OFFICIAL OPINION No. 12

OFFICIAL OPINION No. 12 Older Americans A ct-Compensation-Foster Grandparents' Program- Commonwealth Employees 1. ~e~ tion 6~l(d) of the Older Americans Act prohibits compensation paid to par- t1c1pants m the Foster Grandparents' Program from being treated as "income." 2. Section 6ll(d) of the Older Americans Act does not mean that participants in the Foster Grandparents' Program are not employees of the Commonwealth. 3. As employees of the Commonwealth, participants in the Foster Grandparents' Program are eligible for state insurance plans, the State Retirement Program, the State Unemployment Compensation System, and the Workmens' Compensa- tion Program. Honorable Helene Wohlgemuth Secretary of Public Welfare Harrisburg, Pennsylvania Dear Secretary Wohlgemuth: Harrisburg, Pa. February 22, 1974 You have asked me whether participants in the Foster Grand- parents' Program should be included in the State Employes' Retirement Program, the Unemployment Compensation System, the Workmens' Compensation System and various state insurance programs. This question arises because a recent amendment tc the Older Americans Act provides: "Notwithstanding any other provision of law, no compen- sation provided to individual volunteers under this part shall be considered income for any purpose whatsoever." 42 U.S.C. §3044(b), (d). Foster grandparents, who are volunteers covered by the Older Americans Act, are assigned to state institutions for the retarded. They work four hours each day for a five-day week. They are paid $2.61 per hour, of which $1.60 is Federal money. You have in- formed me that the foster grandparents are subject to all state per- sonnel rules and policies and that the Department controls their hours of employment, patient assignments, supervision, evalua- tion, and other conditions of employment. Nevertheless, since the compensation provided foster grandparents can n_o _longer ~e con- sidered "income," you have asked whether part1c1pants m that program can still be considered employees of the Commonwealth for purposes of the programs listed above. You are advised that participants in the Foster Grandparents' Program are employees of the Commonwealth and are eligible for each of the above-listed programs. Section 611(d) of the Older Americans Act does not state that 44 OPINIONS OF THE ATTORNEY GENERAL volunteers under the program cannot be. considered e~ploy~es. The term "income" is not synonymous wit~ legal conside~ation. For example a personal maintenance fee might not be considered income but cbuld be sufficient consideration to SUPJ;>Ort a contract. It is my opinion that the use of the term "income rather than a broader term such as "consideration," "compensation," or "wage," indicates that the· purpose of Section 611( d) was simply to exempt the income of foster grandparents from state and federal income taxes and social security taxes. Moreover, if the language in Sec- tion 611(d) were interpreted to equate "income" with "considera- tion" so that foster grandparents could no longer be considered employees of the Commonwealth, they would be left without the protection of those insurance policies that cover Commonwealth employees as well as without the protection of the various state i:>rograms designed to protect employees. Such a result would con- flict not only with the general purposes of the Older Americans Act (see 42 U.S.C. §§3001, 3003), but also with the specific pur- pose behind Section 611(d) itself-to encourage participation in the Foster Grandparents' Program. In addition, the legislative objec- tives of the State Workmens' Compensation Act, Unemployment Compensation Act, and the Retirement Code would be frustrated. Neither the language nor the purpose of Section 611(d) compels this result. Since foster grandparents receive legal consideration in return for services provided and since they are subject to the direction and control of the Department of Public Welfare in the perfor- mance of their duties, they fulfill the traditional criteria of employees. Therefore, state insurance programs for which only employees are eligible should be extended to protect foster grand- parents. For example, public liability insurance covering all state employees1 should be considered to extend to foster grandparents. I reach the same conclusion with respect to the State Employes' Retirement Program, the Unemployment Compensation Program, and the Workmens' Compensat10n Program. I shall discuss these three latter programs in more detail. A. State Employes' Retirement Program The State Employes' Retirement Code defines "state employee" to mean: "(a) Any person holding a State office or position under the Commonwealth, employed on a yearly or a monthly basis by th~ State government of the Commonwealth, in any capacity whatsoever except any officer or employee employed on a per diem or hourly basis for less than one hundred (100) days or seven hundred fifty (750) hours .... " (There follow certain other exceptions not applicable here.) 71 P.S. §1725-102(6) (a). 