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AGO 1975 No. 9 - May 01, 1975
AGO Opinion Header Image
Slade Gorton | 1969-1980 | Attorney General of Washington

LABOR ‑- CONTRACTS ‑- PUBLIC WORKS ‑- STANDARDS FOR DETERMINING WAGE ‑- FRINGE BENEFITS

The requirement of chapter 39.12 RCW that the "prevailing rate of wage" be paid to laborers, workmen or mechanics upon all public works of the state, or any county, municipality, or political subdivision, does not necessitate that such persons employed subject to its provisions be provided with actual "bona fide fringe benefit programs" so long as wages are paid in an amount which includes the prevailing costs of such programs as are identified in RCW 39.12.010.

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                                                                    May 1, 1975

Honorable Rick S. Bender
State Representative, First District
Legislative Building
Olympia, Washington 98504

                                                                                                                   Cite as:  AGO 1975 No. 9

Dear Sir:

            By letter previously acknowledged you have requested an opinion of this office on a question which we paraphrase as follows:

            Does chapter 39.12 RCW, relating to public works contracts, require that laborers, workmen or mechanics employed subject to its provisions be provided with actual "bona fide fringe benefit programs"?

            We answer this question in the negative for the reasons set forth in our analysis.

                                                                     ANALYSIS

            In 1945 our legislature enacted a statute providing for the payment of the prevailing rate of wages to persons employed upon public works within this state.  In pertinent part this act provided that:

            "The hourly wages to be paid to laborers, workmen or mechanics, upon all public works of the state or any county, municipality or political  [[Orig. Op. Page 2]] 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. . . ."1/

             The term "prevailing rate of wage" for the purposes of the act was defined as:

            ". . . the rate of hourly wage and overtime paid in the locality, as hereinafter defined, to the majority of workmen, laborers, or mechanics, in the same trade or occupation.  In the event that there is not a majority in the same trade or occupation paid at the same rate, then the average rate of hourly wage and overtime paid to such laborers, workmen or mechanics 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 for the purposes of this act shall be mathematically determined by the number of hours worked in such period of time."2/

             This definition, however, was later amended in 1965.3/ As now codified in RCW 39.12.010(1), it currently reads as follows:

            "The 'prevailing rate of wage', for the intents and purposes of this chapter, shall be the rate of hourly wage, usual benefits, and overtime paid in the locality, as hereinafter defined, to the majority of workmen, laborers, or mechanics, in the same trade or occupation.  In the event  [[Orig. Op. Page 3]] that there is not a majority in the same trade or occupation paid at the same rate, then the average rate of hourly wage and overtime paid to such laborers, workmen or mechanics 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 for the purposes of this chapter shall be mathematically determined by the number of hours worked in such period of time."  (Amendatory language underscored.)

            The term "usual benefits," in turn, is defined by RCW 39.12.010(3)4/ as follows:

            "The 'usual benefits' for the purposes of this chapter shall include the amount of:

            "(a) The rate of contribution irrevocably made by a contractor or subcontractor to a trustee or to a third person pursuant to a fund, plan, or program; and

            "(b) The rate of costs to the contractor or subcontractor which may be reasonably anticipated in providing benefits to workmen, laborers, and mechanics pursuant to an enforcible commitment to carry out a financially responsible plan or program which was communicated in writing to the workmen, laborers, and mechanics affected, for medical or hospital care, pensions on retirement or death, compensation for injuries or illness resulting from occupational activity, or insurance to provide any of the foregoing, for unemployment benefits, life insurance, disability and sickness insurance, or accident insurance, for vacation and holiday pay, for defraying costs of apprenticeship or other similar programs, or for other  [[Orig. Op. Page 4]] bona fide fringe benefits, but only where the contractor or subcontractor is not required by other federal, state, or local law to provide any of such benefits."

