Back Pay Means Fixed “Salary Loss” Only: No Overtime Awards Under RSA 273-D:3, V

Case: Appeal of N.H. Div. of State Police, 2026 N.H. 21 (N.H. May 15, 2026)

Tribunal Below: New Hampshire Personnel Appeals Board (PAB)

Parties: New Hampshire Department of Safety, Division of State Police (appellant) vs. Thomas Owens (respondent employee)

1. Introduction

This decision resolves a recurring remedial question in public-employee discipline appeals: when the Personnel Appeals Board orders reinstatement after reversing a termination, what components of compensation may be included in “back pay”?

Thomas Owens, a state trooper, was terminated in 2019 after the Division investigated him for altering a timecard to accommodate an additional extra-duty detail shift and for conduct during the investigation. The PAB reversed the termination, reinstated Owens, and imposed a 20-day suspension without pay. After later disputes over the monetary consequences of reinstatement, the PAB awarded Owens “expected and anticipated overtime back pay” for the termination period, calculated using his pre-termination overtime averages.

The Division appealed, arguing that RSA 273-D:3, V permits only “salary loss suffered” as back pay and does not authorize overtime. The Supreme Court of New Hampshire agreed, holding that the statute bars the PAB from awarding overtime as part of back pay.

2. Summary of the Opinion

The court reversed the PAB’s overtime award and remanded. Interpreting RSA 273-D:3, V, the court held that when reinstatement is ordered “without loss of pay,” the statute limits recovery to “the salary loss suffered” (minus mitigation) and that “salary loss” means an employee’s fixed, regular compensation—not overtime, which is variable and inherently uncertain.

Rule announced: Under RSA 273-D:3, V’s “without loss of pay” instruction, the PAB lacks authority to include overtime back pay in a reinstatement award; back pay is limited to the employee’s lost fixed compensation (“salary loss suffered”), subject to mitigation.

3. Analysis

A. Precedents Cited

  • Appeal of N.H. Div. of State Police, 175 N.H. 1, 4, 5-6 (2022)

    The court referenced its earlier decision affirming the PAB’s reinstatement order in Owens’ underlying discipline appeal. Although not decisive on the overtime issue, it supplies the procedural and factual baseline: reinstatement (with a 20-day suspension) was final, and the dispute shifted to the scope of back pay.

  • Appeal of N.H. Div. of State Police, 175 N.H. 229, 234 (2022)

    This case framed the standard of review in PAB appeals: the PAB’s decision stands unless “clearly unreasonable or unlawful” under RSA 541:13, but statutory interpretation is reviewed de novo. That division of labor was pivotal here because the overtime question was treated as a pure statutory-meaning issue, not a fact-bound remedial discretion issue.

  • Appeal of N.H. Div. of State Police, 171 N.H. 262, 267 (2018)

    The court relied on this interpretation of nearly identical language in the predecessor statute, RSA 21-I:58, I, to explain the remedial structure: one category of relief is mandatory (reinstatement when the action violated a statute or rule), and another is discretionary (relief in other cases). The 2026 opinion uses this framework to address—then sidestep—the parties’ dispute about whether reinstatement was mandatory or discretionary, assuming mandatory reinstatement and focusing on the statutory limits that attach to mandatory reinstatement’s “without loss of pay” clause.

  • Barry v. N.H. Dep't of Health and Human Servs., 170 N.H. 364, 368 (2017)

    Cited alongside the 2018 State Police decision to support the general proposition that the PAB’s authority depends on the statutory and rule-based posture of the case. It reinforces that remedies are not purely equitable; they are creatures of the governing statute and PAB rules.

  • Appeal of Vasquez, 175 N.H. 450, 453 (2022)

    Provides a key interpretive canon: courts presume the legislature did not enact superfluous words. The court used this to reject the employee’s argument that the PAB’s catch-all authority to “make such order as it may deem just” allows the Board to disregard the earlier mandatory limitation (“provided that the sum shall be equal to the salary loss suffered”). In other words, “just” orders must still respect the statute’s express remedial cap.

  • Appeal of Port City Air Leasing, Inc., 177 N.H. 149, 152-53 (2024), 2024 N.H. 71, ¶¶6, 10

    Cited for textualism and contextual reading principles: interpret statutory phrases within the whole statute; use dictionary definitions for undefined terms. The court employed these principles to (1) harmonize the “just” clause with the “salary loss suffered” limitation and (2) define “salary” in its “general sense” rather than a narrow annual-salary sense.

  • N.H. Municipal Workers' Comp. Fund v. Smith, 124 N.H. 526, 529 (1984)

    Used to justify referencing the reenacted statute’s current codification (RSA 273-D:3, V) after the legislature repealed RSA 21-I:58 and reenacted substantively unchanged language. This supports continuity: the court treats the remedial text as stable across recodification.

  • Clark v. N.H. Dep't of Emp't Sec., 171 N.H. 639, 642-43 (2019) and Appeal of Cass, 177 N.H. ___, ___ (2025), 2025 N.H. 51, ¶1

    These cases illustrate the PAB’s broad jurisdiction over both hourly and salaried state employees. The court used them to rebut the employee’s claim that “salary loss” is ambiguous or inapplicable to hourly workers: the statute must operate across employment types, implying “salary” is being used in a generalized sense (regular fixed compensation).

