OBLIGATION OF STATE TO REIMBURSE PRIVATE OPERATOR FOR WAGE CONTRACTS MADE WITH EMPLOYEES

OBLIGATION OF STATE TO REIMBURSE PRIVATE OPERATOR FOR WAGE CONTRACTS MADE WITH EMPLOYEES

Private operator under contract with the state may negotiate a labor agreement obligating the state to reimburse him for wage payments made under a contract providing premium pay or additional vacation with pay.

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                                                                 January 17, 1950

Honorable A. M. Johnson
Director
Department of Labor and Industries
Olympia, Washington                                                                                                              Cite as:  AGO 49-51 No. 196

Attention:  Norman Schut, Assistant Director

Dear Sir:

            We have your letter of January 6, 1950, in which you ask the following question:

            "May a private operator under contract with the state negotiate a labor agreement which would obligate the state to reimburse him for wage payments made under a short term contract providing premium pay based on longevity available only to those employees who stay until the operation ceases or alternatively providing for two weeks additional vacation with pay for all employees upon cessation of the operation."

            Our conclusions may be summarized as follows:

            Such an agreement is legal and would obligate the state to reimburse the operator.

                                                                     ANALYSIS

            Article 2, section 25 of the Washington Constitution provides in part as follows:

             [[Orig. Op. Page 2]]

            "The legislature shall never grant any extra compensation to any public officer, agent, servant or contractor after the services shall have been rendered or the contract entered into. * * *"

            This section prohibits the granting of extra compensation only after the services have been rendered or the contract entered into.  In the case at hand, the operator and his employees are presently negotiating for services to be performed in the future, and the terms and conditions of the contract have yet to be determined.  Under such circumstances, section 25 would not be applicable.  In view of the fact that these employees will have some difficulty in finding similar employment after the ferry operations have ceased, and the consideration of their remaining until the cessation of operations, the proposals advanced as an inducement to continue employment are reasonable and legal.

            There remains only the question of reimbursement of the operator under his contract with the state.  That contract provides that the state will not reimburse the operator for any services or labor costs which shall be over or under the prevailing union scale for the job classification filled by the employees.

            In an opinion of December 13, 1949, directed to your office, we held in reference to the contract now under consideration that "the scale of wages per unit work period seems to be undisputed.  The state according to the terms of the agreement is liable only for reimbursement according to that wage scale."  On further consideration, we believe that interpretation is too restrictive.  The determination of the "prevailing union scale" is one of fact.  Under the particular circumstances of the employment here involved, the payment of premiums based on longevity or additional vacation with pay may well be within that term.

            It is therefore our opinion that a private operator under contract with the state may negotiate a labor agreement obligating the state to reimburse him for wage payments made under the short term contract providing premium pay based on longevity for those employees who remain at work until the operation ceases, or alternatively providing for two weeks additional vacation with pay for all employees upon cessation of the operation.  To the extent that our opinion of December 13, 1949, is inconsistent with this holding, it is duly overruled.

Very truly yours,

SMITH TROY
Attorney General

LAWRENCE K. McDONELL
Assistant Attorney General