1. 71 P.S. §634(b). OPINIONS OF THE ATTORNEY GENERAL 45 Qbviously, foster grandparents are employees within this defini- tion. Membership in the State Employes' Retirement Program is mandat~ry for all state employees except for certain exempt categone.s not relevant here.2 Therefore, foster grandparents must be considered members of the State Employes retirement program. The amount of each employee's contribution to the retirement fund is determined, inter alia, according to his salary. Although "salary" is not defined in the act, "compensation" is defined to mean "all compensation received, including all overtime or other extra compensation and maintenance allowances but excluding refunds for expenses incidental to employment.. .. " 71 P.S. §1725- 102(15). The compensation paid to foster grandparents falls within this meaning and should be used as a basis for determining proper contribution to the retirement fund. B. Unemployment Compensation The Unemployment Compensation Law , as amended, September 27, 1971, subjects all state employees to the Unemploy- ment Compensation Act: "Notwithstanding any other prov1s10ns of this act, the Commonwealth of Pennsylvania and all its 'departments, bureaus, boards, agencies, commissions and authorities shall be deemed to be an employer and services performed in the employ of the Commonwealth and all of its departments .. . shall be deemed to constitute State employ- ment subject to this Act.. .. " 43 P.S. §891. Since foster grandparents are paid a "remuneration" and provide a service to the Commonwealth under the control and direction of the Department, they must be considered as being in the employ of the Commonwealth. See 43 P.S. §753(1). Therefore, foster grandparents are subject to the Unemployment Compensa- tion Law. Benefits under this law are figured on the basis of a formula bas- ed on the employer's wages. See 43 P.S. §804. The act defines "wages" to mean "all remuneration, (incl!-lding the cash value of mediums of payment other than cash) paid by an employer to an individual with respect to his employment.. .. " (There follow a number of exceptions not relevant here). 43 P.S. §753(x). Therefore, the compensation paid foster grandparents should be considered wages for purposes of figuring contributions and benefits under this Act. 2. See 71 P.S. §1725-102. 46 OPINIONS OF THE ATTORNEY GENERAL C. Workmens' Compensation Participation in the Workmens' Compel'.sation Program is voluntary but eligibility for the program 1s dependent on an employer:employee relationship. The Act declares "employer" "[T]o be synonymous with master, and to include ... the Commonwealth, and all governmental agencies created by it." 77 P.S. §21. The Act defines "employee" as a "servant," which includes "[A]ll natural persons, who perform services for another for a valuable consideration .... "(There follow exceptions not relevant here). 77 P.S. §22. Since foster grandparents are paid compensation and are directed and controlled in the performance of their duties by the Com- monwealth, there can be little doubt that a master-servant relationship exists between the foster grandparents and the Department of Public Welfare. Calculation of benefits under the Workmens' Compensation scheme is based upon the concept of wages. See 77 P.S. §§511-541. Nothing in the definition of "wages" in the act would exclude from the meaning of that term the compensation paid to foster grand- parents. See 77 P.S. §582. Therefore, foster grandparents would be considered eligible for the Workmens' Compensation Program and their compensation should be considered "wages" within the meaning of that Act. SUMMARY Section 611(d) of the Older Americans Act prohibits the compen- sation paid to foster grandparents from being treated as "income." But the provision cannot be construed to mean that foster grand- parents are not paid legal consideration, remuneration, compensa- t10n, salary, or wages, as those terms are used in the various state statutes discussed above. Therefore, you are advised that par- ticipants in the Foster Grandparents' Program are state ef'.lplo}'ees e ligib~e for the programs listed, and the rate of con- tribut10n or entitlement under the listed programs should be calculated based upon the rate of compensation paid to the foster grandparents. A contrary conclusion would leave foster grand- par.ents. with?ut. state insurance coverage, would frustrate the leg1slat1ve obJect1ves of the State Employes' Retirement Act the State U nei:nployment Compensation Act, the State Work~ens ' Compensat1C!n Act, and,_ theref~:ir~, the protective objectives of the Older American~ Act. Smee this mterpretation of Section 61 l(d) of the Older Americans Act renders that Act compatible with the OPINIONS OF THE ATTORNEY GENERAL 47 state statutes discussed, there is no need to discuss the applicabili- ty of the Supremacy Clause of the United States Constitution. Very truly yours, Robert F. Nagel Deputy Attorney General Israel Packel Attorney General