In what the college president described as a “David and Goliath” situation, leaders with Southwestern Michigan College are taking on the State of Michigan over an issue they say will greatly impact the earnings of the school’s part-time student employees.

The college announced Friday that it had filed a lawsuit against the state in the Michigan Court of Claims on Thursday, over what SMC President David Mathews said is “the most egregious over-reach of state government” that he has ever seen. The suit is in response to a mandate from the Michigan Office of the Auditor General that required the Dowagiac college to enroll its part-time student workers into the state teacher’s retirement system.

The dispute followed an investigation conducted earlier this year by the OAG. Mathews was contacted by representatives with the state agency in April, who said they wanted to visit the campus for a reason they did not divulge, Mathews said.

Several weeks ago, the college was informed that the department had concluded its investigation, and said that the school must enroll its part-time student workers into the Michigan Office of Retirement Services’ public school employees retirement system.

Mathews and others with SMC objected to the decision, as part-time employees would never be enrolled long enough for their accounts to vest, the president said.

After receiving word of the agency’s ruling, Mathews contacted the firm that audits the school’s finances, Plante Moran, which told him they do not know of any other community colleges that are required to conform with such a policy.

“We think what we have been doing all along is not just logical and consistent with what other institutions are doing, it’s just common sense,” Mathews said. “You don’t enroll part-time student employees into a defined retirement plan they would never receive any benefit from.”

Around half of the college’s student body is comprised of part-time students, many of whom the school employs for various jobs around campus, Mathews said. Most of these jobs pay at or around minimum wage.

“We try to provide students with a way to make money on campus that will help them afford to stay in school,” he said. “For us to take money of out of their paychecks and place it into a system they will never see any benefits from is wrong.”

Full-time college student employees have never been required to enroll in the state’s teacher retirement system. Faculty, full-time administrators and professional staff members are given the option of enrolling in the state program or into a 401(k)-style retirement system, while full-time staff are required to participate in the retirement system, Mathews said.

The president is unaware of any other community colleges over which the OAG has imposed this ruling. He is not sure why the agency selected SMC for investigation.

After attempts to resolve the problem outside the courtroom failed, the college president said the school was left with no other recourse but to pursue legal action.

Besides opposing the financial impact it would have on part-time student employees, Mathews said the OAG’s mandate violates federal laws that prohibit colleges from withholding taxes from student employees’ pay. Case law also forbids the OAG from conducting investigative audits on community colleges, as they are considered locally-controlled entities, like cities, townships and road commissions, Mathews said.

“We think this is the right position, and the legally correct position,” he said.

Representatives with the Michigan Office of the Auditor General declined to comment on the matter, as they said they cannot discuss pending litigation with the press.