Action Elec. Co., Inc. v. Industrial Commission of Utah, 16731

• Decision Date: 10 September 1981
• Docket Number: No. 16731,16731
• Citation: 636 P.2d 474
• Parties: ACTION ELECTRIC COMPANY, INC., a Utah corporation, Plaintiffs, v. The INDUSTRIAL COMMISSION OF UTAH, Defendant.
• Court: Utah Supreme Court

Page 474

636 P.2d 474

ACTION ELECTRIC COMPANY, INC., a Utah corporation, Plaintiffs, v. The INDUSTRIAL COMMISSION OF UTAH, Defendant.

No. 16731.

Supreme Court of Utah.

Sept. 10, 1981.

Ray M. Harding, Jr., Pleasant Grove, for plaintiffs.

David L. Wilkinson, Frank V. Nelson, Salt Lake City, Ronald E. Terry, Spanish Fork, for defendant.

OAKS, Justice:

This case seems to have two of everything except briefs. A brief has been filed by the employer, Action Electric, but this Court has not been favored with a brief from the Industrial Commission. The employer seeks to set aside a Commission order holding it liable for an employee's compensation claim of $1,953.49, plus a statutory penalty of $293.02. At issue is the effect of two different sets of statutes that have been confused and intertwined in a tangle this Court must attempt to unsnarl. All statutory references are to Title 34, Utah Code Annotated, 1953.

Chapter 28, enacted in 1919 and 1937 and referred to hereafter as the "wage payment legislation," requires employers to make timely and regular payment of wages to their employees, to give notices of their rate and date of payment, to settle wages due promptly upon voluntary or involuntary severance (on pain of a prescribed penalty), and to keep payroll records (§§ 34-28-3, 28-4, 28-5, and 28-10). The wage payment legislation is apparently aimed at helping those whose employment contracts are silent on its subject matter. It is expressly inapplicable to "employment where an agreement exists between employer and employee providing for different terms of payment ..." (§ 34-28-1).

Violation of the wage payment legislation is punishable as a misdemeanor (§ 34-28-12). In addition, the Industrial Commission has the duty of ensuring compliance with the provisions of the chapter. To that end, the Commission is authorized to investigate, hold hearings, and determine the validity of any claim of violation. If it determines that a violation has occurred, "it shall enter its order or award in accordance with the requirements of this chapter" (§ 34-28-9, as amended). The Commission is also authorized to take assignments of wage claims or other designated rights from employees in amounts of up to $400 per claim and enforce them against their employers (§ 34-28-13). A Commission award becomes a lien against the real property of the employer when it is filed in the office of the clerk of the district court and docketed in his judgment docket. A Commission order can be appealed to the district court for the county where either party resides, which "shall hear such matters de novo, making its own determination both as to the facts and the law" (§ 34-28-9, as amended in 1975).

Chapter 30, enacted in 1933 and referred to hereafter as the "prevailing wage legislation," requires employers of "laborers, workmen, apprentices and mechanics" in behalf of the state or any county, city, district or other political subdivision, including contractors or subcontractors on public works, to pay "not less than the general prevailing rate of wages per hour for work of a similar character in the locality in which the work is performed ..." (§ 34-30-2). ¹ Public bodies awarding contracts for public works are required to ascertain and publish the general prevailing rate of wages in their call for bids, and to provide in their contracts that the contractor and subcontractor shall pay not less than these amounts "to all laborers, workmen, apprentices and mechanics employed by them in the execution of the contract" (§ 34-30-3). The statute also requires a contract provision that upon failure or refusal to pay the required amounts the employer shall "forfeit to the industrial commission as a penalty" the difference between the amounts actually paid to its employees and the amounts that would have been paid to all employees at the prevailing wage rate, plus 15 percent (§ 34-30-4).

Chapter 30 also requires public bodies to monitor wage payments and report violations to the Commission. If, after notice and hearing, the Commission finds a violation, it "shall make an order authorizing the public body to withhold and retain from the contract price a sum equal to the amount of the penalties assessed against the contractor." The sum so withheld is paid over to the Industrial Commission, which disburses to the employees the amount necessary to bring their total compensation to the prevailing rate, and retains the balance as a fund to enforce the provisions of Chapter 30 (§ 34-30-5). Employers are also required to keep employment and payroll records and make them available for official inspection. Employers who fail to do so, and public officials (but not employers) who violate any of the provisions of the prevailing wage legislation, are guilty of a misdemeanor (§ 34-30-9).

In contrast to the wage payment legislation, there are no statutory provisions in the prevailing wage legislation bearing directly on an individual employee's right of action against his employer for compensation owing.

This controversy began in January, 1979, when Ronald E. Terry complained to the Industrial Commission that he had not been paid the prevailing wage for the 473 hours he worked for Action Electric on a school project in Nephi. Terry was employed under an employment contract that specified a base salary of $20,000 per year (plus a bonus if the job was finished earlier than scheduled), a one-week paid vacation, and a paid medical insurance plan.

In initiating his complaint, Terry gave the Commission a form that "assign(ed) the said wages to the Industrial Commission of Utah to collect as provided by 34-30-1 through 12, U.C.A., 1953." (Chapter 30, the prevailing wage legislation, has no wage assignment provisions, these being contained in the wage payment legislation in Chapter 28). The Commission issued notice to the employer and held a hearing on Terry's complaint that he was not paid the prevailing wages. This hearing was held before a "Wage Claim Hearing Examiner," and was specified to be under the provisions of Chapter 28, the wage payment legislation. In May, 1979, the examiner found in favor of the employee and issued an order for payment in the amount of $1,957.62.

On reconsideration, the examiner scheduled a second hearing, and on June 15 issued another order for payment, this one in the amount of $1,953.49. The findings and computations leading to that amount make no mention of the prevailing wage. Like the first order, this order is styled a "wage claim" and is expressed to be made pursuant to Chapter 28. In apparent reliance on that chapter, it states that it will become final within 15 days unless appealed to the district court and would become a lien on the employer's real property upon docketing with the clerk of the district court. In furtherance of the confusion with the prevailing wage legislation in Chapter 30, however, the order also states that "the penalty as provided for in 34-30-4 will apply."

The employer promptly filed an appeal in the district court. The disposition of that appeal...