UNIONS ‑- EMPLOYEES OF POLITICAL SUBDIVISIONS ‑- DEDUCTIONS FOR PAYMENT INTO HEALTH-WELFARE TRUST FUND ‑- WAGES
A political subdivision may pay union employees the basic prevailing wage for the area including amount bargained for as health-welfare fund and with consent of the employee remit amount deducted directly to the trustee of said fund.
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August 3, 1954
Honorable Hugh H. Evans
Spokane County Court House
Spokane, Washington Cite as: AGO 53-55 No. 292
Attention: !ttMr. Robert J. McNichols , Civil Deputy Prosecuting Attorney
You have requested the opinion of this office with respect to a situation involving a collective bargaining agreement in which the employer pays the sum of 7-1/2 cents per hour per employee into a medical-hospitalization trust fund. Your inquiry is whether a county, school district or other political subdivision may pay said amount into the medical-hospitalization trust fund on behalf of employees directly employed. We set forth your specific questions as follows:
1. May a county, school district or other political subdivision when employing a member of this union consider the additional 7-1/2 cents per hour in determining and paying the prevailing area wage scale?
[[Orig. Op. Page 2]]
2. If the answer to the foregoing is in the affirmative may the political subdivision, with the permission of the employee, deduct the 7-1/2 cents per hour from the employee's wages and transmit this amount directly to the trust fund?
We answer each of the foregoing questions in the affirmative.
In addition to the facts as detailed in your letter, we have referred to correspondence of George H. Peters, Administrator of the Washington State Painters' Trust, in which he advises that the prevailing wage rate for painters in the Spokane area is $2.57-1/2 per hour basic scale, plus 7-1/2 cents health-welfare, making a total hourly wage of $2.65.
Upon these facts any contractor who successfully bids upon a public contract and employs painters is required by law to pay the prevailing wage per hour which in this case would be the total sum of $2.65 of which 7-1/2 cents would be deducted by the contract employer and remitted directly to the Painters' Trust for purposes of health-welfare.
The problem arises where a public agency employs directly part-time or full-time painter employees. In this event, is the public agency required to pay only the basic scale of $2.57-1/2 per hour or include the fringe benefit of 7-1/2 cents per hour making the total prevailing wage scale for the area?
Where the public agency must by statute pay the prevailing wage scale, we see no reason for discrimination against the employee employed directly by a public body.
RCW 39.12.010 defines "prevailing rate of wage" as follows:
"(1) The 'prevailing rate of wage,' shall be the rate of hourly wage and overtime paid in the locality to the majority of workmen, laborers, or mechanics, in the same trade or occupation. If there is not a majority in the same trade or occupation paid at the same rate, the average rate of hourly wage and overtime paid to such laborers, workmen, or mechanics [[Orig. Op. Page 3]] in the same trade or occupation shall be the prevailing rate. If the wage paid by any contractor or subcontractor to laborers, workmen, or mechanics on any public work is based on some period of time other than an hour, the hourly wage shall be mathematically determined by the number of hours worked in such period of time."
RCW 39.12.020 is quoted as follows:
"The hourly wages to be paid to laborers, workmen, or mechanics, upon all public works of the state, or any county, municipality, or political subdivision created by its laws, shall be not less than the prevailing rate of wage for an hour's work in the same trade or occupation in the locality within the state where such labor is performed. This chapter shall not apply to workmen or other persons regularly employed on monthly or per diem salary."
Since the passage of Section 1 and Section 3, Chapter 63, Laws of 1945, as quoted above, the tendency has been to recognize fringe benefits such as health-welfare provisions as a part of the basic wage. In this connection we quote from the opinion of this office dated October 19, 1953, addressed to the Honorable E. W. Anderson, Chairman, Washington Public Service Commission, in which the case ofW. W. Cross and Co., Inc. v. National Labor Relations Board, 174 F. (2d) 875, United States Circuit Court of Appeals, First Circuit, held "that the word 'wages' comprehends emoluments resulting from employment in addition to or supplementary to actual rates of pay. It then interpreted the word to mean any direct or immediate economic benefits flowing from the employment relationship, including the payment of premiums on a group insurance program. Consequently, the rule seems to be that the term 'wages' as used in the National Labor Relations Act is broad enough to include the premium cost of a group insurance program."
Therefore, a county, school district or other political subdivision may well consider that the prevailing wage per hour of a given area is the total wage including health-welfare.
[[Orig. Op. Page 4]] As to the second inquiry as to whether a city, county, school district or other political subdivision may deduct the health-welfare benefit from the employees per hour wage and remit directly to a trust fund with permission of the employee, we refer to RCW 41.04.020, quoted as follows:
"Any employee or group of employees of the state of Washington or any of its political subdivisions, or of any institution supported, in whole or in part, by the state or any of its political subdivisions, may authorize the deduction from his or their salaries or wages, the amount or amounts of his or their subscription payments or contributions to any person, firm, or corporation furnishing or providing medical, surgical, and hospital care or either of them, or life insurance or accident and health disability insurance: Provided, That such authorization by the employee or group of employees, is first approved by the head of the department, division, office, or institution of the state or political subdivision thereof, employing such person or group of persons, and filed with the state auditor, or in the case of political subdivisions of the state of Washington, with the auditor of the political subdivision or the person authorized by law to draw warrants against the funds thereof."
Also RCW 41.04.030:
"Upon being authorized by any employee or group of employees so to do under the provisions of RCW 41.04.020, the auditor or other persons authorized to draw warrants against the funds involved is authorized to draw and issue a proper warrant or warrants directly to and in favor of the person, firm, or corporation, or organization named in the authorization for the total amount authorized to be deducted from the payroll of any such office, department, division, or institution."
The first provision above is express authority for a public employing agency to deduct health-welfare benefits if permission is given by the employee. [[Orig. Op. Page 5]] The second section is derived from Section 1, Chapter 260, Laws of 1953, and for the purpose of the present inquiry grants authority to the auditor of the employing public agency to deduct from the employee's wages and allows remittance directly to the trustee designated by the employee.
We hope that the foregoing has fully answered your inquiry.
Very truly yours,
DONALD E. WATSON
Assistant Attorney General