He Took a $60,000 City Road Job With a Pension. Social Security Treated the Year Like He Never Worked.

Same Asphalt, Different Paperwork

Picture a man who spent years running a paver for a private contractor on county highways. Then a city public works position opens with better hours, stable health coverage and a real pension. He takes it. The truck he climbs into looks almost identical. Some mornings he resurfaces the same stretch of road he paved two summers earlier. The work barely changes, but the first pay stub does. A pension contribution appears. The Social Security tax disappears.

At the end of the year, he earns $60,000 building city roads. His pension credits every month. His Social Security earnings record can show zero. Same asphalt, very different retirement math.

Who Gets Left Out

Most state and local government employees participate in Social Security, but a significant share do not. A Congressional Research Service analysis using 2023 data counted roughly 22.9 million state and local government employees nationwide. About 73%, or 16.7 million workers, held Social Security coverage. The remaining 6.3 million, representing 27% of the total, worked in positions outside the system. A worker cannot identify which category his job falls into from the title, uniform or equipment alone.

The geographic concentration is striking. Eight states account for roughly 75% of all noncovered state and local government employees: California, Texas, Ohio, Massachusetts, Illinois, Colorado, Louisiana, and Georgia. California alone, where less than half of state and local workers are covered, drives a substantial portion of that total. The largest occupational groups outside the system are police officers, firefighters, and teachers.

Coverage often turns on a legal arrangement called a Section 218 agreement. These voluntary federal-state contracts allow states to extend Social Security coverage to specific groups of public workers. They cover positions, not individual employees, and as of April 1983 they are irrevocable once signed. If a public works position falls within a Section 218 agreement, Social Security tax comes out of each paycheck and the wages enter the earnings record. If it does not, membership in a qualifying public retirement system can place the position outside Social Security entirely. Workers covered by neither arrangement are generally required to participate in Social Security. In this road worker’s case, the pension is not sitting on top of Social Security. It is serving as the job’s entire retirement system.

What a Zero Does to the Record

A noncovered year does not earn Social Security credits or add wages to the retirement formula. In 2026, a worker earns one credit for each $1,890 of covered earnings, up to four credits for the year. The $60,000 city salary earns none of them. That gap matters in two distinct ways.

First, a worker generally needs 40 credits to qualify for a retirement benefit on his own record. Someone who leaves private employment with 36 credits and spends the rest of his career in a noncovered city position can remain short despite working full time for years. Second, Social Security calculates the retirement benefit using the highest 35 years of indexed covered earnings. A long stretch of noncovered government work inserts zeros into that calculation for any worker who does not have 35 covered years elsewhere in his history.

For someone who already has 40 credits and 35 strong covered years, a single noncovered year may have little or no effect on the eventual benefit. For a worker with a shorter private-sector history, the same job change can reshape the benefit significantly. The math is invisible until the worker checks his Social Security Statement and notices the missing wages.

Congress Removed the Penalty, Not the Blank Years

The Social Security Fairness Act, signed into law on January 5, 2025, eliminated the Windfall Elimination Provision and the Government Pension Offset for monthly benefits payable after December 2023, applying the repeal retroactively to January 2024. Both provisions had reduced Social Security benefits for people receiving pensions from noncovered government work. The WEP repeal raised benefits for roughly 2.1 million beneficiaries by an average of about $360 per month. The GPO repeal restored or increased benefits for approximately 770,000 additional spouse and survivor beneficiaries, with average monthly gains ranging from $700 for spouses to $1,190 for surviving spouses.

Implementation moved quickly. The SSA began adjusting monthly payments on February 25, 2025, and by July 7, 2025, had sent more than 3.1 million retroactive payments totaling $17 billion to eligible beneficiaries, completing the automated cases five months ahead of its original schedule. A smaller number of complex cases requiring manual review continued past that date.

The repeal was a meaningful win for those workers. A public pension no longer triggers those particular cuts to a worker’s own Social Security benefit or a spouse’s or survivor’s benefit. But Congress did not convert noncovered public wages into Social Security earnings. The $60,000 city salary still does not enter the worker’s record, earn credits or fill one of the 35 years used in the benefit calculation. The old rules could take away part of a benefit earned elsewhere. The new law stopped that. It did not give him credit for wages that were never covered in the first place.

Read the First Pay Stub, Not Just the Job Offer

Three quick checks can prevent a late-career surprise:

1. Ask whether the specific position is covered by Social Security. “Benefits-eligible” and “includes a pension” do not answer that question.
2. Read the first pay stub. Medicare tax without Social Security tax can signal a Medicare-only public position.
3. Review the Social Security Statement each year. Investigate missing covered wages while payroll records are still easy to find.

If the position is properly noncovered, the zero is not an error Social Security can repair. The pension credited every month he spent on the road crew. The pavement was the same. The retirement record underneath it was not.

Editor’s note: This article corrects the number of noncovered state and local government workers to 6.3 million (27% of the workforce) per Congressional Research Service data, adds geographic context on the eight states that account for roughly 75% of those noncovered positions, and updates the Social Security Fairness Act implementation section to reflect that the SSA sent more than 3.1 million retroactive payments totaling $17 billion by July 7, 2025, with average monthly benefit increases of approximately $360 for WEP-affected retirees and up to $1,190 for eligible surviving spouses.

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