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ArtIII.S1.10.3.2 Compensation Clause Doctrine and Practice

Article III, Section 1:

The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour, and shall, at stated Times, receive for their Services, a Compensation, which shall not be diminished during their Continuance in Office.

The Compensation Clause allows Congress to increase judicial salaries, but not to decrease them. During the Great Depression, Congress enacted appropriations legislation reducing “the salaries and retired pay of all judges (except judges whose compensation may not, under the Constitution, be diminished during their continuance in office)” by a fixed amount.1 The statute avoided constitutional issues by expressly incorporating the limits of the Compensation Clause, but it sparked Supreme Court litigation to determine which federal judges were subject to the salary reduction. Ultimately, the Court held that judges of the District of Columbia courts were Article III judges who enjoyed constitutional salary protection and could not be subject to the statute.2 On the other hand, the Court held that judges of the Court of Claims, a legislative court, could have their salaries reduced.3

Once a judicial salary increase has gone into effect, the Compensation Clause bars Congress from reducing or rescinding any part of the increase. However, Congress may alter a promised future increase before it becomes effective. Thus, in United States v. Will, the Court held that Congress could repeal or modify a statutorily defined formula for annual cost-of-living increases to the compensation of federal judges, but must act with respect to any particular increase before the increase takes effect.4 To illustrate, in one of the years at issue in Will, a planned salary increase took effect on October 1, but the President signed a bill reducing the amount that same day. The Court held that the increase had gone into effect by the time the reduction was signed, rendering the reduction invalid.5 Moreover, although the salary reductions in Will applied to various officials in all three branches of government, the Court further held that even a general, nondiscriminatory salary reduction, affecting judges but not aimed solely at them, is covered by the Compensation Clause.6

A separate question that has sparked Supreme Court litigation is whether the Compensation Clause limits Congress’s power to increase the amount of federal income tax Article III judges pay. In Evans v. Gore, the Court invalidated the application of a 1919 income tax law to a sitting federal judge.7 The Court extended that ruling in Miles v. Graham to exempt the salary of a judge of the Court of Claims appointed after the enactment of the relevant tax law.8 In the 1939 case O’Malley v. Woodrough, the court disapproved of Evans and effectively overruled Miles, upholding a provision of the Revenue Act of 1932 that extended application of the income tax to salaries of judges taking office after June 6, 1932.9 The Court regarded the tax neither as an unconstitutional diminution of the compensation of judges nor as an encroachment on the independence of the judiciary.10 To subject judges who take office after a stipulated date to a nondiscriminatory income tax, said the Court, “is merely to recognize that judges are also citizens, and that their particular function in government does not generate an immunity from sharing with their fellow citizens the material burden of the government whose Constitution and laws they are charged with administering.” 11

The Court formally overruled Evans in the 2001 case United States v. Hatter.12 The Hatter Court reaffirmed the principle that judges should “share the tax burdens borne by all citizens,” 13 holding that “the potential threats to judicial independence that underlie [the Compensation Clause] cannot justify a special judicial exemption from a commonly shared tax.” 14 The Court held that the Medicare tax, which was extended to all federal employees in 1982, was a non-discriminatory tax that could be applied to federal judges.15 By contrast, the Court ruled that the 1983 extension of a Social Security tax to then-sitting judges violated the Compensation Clause, because judges were required to participate while almost all other federal employees were given a choice about participation.16 Nor had Congress cured the constitutional violation by a subsequent enactment that raised judges’ salaries by an amount greater than the amount of Social Security taxes that they were required to pay.17

Legislative Appropriation Act of June 30, 1932, ch. 314, 47 Stat. 382, 401. back
O’Donoghue v. United States, 289 U.S. 516 (1933). Congress later established two sets of courts in the District: federal courts created pursuant to Article III and local courts equivalent to state and territorial courts, created pursuant to Article I. For further discussion of the constitutional status of the District of Columbia Courts, see ArtIII.S1.9.4 District of Columbia and Territorial Courts. back
Williams v. United States, 289 U.S. 553 (1933). But see Glidden Co. v. Zdanok, 370 U.S. 530 (1962). back
449 U.S. 200 (1980). back
Id. at 224–25. back
Id. at 226. back
253 U.S. 245 (1920). back
268 U.S. 501 (1925). back
307 U.S. 277 (1939). back
Id. at 278–82. back
Id. at 282. back
532 U.S. 557 (2001). back
Id. at 571. back
Id. back
Id. at 572. back
Id. back
Id. at 578–81. back