Could the Department of Labor and Industries change an occupational classification even when neither class was insolvent?

Plain-English summary

The Washington AG concluded that the Department of Labor and Industries could transfer an industry between occupational classifications even if neither affected class was insolvent or near insolvency. It read a separate sentence of RCW 51.16.100 as allowing classification corrections when the best interests of a class or subclass would be served, without importing the fund-shortage condition from another part of the statute.

The official opinion states: “We conclude, therefore, that pursuant to RCW 51.16.100, changes in classifications and subclassifications which are wholly solvent may be made when their "best interest" would be served thereby.” (source).

Currency note

This opinion was issued in 1961. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Was insolvency required?
A: No. The AG said the best-interest classification authority was independent of the provision about insufficient accident-fund money.

Q: Who could make classification changes?
A: The opinion described authority of the department and its director under RCW 51.16.100.

Q: Did the opinion approve a particular reclassification?
A: No. It answered whether the agency possessed the power in the stated circumstances.

Background and statutory framework

The department director asked about moving a business or industry between occupational classifications. The AG examined the wording and legislative origins of RCW 51.16.100 and concluded that its best-interest standard could apply even to solvent classes.

Source

• Landing page: https://www.atg.wa.gov/ago-opinions/authority-change-classification-business-or-industry

Original opinion text

Attorney General John J. O'Connell

OFFICES AND OFFICERS ‑- STATE ‑- LABOR AND INDUSTRIES ‑- AUTHORITY TO CHANGE CLASSIFICATION OF BUSINESS OR INDUSTRY

The Department of Labor and Industries is empowered to transfer a business or industry from one occupational classification to another by administrative procedure even though the occupations involved are neither insolvent nor in danger of becoming insolvent.

February 10, 1961

Mr. Jerry Hagan, Director
Department of Labor and Industries
General Administration Building
Olympia, Washington

Cite as: AGO 61-62 No. 10

Dear Sir:

This letter is in reply to your question which we paraphrase as follows:

Is the Department of Labor and Industries empowered to transfer a business or industry from one occupational classification, as established by chapter 51.20, to another by administrative procedure, when the occupational classifications involved are neither insolvent nor in danger of becoming insolvent?

We answer the question in the affirmative.

ANALYSIS

RCW 51.16.100, which reads as follows:

"It is the intent that the accident fund shall ultimately become neither more nor less than self-supporting, except as provided in RCW 51.16.105 and, if in the adjustment of premium rates by the director and the moneys paid into the fund by any class or classes shall be insufficient to properly and safely distribute the burden of accidents occurring therein, the department may divide, rearrange, or [[Orig. Op. Page 2]] consolidate such class or classes, making such adjustment or transfer of funds as it may deem proper. The director shall make corrections of classifications or subclassifications or changes in rates, classes and subclasses when the best interest of such classes or subclasses will be served thereby." (Emphasis supplied.)

is, with the exception of the phrase ". . . except as provided in RCW 51.16.105 . . ." which was substituted for the phrase ". . . exclusive of the expense of administration, . . ." by the legislature in 1953, a codification of portions of section 1, chapter 247, Laws of 1947. The first section of RCW 51.16.100, denoted by the absence of underscoring, is a portion of section 4d, within section 1, chapter 247, Laws of 1947. The underscored section of RCW 51.16.100 is a portion of section 4e.

The expression by the legislature that ". . . The director shall make corrections of classifications or subclassifications or changes in rates, classes, and subclasses when the best interest of such classes or subclasses will be served thereby.", sets forth in clear and unambiguous terms that the director may make those types of changes mentioned when it is determined that the "best interest" of the classes or subclasses will be served. It is an axiomatic rule of statutory construction that statutes which are clear and unambiguous upon their face are not subject to interpretation. Shelton Hotel Co. Inc. v. Bates, 4 Wn. (2d) 498, 104 P. (2d) 478 (1940).

Because the legislative declaration is not in need of interpretation, it would be improper to read into the necessary condition described as "best interest" a requirement that there be a shortage of funds, merely because the first portion of the code section concerns the possible situation of there being an insufficiency of funds. It is obvious that the legislature did not intend to have these provisions read together since they appear in different sections of the Laws of 1947.

A similar delegation of power, the power to declare occupations not mentioned by the legislature to be extrahazardous, was upheld by the court inState v. Bayles, 121 Wash. 215, 209 Pac. 20 (1922). InState ex rel. C., M. Etc. R. Co. v. Public S. Com., 94 Wash. 274, 280, 162 Pac. 523 (1917), the court in speaking of the standards which must be prescribed by the legislature to guide the administrative agency in the exercise of its delegated powers, stated:

[[Orig. Op. Page 3]]

"Though the legislature must itself determine a standard for regulation by which the commission must be guided, that standard need not be, and in the nature of the case cannot be, detailed and specific. It may be couched in general terms, as that the rules and orders of the commission shall be just, fair and reasonable. . . ."

We conclude, therefore, that pursuant to RCW 51.16.100, changes in classifications and subclassifications which are wholly solvent may be made when their "best interest" would be served thereby.

We trust the foregoing will be of assistance to you.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

GILBERT C. VALLEY
Assistant Attorney General