharing: when an employee's idea produces cost savings, the employee shares in the savings as an incentive. The cap mechanism limits the state's exposure to runaway payouts and aligns the program's expense with realized savings.

The Department of Administration administered the program. Eligible suggestions would be evaluated, adopted (or not), and tracked for savings. The Secretary's authority to design the specific procedures was broad; the question for the AG was about the scope of "employee" rather than about the procedure.

Common questions

What about an employee who retires after submitting but before adoption?

The opinion's logic supports payment to the retiree in this scenario. Eligibility is anchored to the submission moment. Adoption may take months or years; the retirement happening in between does not strip the original eligibility.

What about contract workers or temporary employees?

The opinion does not address non-permanent employees. The statute's text covers "state employees," which is presumably the same set treated as state employees for other personnel-administration purposes. Contract workers under personal-services contracts are typically not "state employees" in this sense.

Are there suggestion programs in individual agencies that might cover retirees?

The opinion addresses only the statewide program under G.S. 143-340(1). Individual agencies could in principle have their own informal suggestion programs, but those would not draw on the cash-award authority in this statute. An agency-funded retiree program would need its own legal basis.

What if the suggestion comes from a group that includes retirees?

The opinion does not address group submissions. If a suggestion is submitted by a team including current employees and retirees, presumably the current employees would qualify for awards and the retirees would not, but the opinion provides no clear rule.

Can a retiree be paid retroactively if the program later changes to include retirees?

The opinion does not address retroactive policy changes. Generally, eligibility for a statutory benefit is determined at the time the qualifying event occurs (submission, in this case), so a later statutory amendment broadening eligibility would typically apply prospectively unless the amendment expressly provides otherwise.

Source

• Landing page: https://ncdoj.gov/opinions/department-of-administration-state-employee-suggestion-system/

Citations

• N.C.G.S. § 143-340(1)

Original opinion text

Requested By: Jane Smith Patterson, Secretary, Department of Administration

Question: Does G.S. 143-340(1) prohibit retired state employees from participating in the State Employee Suggestion System?

Conclusion: The statute does not provide for participation by retired state employees.

G.S. 143-340(1) provides that the Secretary of Administration has the following powers and duties:

"To establish a meritorious service award system for state employees' suggestions which may include cash awards to be paid from savings resulting from the adoption of employees' suggestions, but in no case shall the cash award exceed twenty-five percent (25%) of the savings resulting during the first year following the adoption or a maximum of five thousand dollars ($5,000)."

The statute specifically establishes a system for ". . . state employee suggestions . . .". Cash awards are to be paid from savings resulting from the adoption of ". . . employee suggestions . . .".

Although it would appear that the purpose of the statute may be furthered by the participation of retired state employees in the system, the language of the statute makes no provision for such participation. It is therefore the opinion of this Office that the statute limits participation in the system to current state employees. The limitation would not, however, prohibit an award to a retiree who submitted a suggestion prior to retirement.

Rufus L. Edmisten
Attorney General

Grayson G. Kelley
Assistant Attorney General