PUBLIC WORKS ‑- CONTRACTS ‑- LABOR ‑- OUT-OF-STATE PREFABRICATION
Neither chapter 39.12 nor chapter 39.16 RCW are applicable to labor performed outside of the state of Washington under a public works contract with a state agency or political subdivision of the state of Washington.
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October 15, 1976
Honorable Nancy Buffington
State Senator, 34th District
5919 47th S.W.
Seattle, Washington 98136 Cite as: AGLO 1976 No. 63
Dear Senator Buffington:
By letter previously acknowledged you have requested our opinion with regard to the applicability of chapters 39.12 and 39.16 RCW to off-the‑job‑site prefabrication occurring ". . . outside the state of Washington . . ." in connection with a public works project entered into by an agency or political subdivision of our own state. Your specific inquiries read as follows:
"1. Chapter 39.12 RCW requires that 'the prevailing rate of wage' be paid to laborers, workmen or mechanics upon all public works for the State or its political subdivisions. Does this requirement apply to labor performed in off-the‑job‑site prefabrication of modular building units by employees of the prime contractor, subcontractors, or other persons doing or contracting to do the whole or any part of the work included in the public works project where the modular building units are being specially produced for such project and where such off-the‑job‑site prefabrication takes placein a manufactured housing plant located outside of the State of Washington?
"2. Chapter 39.16 RCW requires that the contractor or subcontractor on all public works contracts for the State or its political subdivisions employ 95% or more bona fide Washington residents where more than 40 persons are employed and 90% or more where 40 or less persons are employed. The same Chapter also requires the contractor to pay the standard prevailing wages for the specific type of construction as determined by the United States Department of Labor in the city or county where the work is being performed. Do these requirements apply to labor performed in off-the‑job‑site prefabrication of modular building units by employees of the prime [[Orig. Op. Page 2]] contractor or subcontractor where the modular units are being specially produced for the public works project, where such off-the‑job‑site prefabrication takes place in a manufactured housing plant located outside the State of Washington, and where the bordering state exemption of Section 39.16.005 is not available. In addition, with respect to the prevailing wage portion of the question, how is 'the city or county where the work is being performed' interpreted in that the public works contract is being performed partially out-of-state and partially in the city or county in the State of Washington?" (Emphasis supplied.)
We answer your first question and the initial part of your second question in the negative thereby rendering consideration of the remainder of the latter question unnecessary.
RCW 39.12.020, the principal statute involved in your first question, provides that:
"The hourly wages to be paid to laborers, workmen or mechanics, upon all public works and under all public building service maintenance contracts 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 by the state, or any county, municipality, or political subdivision created by its laws." (Emphasis supplied.)
In AGO 1967 No. 15 [[to William S. May, State Representative, on May 2, 1967]], copy enclosed, this office concluded that this statute is applicable in certain instances to off-the‑site‑prefabrication as well as to work performed on a public works project job site itself. In so concluding, however, we went on to make note of the portion of RCW 39.12.020,supra, which we have above underscored and, based thereon, we said, at page 6 of our opinion:
[[Orig. Op. Page 3]]
"In thus concluding, with respect to what we may refer to as the 'job‑site' issue, we do not mean to suggest that the situs of the work is completely material. Quite clearly, the prevailing rate of wage requirement of RCW 39.12.020, is only applicable to work performed within the state of Washington, for the reference in that statute to the prevailing rate of wage '. . . in the locality within the state where such labor is performed.'"
Although the legislature has met on several occasions since then the statute has not been changed. Accordingly, the foregoing observation regarding out-of-state work remains correct, in our judgment, thereby necessitating a negative answer to the first question contained in your present request.
In addition, you have asked us to advise you as to the applicability of RCW 39.16.005 to off-the‑job‑site prefabrication occurring outside the state of Washington. That statute, which also deals with public works projects involving the state of Washington and its various political subdivisions, reads as follows:
"In all contracts let by the state, or any department thereof, or any county, city, or town for the erection, construction, alteration, demolition, or repair of any public building, structure, bridge, highway, or any other kind of public work or improvement, the contractor or subcontractor shall employ ninety-five percent or more bona fide Washington residents as employees where more than forty persons are employed, and ninety percent or more bona fide Washington residents as employees where forty or less persons are employed. The contractor shall pay the standard prevailing wages for the specific type of construction as determined by the United States department of labor in the city or county where the work is being performed. The term 'resident', as used in this chapter, shall mean any person who has been a bona fide resident of the state of Washington for a period of ninety days prior to such employment: Provided, That in contracts involving [[Orig. Op. Page 4]] the expenditure of federal aid funds this chapter shall not be enforced in such manner to conflict with or be contrary to the federal statutes, rules, and regulations prescribing a labor preference to honorably discharged soldiers, sailors, and marines, or prohibiting as unlawful any other preference or discrimination among the citizens of The United States: Provided further, That this section shall not apply to any employees who are residents of any state bordering on the state of Washington if such bordering state does not restrict the right of a resident of Washington to be employed in the performance of all contracts let by the bordering state, or any department thereof, or any county, city, or town for the erection, construction, alteration, demolition, or repair of any public building, structure, bridge, highway, or any other kind of public work or improvement."