            The substantive requirements of this law have remained basically the same since 1945, although § 1,supra, was amended in 1967 to require that the prevailing rate of wage also be paid to workers under all public building service maintenance contracts.5/

             The 1965 amendment of our law to include consideration of "usual benefits" followed closely in time as well as in language certain changes in the federal Davis-Bacon Act (40 U.S.C. §§ 276-a-5) which were enacted by Congress in 1964.  That federal act specifies the rate of wages to be paid to laborers and mechanics upon public buildings or public works of the United States and the District of Columbia.  Prevailing wages were stated by the 1964 amendment (Pub. L. No. 88-349) to include not only the hourly rate of pay but, in addition:

            "'(2) the amount of‑-

            "'(A) the rate of contribution irrevocably made by a contractor or subcontractor to a trustee or to a third person pursuant to a fund, plan, or program; and

            "'(B) the rate of costs to the contractor or subcontractor which may be reasonably anticipated in providing benefits to laborers and mechanics pursuant to an enforcible commitment to carry out a financially responsible plan or program which was communicated in writing to the laborers and mechanics affected,

            for medical or hospital care, pensions on retirement or death, compensation for injuries or illness resulting from occupational activity, or insurance to provide any of the foregoing, for unemployment benefits, life  [[Orig. Op. Page 5]] insurance, disability and sickness insurance, or accident insurance, for vacation and holiday pay, for defraying costs of apprenticeship or other similar programs, or for other bona fide fringe benefits, but only where the contractor or subcontractor is not required by other Federal, State, or local law to provide any of such benefits:'"

            However, unlike our statute the federal law then goes on to provide that:

            "'. . . the obligation of a contractor or subcontractor to make payment in accordance with the prevailing wage determinations of the Secretary of Labor, insofar as . . . [sections 276a to 276a-5 of this title and other Acts incorporating sections 276a to 276a-5 of this title] by reference are concerned may be discharged by the making of payments in cash, by the making of contributions of a type referred to in paragraph (2)(A), or by the assumption of an enforcible commitment to bear the costs of a plan or program of a type referred to in paragraph (2)(B), or any combination thereof, where the aggregate of any such payments, contributions, and costs is not less than the rate of pay described in paragraph (1) [the basic hourly rate of pay] plus the amount referred to in paragraph (2).'"6/

             Thus, it will be seen that although the "usual benefits" amendment to our prevailing wage law was quite similar to this fringe benefit provision of the amended Davis-Bacon Act, our legislature did not specifically adopt the additional language of the federal act which provides that payment in accordance with the prevailing wage determination may be made in the form, basically, of cash, contributions to a particular plan or program, or any combination thereof.

             [[Orig. Op. Page 6]]

            In order to determine the manner in which the "prevailing rate of wage" requirement of chapter 39.12 RCW can be satisfied, we must first look to the express provisions of our statute.  Like the plain language of the Davis-Bacon Act, our act also, arguably, provides by its terms the method by which any contractor or subcontractor may comply.  If the language of a statute is plain, free from ambiguity, and devoid of uncertainty, there is no room for construction.  Krystad v. Lau, 65 Wn.2d 827, 844, 400 P.2d 72 (1965).  A reading of all the provisions of chapter 39.12 RCW reveals clearly that employers are not necessarily required thereby to provide actual "bona fide fringe benefitprograms" for laborers, workmen or mechanics employed on public works or public building service maintenance contracts ‑ so long as their cost equivalent is paid in the form of wages.

            The substantive requirement of the prevailing wage statute, as noted above, is RCW 39.12.020.  Both prior to and subsequent to the inclusion of "usual benefits" in the definition section of the chapter, this statute required and still requires that certainhourly wages be paid to workers on public works projects.  This term clearly does not comprehend that programs must be provided in addition.  The emphasis upon "wages" is even more pronounced when we consider the number of instances that this word appears elsewhere in chapter 39.12 RCW.  The terms "hourly wage," "hourly wages," "hourly rate," "hourly minimum rate of wage," or "rate of hourly wage" appear, as they did prior to the "usual benefits" amendment in 1965, in RCW 39.12.010, 39.12.020, 39.12.021, 39.12.030, and 39.12.040.

            The definition of the "prevailing rate of wage" in RCW 39.12.010(1),supra, speaks in terms of the rate of hourly wage, usual benefits, and overtime paid.  In the event that there is not a majority in the same trade or occupation paid at the samerate, then the average rate of hourly wage and overtime paid to such workmen in the same trade shall be the prevailing wage.  RCW 39.12.010(1).  Continually, then, the emphasis remains clearly upon a rate of pay and not upon fringe benefit plans or programs to be provided in kind.  The 1965 amendment including "usual benefits" was, as noted, worded so as to read "the rate of . . . usual benefits."  Further, "usual benefits" for purposes of the  [[Orig. Op. Page 7]] act was defined to include the amount of the rate of contribution irrevocably made to a trustee pursuant to a fund, plan, or program and the rate of costs reasonably anticipated in providing benefits to workmen for medical or hospital care, pensions, or for other bona fide fringe benefits.  RCW 39.12.010(3).  The statute plainly does not specifically require that the employer must establish fringe benefit programs, but rather that the worker must be paidwages at a "rate" computed with consideration given to "the amount of the rate of contribution" and the "rate of costs" of the benefit programs.  Certainly, if it were intended that "usual benefits" meant the establishment of usual benefitplans, language could easily have been drafted to reflect that intent.

