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AGO 1967 No. 15 - May 02, 1967
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John J. O'Connell | 1957-1968 | Attorney General of Washington


LABOR - CONTRACTS - PUBLIC WORKS - APPLICATION OF PREVAILING WAGE LAW TO PREFABRICATION - STANDARDS FOR DETERMINING PREVAILING WAGE.

(1) 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, is applicable to labor performed in off-the job site prefabrication by employees of the prime contractor, subcontractors, or other persons doing or contracting to do the whole or any part of the work contemplated by the contract -provided that the prefabricated "item or member" is produced specially for the particular public works project and not merely as a standard item for sale on the general market.

(2) All determinations of the prevailing rate of wage shall be made by the industrial statistician of the department of labor and industries.

(3) The standards to be used in determining the prevailing rate of wage are set forth in full in RCW 39.12.010.

                                                              - - - - - - - - - - - - -

                                                                    May 2, 1967

Honorable William S. May
State Representative, 3rd District
West 711 Waverly Place
Spokane, Washington

                                                                                                                 Cite as:  AGO 1967 No. 15

Dear Sir:

            We are writing in response to your request for our opinion on several questions pertaining to chapter 39.12 RCW, which requires the payment of prevailing wages upon public works We paraphrase your questions as follows:

            (1) To what extent are the provisions of chapter 39.12 RCW applicable to such items as precast beams, wall panels, roof and floor slabs, cabinets and other prefabricated items project?

            (2) Under what conditions does chapter 39.12 RCW apply to contractors, subcontractors, suppliers and other persons?

            (3) Who has the duty to determine the prevailing wage rate and the extent of its application?

             [[Orig. Op. Page 2]]

            (4) What are the standards for such a determination?

            We answer your questions as set forth in our analysis.

                                                                     ANALYSIS

            At the outset we will quote the pertinent language from the applicable statutes, all of which were originally enacted as a part of chapter 63, Laws of 1945, and are now codified as chapter 39.12 RCW.  RCW 39.12.020 provides:

            "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, shallbe 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.)1/

             The basic definition of "prevailing rate of wage" appears in RCW 39.12.010 (1) as follows:

            "(1) 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. . . ."

            Subsection (2) of this same statute defines "locality" as  [[Orig. Op. Page 3]] meaning

            ". . . the largest city in the county wherein the physical work is being performed."

            In implementation of the requirements set forth in RCW 39.12.020, the legislature by RCW 39.12.030, has provided that:

            "The specifications for every contract for the construction, reconstruction, maintenance or repair of any public work . . . shall contain a provision stating the hourly minimum rate of wage, not less than the prevailing rate of wage, which may be paid to laborers, workmen or mechanics in each trade or occupation required for such public work employed in the performance of the contract either by the contractor, subcontractor or other person doing or contracting to do the whole or any part of the work contemplated by the contract, and the contract shall contain a stipulation that such laborers, workmen or mechanics shall be paid not less than such specific hourly minimum rate of wage."  (Emphasis supplied.)

            Finally, in so far as is material to a consideration of the questions which you have asked, RCW 39.12.070 provides, in part:

            "Before payment is made . . . it shall be the duty of the . . . person charged with the custody and disbursement of . . . funds, applicable to the contract . . . to require the contractor and each and every subcontractor from the contractor or a subcontractor, to file a statement in writing . . . certifying the rate of hourly wage paid each classification of laborers, workmen or mechanics employed by him upon such work, and further certifying that no laborer, workman or mechanic employed by him upon such public work has been paid less than the prevailing rate of wage . . ."

            Questions (1) and (2):

            Your first two questions appear to have arisen as a consequence of the practice of prefabrication in the construction industry.  In particular, you have referred to the construction or manufacture of major structural parts of buildings taking place at sites away from the actual building or other capital improvement under construction.  Your request presents the question of whether the basic statutory requirement of payment of the  [[Orig. Op. Page 4]] "prevailing rate of wage" to "laborers, workmen or mechanics, upon all public works of the state or any county, municipality or political subdivision . . ." applies in the case of those laborers, workmen or mechanics engaged in such prefabricating activities.

            In seeking to answer this ultimate question, we believe that we must consider the applicability of the "prevailing rate of wage" requirement from several distinct standpoints.  Quite clearly, the first issue which must be resolved is whether the construction or manufacturing work in question must physically be performed on the public works job site itself in order for the "prevailing rate of wage" requirement to be applicable.  The point to be isolated and examined is whether the phrase ". . . upon all public works of the state or any county, municipality or political subdivision . . ." (emphasis supplied), as contained in RCW 39.12.020, limits the applicability of this requirement to wages paid to laborers, workmen or mechanics only to the extent of work which is performed on the actual project site.