Unlike RCW 39.12.020,supra, this latter statute does not expressly refer only to work occurring "within the state." Nevertheless, for other reasons it is our opinion that RCW 39.16.005 should likewise not be deemed applicable to off-the‑job‑site prefabrication in another state.
First, it appears clear that RCW 39.16.005 does not purport to bar out-of-state contractors from bidding on local projects; nor does it prohibit local contractors from performing a portion of the contract outside of the state. It would therefore seem anamolous, to say the least, to read the law as nevertheless requiring Washington residents to be employed no matter where the work is performed. Instead, like similar preferential employment laws in other states which are designed only to relieve local unemployment by protecting against firms obtaining contracts for a public work within a given state and then bringing in nonresident employees to work on the project,1/ it appears more logical to read our statute as requiring only that Washington residents be preferred for work done within the state.
Such a legislative intent is also evidenced by the fact that RCW 39.16.005 is keyed to the total number of employees of the contractor or subcontractor. Ninety-five [[Orig. Op. Page 5]] percent of those employees must be Washington residents if more than forty persons are employed and ninety percent must be Washington residents if forty or less persons are employed. Yet the contractor or subcontractor involved may well have numerous employees not engaged in the particular project in question at all; e.g., workers engaged in other construction projects elsewhere, administrative personnel not related to any particular project, etc. Therefore, to avoid any obvious absurdity which would otherwise result, the statute must be read to refer only to those employees of the contractor or subcontractor who are actually engaged to do the work called for by the contract referred to in the opening sentence thereof. See, e.g.,Wilson v. Lund, 74 Wn.2d 945, 947, 447 P.2d 718 (1968), and cases cited therein.
A further point to be noted in this same connection has to do with so much of RCW 39.16.005 as says:
". . . The term 'resident', as used in this chapter, shall mean any person who has been a bona fide resident of the state of Washington for a period of ninety days prior to such employment: . . ."
Again, the concept thus appears to be one of employment to do work on a specific public work or improvement. In order to be employed for, or assigned to, that project the employee (if within the ninety or ninety-five percent quotas) must have been a Washington resident for at least ninety days prior to ". . . such employment."2/ Yet many employees of the contractor or subcontractor who is covered by the statute will, presumably, have been hired long before ‑ either in connection with some other project or simply as a part of the general labor force of their employer. Did the legislature really intend to say that these employees, even though they may have been bona fide Washington residents for more than ninety days prior to their assignment to the project in question, may not legally be employed thereunder unless, in addition, they were also Washington residents for at least ninety days prior to the time that they were thus initially hired? We think not ‑ likewise because of the incongruity of such a literal reading of the statute. Instead, we believe that it is merely the residential status of an employee at the time of his employment for, or assignment to, the particular project which is material.
We nevertheless recognize, of course, that neither of these two last discussed factors by themselves requires a negative answer to your second question; i.e., by effectively [[Orig. Op. Page 6]] barring any possible application of RCW 39.16.005 to off-the‑job‑site prefabrication in another state when performed with specific reference to a public work project within our own state to which the statute would otherwise apply. Instead, these factors and our resulting construction of the statute as only being applicable to the act of employing or assigning persons to work on a specific public work or improvement merely mean that, as a practical matter, the actual occurrence of a violation would be somewhat unlikely in the context of off-the‑job‑site prefabrication occurring in some other state. Whether within our own state or elsewhere, for that matter, most individuals employed to work on the production of modular units or other prefabricated structures are, presumably, hired as a part of their employer's general work force rather than for a specific project. In all probability they are in fact working on several projects at any given time ‑ within the manufacturing plant at which they are employed. Thus, even though some of the units upon which they are working are specifically designed for a public work or improvement in the state of Washington the workers involved are, in most cases, not employed particularly to work on those units.