            RCW 39.12.010(2)(b)does speak of plans or programs communicated in writing to the workmen.  However, this language is not inconsistent with a conclusion that "bona fide fringe benefit programs" need not be established in kind by the terms of chapter 39.12 RCW.  The "prevailing rate of wages" includes the rate for usual benefits paid in the locality to the majority of workmen, laborers, or mechanics in the same trade or occupation.  When computing what those "usual benefits" are for the majority of the workmen in the locality, all that is to be considered is the amount of the rate of costs which may be reasonably anticipated in providing benefits to workmen pursuant to an enforceable commitment to carry out a financially responsible plan or program which was communicated in writing to such workmen.  In effect, the statute,as does the Davis-Bacon Act, specifies the types of fringe benefit programs in a locality which are to be considered in computing the "prevailing rate of wage," but the 1965 amendment does not require that such programs be established.7/

             Finally, we are advised also that our state department of labor and industries, since the 1965 amendment, has consistently interpreted the law as not requiring actual fringe  [[Orig. Op. Page 8]] benefit programs if additional sums equal to the cost of such programs are paid in the form of wages.  Assuming, arguendo, that the statute is ambiguous, such a longstanding administrative construction should be given great weight.  Anderson v. O'Brien, 84 Wn.2d 64, 68, 524 P.2d 390 (1974).  The Washington legislature has not amended the statute since 1965 with the exception of the inclusion of public building service contracts in 1967.  The persuasive force of a consistent administrative interpretation is "strengthened when the legislature, by its failure to amend or by amending some other particular without repudiating the administrative construction, silently acquiesces . . ." in that administrative interpretation.  Bradley v. Dept. Labor & Ind., 52 Wn.2d 780, 786-87, 329 P.2d 196 (1958).  Here our legislature appears to have acquiesced in the department's construction of the 1965 amendment to RCW 39.12.010.  Further, the department's interpretation has existed for some ten years without court challenge.  It has in a practical sense been accepted or acquiesced in by business and labor as a correct interpretation of the statute.

            This interpretation accords with the fundamental purpose of the parallel Davis-Bacon Act.  In amending the federal act in 1964, Congress recognized that fringe benefits must be reflected in prevailing wage determinations if the underlying principle of the Davis-Bacon Act ‑ that government funds should not be used to depress prevailing local wage standards on government supported construction work ‑ was to continue to have real meaning.  It was intended that those contractors (and their employees) who pay in the aggregate an hourly wage and benefit increment greater than the hourly wage paid by other contractors without such benefit plans should not be at a disadvantage in bidding and securing public contracts.  Congress achieved this purpose by requiring that the prevailing fringe benefits in a given locality must be considered and that employers fund those benefit programs or pay their workers the equivalent costs of such funding.  (Senate Report No. 963, 1964, U.S. Code Cong. & Adm. News, pp. 2339-2346.)  The department's interpretation of our state law achieves the purpose in a like manner.

                        SUMMARY

            In summary, then, we do not believe that chapter 39.12 RCW requires that laborers, workmen, or mechanics employed  [[Orig. Op. Page 9]] pursuant to all public works and public building service maintenance contracts subject to its provisions be provided with "bona fide fringe benefit programs," in kind, so long as wages are paid in an amount which includes the prevailing costs of such programs.

            We trust the foregoing will be of assistance to you.

Very truly yours,


SLADE GORTON
Attorney General


DAVID W. ROBINSON
Assistant Attorney General

                                                         ***   FOOTNOTES   ***

1/Section 1, chapter 63, Laws of 1945.

2/Section 3(a), chapter 63, supra.

3/Section 1, chapter 133, Laws of 1965, Ex. Sess.

4/Also enacted as a part of this same 1965 amendment.

5/Section 1, chapter 14, Laws of 1967, Ex. Sess., now RCW 39.12.020.

6/40 U.S.C. § 276a(b).

7/As a practical matter, there exists a question as to the feasibility of establishing, funding, or otherwise incurring obligations for such benefit plans merely to the extent of a particular employer's public contract activity ‑ which may be limited.

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