  • White v. City of Boston, 783 N.E.2d 467, 468-69 (Mass. App. Ct. 2003)

    An out-of-state decision used for a narrow proposition: overtime/detail earnings are often speculative because the need for extra services and an employee’s eligibility can change. The New Hampshire court invoked this logic to explain why “salary loss suffered” naturally excludes overtime: even consistent historical overtime does not make future overtime certain, especially after discipline-related restrictions (and here, the PAB recommended no details for 60 days).

  • Appeal of N.H. Dep't of Envtl. Servs., 176 N.H. 379, 395 (2023)

    Cited to reject reliance on “administrative gloss” (deference to a longstanding agency interpretation) when statutory text is clear. The court held that because “salary loss suffered” clearly excludes overtime, there is no room for deference to the PAB’s contrary approach.

B. Legal Reasoning

1) The remedial text is a constraint, not a suggestion.
RSA 273-D:3, V states that when the PAB finds a violation of statute or rules, the employee “shall be reinstated” and “shall be reinstated without loss of pay, provided that the sum shall be equal to the salary loss suffered” (minus mitigation). The court emphasized the mandatory force of “shall” and the limiting function of “provided that,” reading the phrase as a legislative instruction that cabins the PAB’s remedial calculation.

2) The PAB’s broad “just” power cannot nullify the specific limitation.
The statute also says the PAB “may… make such order as it may deem just.” The employee argued this allowed inclusion of overtime as a “just” make-whole remedy. The court harmonized the provisions by applying the anti-surplusage canon: the “just” clause cannot be read to erase the explicit “salary loss suffered” cap, or that cap becomes meaningless.

3) “Salary” is used in a general, cross-employee sense, not as “annual salary.”
Because RSA 273-D:3, V applies to a wide range of state employees—including hourly workers—the court concluded “salary” must mean fixed regular compensation paid on a recurring basis (e.g., hourly base pay for a standard schedule), not exclusively an annual salaried arrangement.

4) Overtime is conceptually distinct from “salary loss suffered.”
The court treated overtime as “additional payment” for excess work that fluctuates and is indeterminate. Even a strong history of overtime does not convert it into a fixed entitlement for a future period—particularly where discipline-related circumstances may reduce eligibility or availability. In that sense, overtime is not “loss suffered” in the same way as the predictable loss of base wages for the regular schedule.

5) Clear text defeats administrative gloss and limits analogies to other jurisdictions.
Because the court found the New Hampshire statute clear, it rejected arguments for deference to the PAB’s approach. It also distinguished out-of-state cases favoring overtime recovery because they did not involve statutory language that expressly constrained the back-pay calculation to “salary loss suffered.”

C. Impact

  • Back-pay awards in PAB reinstatement cases are narrowed. Agencies and employees should expect reinstatement back pay (where mandatory reinstatement applies) to cover base/regular compensation only, excluding overtime, detail pay, and other variable premium earnings—even if historically frequent.

  • Reduced uncertainty and litigation over “expected overtime.” The decision discourages battles of averaging methodologies, forecasting models, and eligibility contingencies. The court’s emphasis on overtime’s variability signals skepticism toward speculative components in reinstatement make-whole calculations.

  • Mitigation remains central, but only against “salary loss.” The statute requires subtracting “compensation earned or benefits received from any other source during the period.” The decision leaves intact the mitigation framework, while clarifying the “starting number” is base salary loss, not a broader total-compensation projection.

  • Potential legislative response or bargaining consequences. If policymakers want reinstated employees to recover overtime/detail earnings, the opinion suggests that must be done by amending RSA 273-D:3, V to broaden recoverable “loss of pay” beyond “salary loss suffered.” Separately, unions and agencies may address risk through settlement practices or contract provisions, but statutory limits will still control PAB authority.

  • Guidance beyond troopers. Although arising from state police employment, the reasoning is general: RSA 273-D:3, V is a statewide personnel statute, so the “no overtime back pay” rule is likely to apply across agencies when the same statutory reinstatement instruction governs.

4. Complex Concepts Simplified

  • PAB (Personnel Appeals Board): A state administrative tribunal that hears certain state-employee discipline appeals and can order remedies such as reinstatement.

  • Mandatory vs. discretionary relief: In some circumstances (e.g., violation of statute/rules), the PAB must reinstate. In other circumstances, it has more discretion in whether and how to grant relief. This case assumes mandatory reinstatement and focuses on what the statute then allows for back pay.

  • Back pay: Compensation awarded to make an employee financially whole for the period they were improperly out of work. Here, the court limits that concept to “salary loss suffered” (regular fixed compensation), not all forms of potential earnings.

  • Mitigation: The legal requirement that back pay be reduced by what the employee earned (or benefits received) from other sources during the separation period.

  • Administrative gloss: A doctrine under which courts sometimes respect a long-used agency interpretation of a statute. It does not apply when the statutory text is clear.

  • De novo review: The appellate court decides the legal question anew, without deferring to the agency’s legal interpretation.

5. Conclusion

Appeal of N.H. Div. of State Police, 2026 N.H. 21 establishes a clear remedial boundary for reinstatement cases under RSA 273-D:3, V: “without loss of pay” is not a license to award all forms of anticipated compensation. Instead, the statute caps back pay at “salary loss suffered,” meaning the employee’s fixed regular compensation, and excludes overtime as too variable and beyond the PAB’s statutory authority. The decision reinforces textual limits on agency remedial discretion, curbs speculative back-pay calculations, and provides statewide guidance for future PAB reinstatement awards.