But even if, in a given instance, the nonresident workers involved are so employed, there is one further, and we think, decisive factor to be considered in terms of the applicability of RCW 39.16.005, supra, if that employment occurs in another state. Simply stated, although this does not appear from the terms of RCW 39.16.005 itself, any violation of that statute constitutes the commission of a crime. This is so because of RCW 39.16.040 which covers all of chapter 39.16 RCW and provides that:
"Any person, firm or corporation violating any of the provisions of this chapter shall be guilty of a misdemeanor."3/
[[Orig. Op. Page 7]]
In other words any contractor or subcontractor, for example, who employs nonresidents of Washington when required by RCW 39.16.005 to employ residents instead is, among other things,4/ guilty of criminal conduct for which he or it may be punished by a fine or even a term in jail.5/ This, in turn, means two separate things as far as a proper construction of the statute is concerned. First, under well-established principles it means that RCW 39.16.005 is to be strictly construed against the state and in favor of an accused contractor (no matter where the alleged violation is said to have occurred) to the end that activities not clearly intended to be included within the ambit of the statute shall not be prosecuted. See, e.g.,Marble v. Clein, 55 Wn.2d 315, 347 P.2d 830 (1959), and cases cited therein. But secondly and more importantly (from the standpoint of your present question) it means that if the alleged violation occurred entirely outside of the state of Washington the contractor may not be prosecuted for it at all since, as explained in 21 Am.Jur.2d, Criminal Law, §§ 383-4:
"It is fundamental that jurisdiction in criminal matters rests solely in the courts of the state or country in which the crime is committed and that the laws of each state or country exclusively govern the nature of the offense.
". . .
"The courts of one state or country will not execute the penal or criminal laws of another state or country, for such laws are deemed to be strictly local and distinquishable from obligations under foreign statutes of a purely contractual, rather than penal, nature. A local criminal statute has no extraterritorial operation, and a party cannot be indicted in the United States for what he did in a foreign country."
[[Orig. Op. Page 8]]
Accord,State v. Ladely, 82 Wn.2d 172, 509 P.2d 658 (1973); cf.,State v. Klein, 4 Wn.App. 736, 484 P.2d 455 (1971), in the absence of some special statute to the contrary. Thus, for example, a prefabricator of modular building units in California who is making such units pursuant to a public works contract with a Washington municipality could not be prosecuted under RCW 39.16.040 for his use of California rather than Washington workers by either a Washington court (because the offense would not have occurred here) or a California court (because the conduct would not be criminal under the laws of that state).
As far as the significance of this point in terms of statutory construction is concerned,
"A familiar and fundamental rule for the interpretation of a statute is that it is presumed to have been enacted in the light of existing judicial decisions that have a direct bearing upon it. In re Moffitt's Estate, 153 Cal. 359, 95 Pac. 653, 20 L.R.A. (N.S.) 207 (1908). SeeState v. Berry, 200 Wash. 495, 93 P.2d 782 (1939);In re Big Blue Min. Co., 16 F.Supp. 50 (1936); 50 Am.Jur., Statutes § 321. . . ." Kelso v. Tacoma, 63 Wn.2d 913, 917, 390 P.2d 2 (1964).
Thus, the legislature which enacted RCW 39.16.005 must be presumed to have known that it could not be enforced as a criminal statute in the case of an out-of-state violation. In the final analysis, coupled with the other reasons above indicated, it therefore seems to us highly unlikely that the legislature intended it to reach such cases ‑ even though, admittedly, the civil penalty provided for by RCW 39.16.030, supra, would still be available. At least we must on that basis express a substantial doubt as to the supportability of a contrary conclusion.
We trust that the foregoing will be of some assistance to you.
Very truly yours,
PHILIP H. AUSTIN
Deputy Attorney General
*** FOOTNOTES ***
1/See, 64 Am.Jur.2d, Public Works and Contracts, § 94 and People ex rel. Holland v. Bleigh Construction Co., 61 Ill.2d 258, 335 N.E.2d 469, 478 (1975).
2/Unless, of course, he falls under the "border state" exemption contained in the last proviso to RCW 39.16.005, supra.
3/In so concluding we are aware that RCW 39.16.005 was not, itself, a part of the original 1943 law by which what is now RCW 39.16.040 was originally enacted, chapter 246, Laws of 1943. See, chapter 28, Laws of 1972, Ex. Sess. Instead, the counterpart substantive requirement in the original act was contained in RCW 39.16.010, which was repealed by chapter 28,supra, and replaced with RCW 39.16.005. Nevertheless we would view this as merely a matter of form. In substance, as will readily be seen by comparing former RCW 39.16.010 with present RCW 39.16.005, the latter really constitutes nothing more than an amendment to the former. Hence, we have no doubt that a court would hold RCW 39.16.040, supra, to be applicable to the present statute as well.
4/See, also, RCW 39.16.030 which imposes a civil penalty as well in the form of a deduction from the amount due under the contract involved.
5/See, RCW 9.92.030 which provides that:
"Every person convicted of a misdemeanor for which no punishment is prescribed by any statute in force at the time of conviction and sentence, shall be punished by imprisonment in the county jail for not more than ninety days, or by a fine of not more than two hundred and fifty dollars."