AGO 1971 No. 1 - Jan 5 1971
DISTRICTS ‑- SCHOOLS ‑- PENSIONS ‑- PUBLIC WORKS ‑- PENSION PROGRAM FOR NONCERTIFICATED SCHOOL DISTRICT EMPLOYEES
(1) RCW 41.40.410, as amended by § 1, chapter 84, Laws of 1965, requires all public school districts to provide coverage in the Washington public employees' retirement system for their eligible noncertificated employees even though such employees may be members of a craft or trade union which has its own union pension trust plan; the fact of membership in such a craft or trade union does not constitute a basis for personal ineligibility for membership in the public employees' retirement system under the provisions of RCW 41.40.120.
(2) Chapter 39.12 RCW, providing for payment of the "prevailing rate of wage" (including pension benefits, where applicable) on public works projects does not apply when a school district directly hires noncertificated craft or trade union members on a regular basis to perform work on school district property under the supervision of the school district administrators.
(3) A school district which is covering its noncertificated employees under the Washington public employees' retirement system is not authorized to make additional pension contributions to a union pension trust fund set up by a craft or trade union to which these employees belong.
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January 5, 1971
Honorable Louis Bruno
State Superintendent of Public Instruction
Old Capitol Building
Olympia, Washington 98501
Cite as: AGO 1971 No. 1
By letter previously acknowledged you requested an opinion of this office on several questions pertaining to pension coverage for certain noncertificated school district employees. We paraphrase your questions as follows:
[[Orig. Op. Page 2]]
(1) Do the provisions of RCW 41.40.410, as amended by § 1, chapter 84, Laws of 1965, require the various public school districts of this state to provide coverage, under the laws governing the Washington public employees' retirement system, for those of their noncertificated employees who are members of a craft or trade union which has its own union pension trust plan?
(2) Do the provisions of chapter 39.12 RCW, providing for payment of the "prevailing rate of wage" (including pension benefits, where applicable) on public works projects, apply when a school district directly hires noncertificated craft or trade union members on a regular basis to perform work on school district property under the supervision of the school district administrators?
(3) If question (2) is answered in the affirmative, do the provisions of RCW 39.12.010 (3) (b) operate to exclude "pensions" from any requirement of payment of a "prevailing rate of wage" to those noncertificated school district employees who are members of the Washington public employees' retirement system?
(4) Does a school district which is covering its noncertificated employees under the Washington public employees' retirement system, in accordance with RCW 41.40.410, as amended by § 1, chapter 84, Laws of 1965, have any authority to make additional pension contributions to a union pension trust fund set up by a craft or trade union to which these employees belong?
We answer question (1) in the affirmative and questions (2) and (4) in the negative; because of our negative answer to question (2), consideration of question (3) is unnecessary.
Prior to the enactment of § 1, chapter 84, Laws of 1965, the participation of school districts in the Washington public employees' retirement system on behalf of their noncertificated employees was permitted but was not required. However, by its enactment of this statute, the 1965 legislature amended the provisions of RCW 41.40.410 by inserting therein the following proviso:
[[Orig. Op. Page 3]]
". . . Provided, That on and after September 1, 1965, every school district of the state of Washington shall be an employer under this chapter and every employee of the school district who is eligible for membership under RCW 41.40.120 shall be a member of the retirement system and participate on the same basis as a person who first becomes a member through the admission of any employer into the retirement system on and after April 1, 1949. . . ."
RCW 41.40.120, which is referred to in this proviso, governs the subject of membership in the Washington public employees' retirement system, as follows:
"Membership in the retirement system shall consist of all regularly compensated employees and appointive and elective officials of employers as defined in this chapter who have served at least six months without interruption or who are employed, appointed or elected on or after July 1, 1965, with the following exceptions:
"(1) Persons in ineligible positions;
"(2) Employees of the legislature except the officers thereof elected by the members of the senate and the house and legislative committees, unless membership of such employees be authorized by the said committee;
"(3) Persons holding elective offices or persons appointed directly by the governor:Provided, That such persons shall have the option of applying for membership and to be accepted by the action of the retirement board, such membership may become effective at the start of the initial or successive terms of office held by the person at the time application is made: And provided further, That any such persons previously denied service credit because of any prior laws excluding membership which have subsequently been repealed, shall nevertheless be allowed to recover or regain such service credit denied or [[Orig. Op. Page 4]] lost because of the previous lack of authority: And provided further, That any persons holding elective offices or persons appointed by the governor who are members in the retirement system and who have, prior to becoming such members, previously held an elective office, and did not at the start of such initial or successive terms of office exercise their option to become members, may apply for membership and be accepted by action of the retirement board, to be effective during such term or terms of office, and shall be allowed to recover or regain the service credit applicable to such term or terms of office upon payment of the employee and employer contributions therefor;
"(4) Employees holding membership in, or receiving pension benefits under, any retirement plan operated wholly or in part by an agency of the state or political subdivision thereof, or who are by reason of their current employment contributing to or otherwise establishing the right to receive benefits from any such retirement plan: Provided, however, In any case where the state employees' retirement system has in existence an agreement with another retirement system in connection with exchange of service credit or an agreement whereby members can retain service credit in more than one system, such an employee shall be allowed membership rights should the agreement so provide: And provided further, That an employee shall be allowed membership if otherwise eligible while receiving survivor's benefits as secondary payee under the optional retirement allowances as provided by RCW 41.40.190;
"(5) Patient and inmate help in state charitable, penal and correctional institutions;
"(6) 'Members' of a state veterans' home or state soldiers' home;
"(7) Persons employed by an institution of higher learning or community college operated [[Orig. Op. Page 5]] by an employer, primarily as an incident to and in furtherance of their education or training, or the education or training of a spouse;
"(8) Employees of an institution of higher learning or community college operated by an employer during the period of service necessary to establish eligibility for membership in the retirement plans operated by such institutions;
"(9) Persons rendering professional services to an employer on a fee, retainer or contract basis or as an incident to the private practice of a profession;
"(10) Persons appointed after April 1, 1963 by the liquor control board as agency vendors.
