803 KAR 1:045.

Contractors, subcontractors, prevailing rates of wages.

 

      RELATES TO: KRS

337.530

      STATUTORY AUTHORITY:

KRS 337.520(1)

      NECESSITY, FUNCTION,

AND CONFORMITY: KRS 337.520 authorizes the executive director to make

administrative regulations he may deem appropriate to carry out the provisions

and purposes of KRS 337.505 to 337.550. The function of this administrative

regulation is to interpret the requirements of payments which may be considered

as paying the prevailing rates of wages by contractors and subcontractors.

 

      Section 1. The

Statutory Provisions. The statute requires all contractors and subcontractors

to pay not less than the prevailing rate of wages in legal tender without any

deductions. The statute provides an exemption to this requirement where the

employer and employee enter into an agreement in writing at the beginning of or

during any term of employment covering deductions for food, sleep

accommodations or any similar item if this agreement is submitted by the

employer to the office and is approved by the office as fair and reasonable.

 

      Section 2. Free and

Clear Payment; Kickbacks. Wages cannot be considered to have been paid by the

employer and received by the employee unless they are paid finally and

unconditionally or "free and clear." The payment of wages as required

by the statute will not be met where the employee kicks back directly or

indirectly to the employer or to another person for the employer's benefit the

whole or part of the wage delivered to the employee. This is true whether the

kickback is made in cash or in other than cash. For example, if it is a

requirement of the employer that the employee must provide a uniform which will

be used in, or is specifically required for, the performance of the employee's

particular work, there would be a violation of the statute when the cost of

furnishing and maintaining the uniform by the employee cuts into the prevailing

rate of pay.

 

      Section 3. Payment

Made to Person Other than Employee. (1) Taxes which are assessed against the

employee and which are collected by the employer and forwarded to the

appropriate governmental agency may be deducted from the prevailing rate of

wages. This is applicable to the employee's share of social security, as well

as other federal, state, or local taxes. No deduction may be made for any tax

or share of a tax which the law requires to be borne by the employer.

      (2) Where an

employer is legally obliged, as by order of a court of competent and

appropriate jurisdiction, to pay a sum for the benefit or credit of the

employee to a creditor of the employee, trustee, or other third party, under

garnishment, wage attachment, trustee process, or bankruptcy proceeding,

deduction from wages of the actual sum so paid is not prohibited; provided,

that neither the employer nor any person acting in his behalf or interest

derives any profit or benefit from the transaction.

      (3)(a) Where an

employer is directed by a voluntary assignment or order of his creditor, donee,

or other third party, deductions from wages of the actual sum so paid is not

prohibited, provided, that neither the employer nor any person acting in his

behalf or interest, directly or indirectly, derives any profit or benefit from

the transaction.

      (b) No payment by

the employer to a third party will be recognized as a valid payment of wages

required by the statute where it appears that such payment was part of a plan

or arrangement to evade or circumvent the statute. For the protection of both

employer and employee, it is suggested that full and adequate record of all

assignments and orders be kept and preserved.

      (c) Under the

principles stated in paragraphs (a) and (b) of this subsection, employers will

be permitted to deduct from wages sums paid at the employee's direction to

third persons for the following purposes: sums paid, as authorized by the

employee, for the purchase in his behalf of Savings Bonds; union dues paid

pursuant to a collective bargaining agreement with bona fide representatives of

the employees; employees' accounts with merchants independent of the employer;

insurance premiums; voluntary contributions to churches and charitable,

fraternal, athletic, and social organizations or societies from which the

employer receives no profit or benefit directly or indirectly. (1 Ky.R. 833; eff.

5-14-75; TAm eff. 8-9-2007.)