            It must be noted, in considering this question, that the pertinent provisions of our statute have never been interpreted by the Washington supreme court.  Thus, the question would be one of first impression for the supreme court in our state.

            However, research has disclosed a number of decisions by courts of other jurisdictions regarding the application of similar prevailing wage laws to work performed at locations away from the public works project site.  In some of these cases, the prevailing wage requirements have been denied on the basis that the function of the particular workmen was simply the production of materials purchased by the public works contractor for use in the construction of the public works project itself.  In other instances, however, the denial of coverage under the statutes has been specifically premised on the fact that the work in question was performed away from the project site - without regard to the nature of the work.  See and compare,Pacific Manufacturing Co. v. Leavy, Cal. 58 P.2d 1292 (1936);Garofano Constr. Co. v. City of New York, 43 N.Y.S.2d 26 (1943);Bohnen v. Metz, 111 N.Y.S. 196, 87 N.E. 1115 (1908);Ewen v. Thompson-Starrett Co., 208 N.Y. 245, 101 N.E. 894 (1913);Callaway v. Downing Co., 53 Del. 493, 172 A.2d 260 (1961);Clymer v. Zane, 128 Ohio 359 [[128 Ohio St. 359]], 191 N.E. 123 (1934); andAllen Co., Inc. v. Eden, Ky. 267 S.W.2d 714 (1954).

            We note that many of these cases from other jurisdictions which have (for one reason or another) denied applicability of a prevailing rate of wage law to off-the job site work are fairly old decisions.  To a large extent, they predate the modern trend toward off-the job site prefabrication.  Nevertheless, since there are some similarities between the wording of our statute  [[Orig. Op. Page 5]] and that of the acts involved in various of these out-of-state decisions denying the applicability of prevailing wage requirements to any work (regardless of nature) performed away from the project site, it could be argued that those decisions would be applicable to our statute.

            Thus, we cannot be certain of the result which would be reached by our court were it called upon to decide this aspect of the question.  However, after a full consideration of our own statutes, read in the light of the cases from other jurisdictions, it is our best judgment that the ruling of our court would be to the effect that the pertinent provisions of the law do extend to at least certain activities pertaining to a public work project which are performed away from the actual project site.

            A fundamental rule of statutory construction is that a statute must be construed as a whole in ascertaining the legislative purpose so that the spirit or the purpose of the legislation shall prevail over express but inept language, if any.  Alderwood Water Dist. v. Pope & Talbot, Inc., 62 Wn.2d 319, 321, 382 P.2d 639 (1963).  The legislation presently before us must therefore be considered in its entirety to determine the legislative intention, considering the context and subject matter of the legislation, as well as what is said.  Hatzenbuhler v. Harrison, 49 Wn.2d 691, 697, 306 P.2d 745 (1957).

            The statute refers to "public works," "public works projects," and the "construction, reconstruction, maintenance or repair of a public work."  Thus, it appears that the phrase "public works," as used in the statute, refers to contracts related to specific public building projects.  Stetson v. Seattle, 74 Wash. 607, 616, 134 Pac. 494 (1913); Carter v. Denver, 114 Colo. 33, 160 P.2d 991 (1945).  Therefore, it certainly would be possible to adopt the "job site" approach which come other courts have taken in the cases previously noted, and resolve your questions simply on that basis.

            However, to do so would be, in our opinion, to place undue emphasis on the phrase "upon all public works," appearing in RCW 39.12.020, and to ignore, or at least under-emphasize, the broader language appearing in RCW 39.12.030.  This latter statute, it will be recalled, deals with matters which must be set forth in the specifications for every contract for the construction, reconstruction, maintenance or repair of any public work, and requires that these specifications

            ". . . shall contain a provision stating the hourly minimum rate of wage, not less than the  [[Orig. Op. Page 6]] prevailing rate of wage, which may be paid to laborers, workmen or mechanics in each trade or occupation required for such public workemployed in the performance of the contract either by the contractor, subcontractor, or other person doing or contracting to do the whole or any part of the work contemplated by the contract, . . ."  (Emphasis supplied.)