"(11) Employees of a labor guild, association, or organization: Provided, That elective officials and employees of a labor guild, association, or organization which qualifies as an employer within this chapter shall have the option of applying for membership and to be accepted by the action of the retirement board.
"(12) Persons hired in eligible positions on a temporary basis for a period not to exceed six months: Provided, That if such employees are employed for more than six months in an eligible position they shall become members of the system."
Lastly, the term "eligible position" is defined by RCW 41.40.010 (26) as meaning:
". . .
"(a) Any position which normally requires five or more uninterrupted months of service a year for which regular compensation is paid to the occupant thereof;
[[Orig. Op. Page 6]] "(b) Any position occupied by an elected official or person appointed directly by the governor for which compensation is paid."
In AGO 65-66 No. 21 [[to Prosecuting Attorney, King County on June 7, 1965]], copy enclosed, we stated the apparent purpose of the amendatory provisions of § 1, chapter 84, Laws of 1965, as follows:
". . . It is to be seen from this amendatory provision that the purpose of the legislation is to require every school district of the state to participate, as an employer, in the state employees' retirement system on and after September 1, 1965, for the benefit of every school district employee who is eligible for membership. Since certificated teachers are not eligible for membership in the state employees' retirement system, as a general matter, because they are covered by the state teachers' retirement system (see, RCW 41.40.120 (4)), it is evident that for all practical purposes this new legislation will only apply to noncertificated school district employees."
Thus, unless a particular noncertificated school district employee is personally ineligible for membership in the Washington public employees' retirement system under one of the several subsections of RCW 41.40.120,supra, it is now mandatory that he be covered by his employer as a member of this state retirement system.1/ Furthermore, it is readily apparent from an examination of this statute that none of its provisions purport to render a person ineligible for membership in the state retirement system simply because of his membership in a trade or craft union.
It is true, of course, that where (in addition) the state agency or political subdivision, which is the "employer" of this employee, is authorized to, and is making contributions to some other pension program covering the employee ‑ including, e.g., a union trust pension program which is being operated by the employee's trade or craft union ‑ [[Orig. Op. Page 7]] the possibility of personal ineligibility for membership in the public employees' retirement system under the provisions of RCW 41.40.120 (4), will arise. Accord, AGO 61-62 No. 12 [[to John A. Petrich, State Senator on February 20, 1961]], copy enclosed, dealing with certain port district employees. However, as will be seen below in response to your final question, we do not find that the various school districts of this state have the requisite authority at present to participate in, or contribute to, any such union pension program covering their employees.
The basic substantive requirements of chapter 39.12 RCW, relating to payment of a "prevailing rate of wage" on public works projects in this state, are set forth in RCW 39.12.020, as follows:
"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 57-58 No. 54 [[to State Auditor on May 3, 1957]], copy enclosed, we determined that the concluding sentence of this statute, which we have underscored in quoting it above, excludes from coverage under any of the provisions of chapter 39.12 RCW those persons regularly employed by the state or any municipality on a monthly or per diem salary. In this opinion we said:
". . . if regular employees of the state, or any county, municipality, or political subdivision created by its laws, whose wages are predicated upon a monthly or per diem basis, are employed upon a public work, they are excluded from the required method of payment laid out in the first sentence of this statute. This statute is not concerned as to how or in what capacity such employees may be utilized."
[[Orig. Op. Page 8]]
This conclusion, and the situation which AGO 57-58 No. 54 involved, should, of course, be contrasted with that which was covered by AGO 59-60 No. 156 [[to Department of Labor and Industries on October 31, 1960]], a copy of which is also enclosed, wherein we stated that:
". . . where a school district undertakes any public workby contract it must require the contractor to pay the prevailing wage and comply with the other provisions of chapter 39.12 RCWsupra." (Emphasis supplied.)
