Attorney General's Opinion

Attorney General, Richard Blumenthal

April 10, 2006

Raeanne Curtis

Acting Commissioner of Labor

200 Folly Brook Boulevard

Wethersfield, CT  06109

Dear Acting Commissioner Curtis:

As you know, Section 31-57f of the Connecticut General Statutes provides for the payment of a standard wage rate to certain service workers employed by contractors of the state or its agents. On September 8, 2003, this office issued an opinion letter concluding that state contractors must pay increases in the standard wage rate that occur during the period of a state contract and are promulgated by your department based on a formula established by the U S Department of Labor.

There has been uncertainty as to whether the contractor has a responsibility to absorb the cost of these increases, or alternatively the state agency must pay the contractor the increased costs. Your agency has concluded that the responsibility to pay for the standard wage increases ultimately lies with the state agencies. We agree with your agency's conclusion and are issuing this opinion to clarify the responsibilities and obligations of contractors and the State and its agents in adhering to section 31-57f of the Connecticut General Statutes A specific statute Section 31-57f (hereinafter "the statute")¹ applies to employers

who enter into contracts or agreements with the state or its agents on or after July 1, 2000, to provide food, building, property or equipment services or maintenance. Conn. Gen. Stat. § 31-57f(a) and (m). An employer who pays the state for a franchise to provide food preparation or service is also covered. Conn. Gen. Stat. § 31-57f(k). The statute applies to contracts with a value of $50,000 00 or more. Conn. Gen. Stat. § 31-57f(i). See AG Opinion 2005-027, letter to Commissioner Shaun B. Cashman, October 17, 2005.

Conn. Gen. Stat. §31-571(b) requires employers to pay their nonsupervisory employees an hourly rate that is not less than the standard wage rate established by the Labor Commissioner. Subsection (e) of the statute provides that the Labor Commissioner must determine the standard wage rate for each covered job classification by referring to the federal Service Contract Act of 1965. The standard wage rate shall be equal to the minimum hourly rate for service workers set forth in the federal Register of Wage Determinations under the Service Contract Act plus a thirty percent surcharge to cover the cost of benefits, if none are offered to the employees Conn. Gen. Stat. § 31-57f(e).

Employers must keep detailed records documenting their compliance with the requirements of Conn. Gen. Stat § 31-57f, and the Labor Commissioner and his staff may conduct inspections and hold hearings to investigate complaints of nonpayment of the standard rate of wages. Conn. Gen. Stat § 31-57f(h) and (j). Employers who violate the statute may incur civil penalties.

Conn. Gen. Stat. § 31-57f(c) and (d). The Labor Commissioner is authorized to adopt regulations to carry out the provisions of the statute; Conn. Gen. Stat. § 31-57f(1); but none have yet been promulgated.

On October 9, 2001, this office advised state agency heads that the standard wage rates in effect at the time of a contract's renewal, not those in effect at the time of a contract's award, applied to options to extend a contract.  In a

subsequent opinion letter, dated September 8, 2003, we determined that Conn. Gen. Stat. § 31-57f requires state contractors to increase employees' wages whenever the standard wage rate is increased. As stated in that opinion: "The legislative history of that statute… makes clear that its primary purpose was to ensure that employers who contract with the state to provide certain kinds of services pay their employees fair wages. "

The Department of Labor has informed us that it believes that the legislative policy goal of providing fair wages to employees, as set forth in Conn. Gen. Stat. § 31-57f, will not be achieved if employers subject to the provisions of Section 31-57f are required to pay their employees increases in the standard wage, without being reimbursed for such increases by the state agency with which they contract. If such employers are placed at an unfair economic disadvantage because of these state mandated wage increases, the jobs of the employees Section 31-51f seeks to benefit will be endangered, defeating the purpose of the statute. The Department of Labor has determined, therefore, that the increased standard wage rate should be paid by the state agency to the contractors in order to ensure that the workers receive their wages.

The Department of Labor has also informed us that numerous state agencies, including the Department of Public Works, the Department of Transportation, the Connecticut State Universities, and the University of Connecticut Health Center have agreed to pay increases in standard wages and associated costs to their contractors, who, in turn, paid the employees the back wages they were due.

The contracts between the state agencies and the contractors involved in this matter provide further important information about this question. We have reviewed a number of contracts between state contractors and state agencies, including the Department of Public Works, the University of Connecticut Health Center and Norwalk Community College.  While these contracts state that the contractor must pay the standard wage rate, none state which party has the ultimate responsibility to pay for the increases in the standard wage. Each of the contracts in question was drafted by the state agency. A basic rule of contract construction provides that, "(w)here the language [in the contract] is ambiguous … we must construe those ambiguities against the drafter " Cantonbury Heights Condominium Ass'n., Inc. vs. Local Land Development, LLC, 273 Conn 724, 735 (2005). Accordingly, in light of the failure of the contracts to address this question, they must be construed against the agencies and in favor of the contractors. In other words, they must be construed to require the agencies to compensate the contractors for all costs of increases in the standard wage rate during the term of the contracts.

In light of these considerations, we agree with the Department's interpretation of Conn. Gen Stat. §31-57f. "[T]he practical construction placed on the statute by the agency, if reasonable is highly persuasive." Ottochian v.  Freedom of Information Commission, 221 Conn. 393, 399 (1992). Courts accord considerable deference to the construction given a statute by the administrative agency charged with its enforcement, particularly when the agency has consistently followed its construction over a long period of time " Sutton v.  Lopes, 201 Conn. 115, 120 (1986).

The legislature itself was concerned that the worker benefits set forth in Section 31-57f not disadvantage employers who provided such benefits, specifically directing that "employers with employees covered by collective bargaining agreements which call for wages and benefits that are reasonably related to the standard rate shall not be economically disadvantaged in the bidding process." Conn. Gen. Stat. §31-57f(f). Such concern for treating employers fairly who comply with the provisions of Section 31-57f is reasonably implied for all employers covered by all of the subsections of the statute. "It is not our practice to construe a statute in a way to thwart its rational and sensible result that bears directly on the purpose the legislature sought to achieve."  Colonial Penn Ins. Co.  v. Bryant, 245 Conn. 710, 725, 714 A 2d 1209 (1988)." State v. Reynolds, 264 Conn. 1, 32 (2003). Finally, as we stated in our October 17, 2005 opinion to you: "No state agency or management company under contract with the state has the authority to thwart the legislative directives set forth in Section 31-57f. "

For the foregoing reasons, we conclude and advise you that pursuant to Conn Gen. Stat § 31-57f, any increase in the standard wage rate promulgated by you, based on a formula established by the TT S Department of Labor, along with associated direct costs, such as increased payroll taxes, is the responsibility of the contracting state agency. Further, we recommend that procedures be established and regulations be adopted pursuant to subsection (1) of the statute in order to notify the contracting parties of any increases in the standard wage, and to facilitate compliance with the statute Contract amendments to existing contracts should be executed to formalize this requirement and all new

 

contracts should require state agencies to reimburse employers for increases in the standard wage, subject to audit by the agency.

Very truly yours,

RICHARD BLUMENTHAL
ATTORNEY GENERAL

Glenn A. Woods
Assistant Attorney General

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