            There certainly is no requirement in this statute that the laborers, workmen or mechanics, in order to benefit from the "prevailing rate of wage" requirement, be actually physically employed on the project site itself.  It is sufficient, for purposes of this statute, that they be "employed in the performance of the contract."2/

             Giving effect to this provision, it follows that the word "upon" as used in RCW 39.12.020, should not be regarded as limiting the application of the "prevailing rate of wage" act to work at the site of the project.  Instead, we would regard the word "upon" as being used to describe a function -a "connection or employment or activity with or in regard to something."  See, Webster's New International Dictionary, 3rd ed., "upon" and "on."  A person may, therefore, be employed "upon" a public works project without being employed at the site of the project itself.3/

             Having determined that the "prevailing rate of wage" requirement of our statute can be said to apply to laborers, workmen and mechanics engaged in work off the project site as well as on the project site, the next question to be explored relates to the nature of the prefabrication work in question in terms of its relation to the particular public works project.  In considering this question, we will be limited to the suggestion of criteria which would appear to be pertinent in determining  [[Orig. Op. Page 7]] whether particular off-the job site work is covered by our prevailing rate of wage law.  Of course, the applicability of the prevailing wage requirement to particular situations will depend upon the material facts of the specific employment.

            The first point to be noted is that the subject matter of chapter 39.12 RCW pertains to the wages to be paid for labor; it has no application to the price to be paid for materials.  Therefore, it would clearly be beyond the scope of the act to apply its provisions to laborers, workmen and mechanics engaged in the production of standard materials, such as door hinges, locks, and so forth which in terms of the public works contract are simply materials purchased by the contractor or subcontractors for use on the public works project.  Here, the labor is performed without any reference to a particular project; it is simply labor performed in the production of standardized prefabricated items whch are susceptible to use in any construction project, whether it be a public works project or a construction project of private enterprise.

            However, a different situation is presented in the case of prefabrication of component parts of a specific public works project.  Here, the labor expended in the production of such materials is more closely related to the contract for public works than when the materials are only standard items.

            Again, as in the case of the first issue above discussed, we must attach some significance to the provisions of RCW 39.12.030, which require that a minimum wage, not less than prevailing, be paid to those laborers, workmen or mechanics who are

            ". . . employed in the performance of the contract either by the contractor, subcontractor or other person doing or contracting to do the whole or any part of the work contemplated by the contract . . ."

            We have previously concluded that, by virtue of this provision, certain work of laborers, workmen or mechanics is subject to "prevailing rate of wage" requirements even though performed away from the project site.  However, it is to be seen that the work or labor, in order to be thus covered, must be

            (1) work or labor done in the performance of a ". . . contract for the construction, reconstruction, maintenance or repair of any public work . . ."

            (2) performed by a laborer, workman, or mechanic who is employed in the performance of the contract by the prime contractor, a subcontractor, or another person doing or contracting  [[Orig. Op. Page 8]] to do ". . . the whole or any part of the work contemplated by the contract, . . ."

            Accordingly, where a prefabricated "item or member" is producedspecially for a particular public works project (in the sense that it is designed and produced for the particular project by the contractor, a subcontractor, or other person responding to an order submitted by the contractor or a subcontractor) it follows that any laborer, workman or mechanic employed in the production thereof is within the scope of the "prevailing rate of wage" requirement to the extent of his time and labor on the specific prefabrication job.  However, we do not mean by this characterization of the law to limit its application to work done in the production of prefabricated items which are only susceptible to use on, or as part of, a certain public works project.  The fact that a certain "item or member," though designed and produced specially for a particular project, may also be of use on, or as a part of, some other public or private project would not necessarily excuse noncompliance with the law.  The material consideration is that the item in question is designed and produced in response to an order directed to the producer for purposes of obtaining off-the job site prefabrication of a component part to be produced specially for use on, or as part of, a specific public works project.

            We believe this is the point which was on the minds of the judges of the California supreme court when they decided the case of Hague v. Cleary, Cal. 48 P.2d 5 (1935).  That case involved a city charter provision which stated that

            ". . . 'Every contract for any public work or improvement, exclusive of purchases, to be performed at the expense of the city and county, * * * "Whether such work is to be done directly under contract awarded, or indirectly by or under subcontract, subpartnership, day labor, * * * or any other arrangement whatsoever * * *" must provide: * * * That any person performing labor thereunder shall be paid not less than the highest general prevailing rate of wages in private employment for similar work; * * *'"  (48 P.2d at p. 6.)