Thus, there is a statutory distinction to be drawn, in terms of the applicability of chapter 39.12 RCW, between persons employed directly by a public agency and those who are employed by contractors who have entered into public works contracts with such an agency. Persons employed directly by the public agency and compensated on a monthly or per diem basis (as we understand is presently the case with respect to noncertificated school district employees) are not governed by the act ‑ including those provisions thereof which include pension benefits within the scope of the defined term "prevailing rate of wage." See, RCW 39.12.010 (3) (b).
The foregoing negative answer to question (2), excluding regularly employed noncertificated school district employees from coverage under any of the provisions of chapter 39.12 RCW, renders consideration of your third question unnecessary.
Your final question raises the issue of whether a school district may be said to have any authority to make contributions to a union trust pension plan covering certain of its noncertificated employees, in lieu of coverage of these employees under the laws governing the Washington public employees' retirement system.
Under the provisions of RCW 41.40.120 (4), supra, an affirmative answer to this question might very well lead to a basis for excluding the employees in question from mandatory membership in the Washington public employees' retirement system. As earlier noted, if a school district had the authority to make contributions to a union trust pension plan covering certain of its noncertificated employees, and [[Orig. Op. Page 9]] was exercising this authority in a particular case, the employees in question would possibly be personally ineligible for membership in the public employees' retirement system. Accord, AGO 61-62 No. 12,supra. However, our examination of the statutes pertaining to public school districts in this state leads us to the conclusion that such an affirmative answer to your concluding question is not presently supportable.
It is fundamental, of course, that school districts, as municipal corporations, have only such powers as have been expressly granted to them by the legislature or as are to be necessarily implied from their expressly granted powers. Seattle High School v. Sharples, 159 Wash. 424, 293 Pac. 994 (1930);Juntila v. Everett School Dist. No. 24, 178 Wash. 637, 35 P.2d 78 (1934). And as in the case of any other municipal corporation, if there is a doubt as to the existence of a power, it must be denied. Pacific Etc. Ass'n v. Pierce County, 27 Wn.2d 347, 178 P.2d 351 (1947); andState ex rel. Port of Seattle v. Superior Court, 93 Wash. 267, 160 Pac. 755 (1916).
The question of the authority of various classes of municipal corporations, all of which are manifestly eligible (if not required) to provide coverage for their employees under the laws governing the Washington public employees' retirement system (see, RCW 41.40.410, supra), to provide additional or alternative pension coverage under some other nonpublicly administered pension program (e.g., the life insurance annuity program, or a union trust pension plan) has previously been considered in several earlier opinions of this office. See, AGO 57-58 No. 223 [[to Prosecuting Attorney, Spokane County on October 28, 1958]]; AGO 61-62 No. 12,supra; and AGO 63-64 No. 2 [[to Edward F. Riley, State Senator on January 9, 1963]], copies of all of which are enclosed. While none of these opinions dealt specifically with school districts, the rule to be derived from these opinions is most certainly applicable to this particular class of municipal corporation as well. This rule, which we arrived at from an analysis of the pattern of legislation governing "fringe benefits," generally, for public employees in this state, was enunciated in AGO 63-64 No. 2, as follows:
". . . where the legislature has intended to authorize a municipal corporation to purchase for its employees a pension or retirement plan from a private insurance company or like organization, it has clearly expressed its intention and has not been satisfied merely to grant authority to purchase group insurance." (Double emphasis supplied.)
[[Orig. Op. Page 10]]
In this opinion we concluded that, for lack of any express statutory authority, a city of the third class could not be regarded as having the necessary statutory authority to purchase a pension program for its employees from a private life insurance company. This conclusion was comparable to that reached with respect to the employees of a rural county library district in AGO 57-58 No. 223, supra. By way of contrast, in the third of the three prior opinions above cited, AGO 61-62 No. 12, we found an express grant of authority for port districts to provide private (including union trust) pension coverage for their employees under the provisions of RCW 53.08.170.
With the foregoing rule and analytical approach in mind, we have carefully examined all of the statutes pertaining to the powers and functions of public school districts in this state. We have found no statutes which may be said to meet the requirements of the rule; i.e., containing an express grant of statutory authority to provide any form of pension coverage for regular school district employees other than coverage under the Washington public employees' retirement system (or, in the case of certificated teachers, under the state teachers' retirement system as codified in chapter 41.32 RCW).
It is hoped that the foregoing will be of assistance to you.
Very truly yours,
THOMAS L. ANDERSON
Assistant Attorney General
*** FOOTNOTES ***
1/See, also, 48 OAG 89 and 48 OAG 114.