            The plaintiff challenged a contract which required that all materials made for use under the contract be manufactured and delivered only by such firms as paid their employees the wages established by city ordinance.  Plaintiff asserted that the materials were "purchases" within the meaning of the  [[Orig. Op. Page 9]] charter and, therefore, were not subject to the prevailing wage provision.  The court upheld the contract on the theory that, as the materials were specially fabricated for the purpose of the contract, the contract for the materials was one for work and labor, rather than purchase and sale, saying (48 P.2d at 10):

            ". . . 'The weight of authority is that a contract to manufacture a special article for a special purpose in accordance with plans furnished by the purchaser is a contract for work and labor, particularly if the article manufactured is not suitable for sale in the general market in the ordinary course of the manufacturer's business, . . .'"4/

             Another issue to be noted relates to the status of theemployer of the laborers, workmen or mechanics in question.  In the words of your Question (2), as paraphrased, under what conditions does chapter 39.12 RCW apply to contractors, subcontractors, suppliers and other persons?

            The answer to this question is simply that the "prevailing rate of wage" law applies to all employers of laborers, workmen or mechanics who are engaged in the performance of labor ". . . contemplated by the contract . . ." (RCW 39.12.030.)  Thus, the act clearly applies to the prime contractor, to the extent of work done by his employees in the performance of the public work contract.  Likewise, the act applies to all subcontractors doing or contracting to do the whole or any part of the work contemplated by the contract -to the extent of labor performed by their employees in the performance of the contract.  Lastly, the requirement applies, as well, to a materialman -to this same extent -if certain prefabricated component parts are purchased from him by means of a specific order which, in effect, calls for the performance of labor upon a specific public works project.  The laborers, workmen or mechanics employed by the materialman in that particular work would be, to this extent, within the purview of the prevailing rate of wage requirement.

             [[Orig. Op. Page 10]]

            In summary, then, we answer your first two questions as follows:

            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, is applicable to labor performed in an off-the job site prefabrication by employees of the prime contractor, subcontractor, or other persons doing or contracting to do the whole or any part of the work contemplated by the contract, provided that the prefabricated "item or member" is produced specially for the particular public works project and not merely as a standard item for sale on the general market.

            Questions (3) and (4):

            We turn now to your final questions, whereby you inquire as to who is charged with determining the prevailing rate of wage and what standards are to be used in making such determination.

            The prevailing rate of wage is determined by the industrial statistician who is employed by the department of labor and industries.  See RCW 39.12.015, which provides:

            "All determinations of the prevailing rate of wage shall be made by the industrial statistician of the department of labor and industries."

            The act also requires that each contract shall contain a provision requiring that any dispute which may arise as to the prevailing wage which cannot be adjusted by the parties in interest, including labor and management representatives, shall be arbitrated by the director of the department of labor and industries.  His decision is final and binding upon all parties to the dispute.  See RCW 39.12.060.

            The standards to be used in determining the prevailing rate of wage are set forth in RCW 39.12.010 as follows:

            "(1) 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 that there is not a majority in the same trade or occupation paid at the same rate, then the average rate of  [[Orig. Op. Page 11]] 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.

            "(2) The 'locality' for the purposes of this chapter shall be the largest city in the county wherein the physical work is being performed.

            "(3) 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 [sic] [[enforceable]]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 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."

            As this statute appears to be both comprehensive and precise, we have set it forth in full in answer to your final question.

             [[Orig. Op. Page 12]]

            We trust the foregoing will be of assistance to you.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

EDWARD B. MACKIE
Assistant Attorney General

STEPHEN M. REILLY
Assistant Attorney General

                                                         ***   FOOTNOTES   ***

1/This section was recently amended by the 1967 legislature, through its enactment of Senate Bill 193 (chapter 14, Laws of 1967, Ex. Sess.) adding work done under public service maintenance contracts to the coverage of the prevailing rate of wage law.  This amendment will not affect the reasoning or conclusions stated in this opinion.

2/Contrast, in this regard, the express limitation contained in the Davis Bacon Act, 40 U.S.C.A. 256 (a).

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 immaterial.  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 when such labor is performed."

4/We should note that this decision was apparently withdrawn by the California court shortly after its issuance, for reasons unknown to us.  Thus, the decision, as such, has no current authoritative value.  Nevertheless, the reasoning of the court, in distinguishing between the manufacture of special purpose and general purpose articles, appears to us to be sound.

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