#### Supplemental Unemployment Benefit Plan Payments

*373November 30, 1956.

Harry J.- Rubin, Deputy Attorney General, Herbert B. Cohen, Attorney General,

—You have requested this department to advise you whether- payments made by employers pursuant to the terms of supplemental unemployment benefit plans * are subject to the contribution provisions of the Unemployment Compensation Law of December 5, 1936, P. L. (1937) 2897.

Under section 301 of the Pennsylvania Unemployment Compensation Law, employer contributions are based upon a percentage of wages paid by him for employment: Act of December 5, 1936, P. L. (1937) 2897, sec. 301, 43 PS §781. Therefore, the determination of whether supplemental unemployment benefit payments are subject to contribution depends, primarily, on whether such payments are wages as defined in the act.

The definition of “wages” is contained in section *A{%)*of the act. It states:

> “ ‘Wages’ means all remuneration, (including the cash value of mediums of payments other than cash), paid by an employer to an individual with respect to his employment . . Act of December 5,1936, P. L. (1937) 2897, sec. 4(a>), 43 PS §753.

In Pendleton Unemployment Compensation Case, 167 Pa. Superior Ct. 256, 75 A 2d 3 (1950), the court held that pension payments are not wages within the meaning of this provision or “remuneration” under section *A{u)*in determining whether or not the recipient was disqualified from receiving benefits. It also noted that payments by an employer to a pension fund are not “wages” under the exclusion, in section *374*A(x)*(2) *(i),*for payments made into a fund for retirement purposes.

In Formal Opinion No. 658, issued January 26, 1956, 5 D. & C. 2d 627, we stated, in referring to supplemental unemployment benefits:

> “. . . they are similar to payments made currently by an employer into a retirement or pension fund or into a workmen’s compensation fund. If, as indicated by the Court in the *Pendleton*decision, the ultimate receipt of benefits from such funds does not constitute ‘remuneration’ under the Unemployment Compensation Law, it follows that the receipt of benefits from the trust funds . . . likewise do not constitute ‘remuneration’.” ■

This analogy is pertinent to the present case. We are of. the opinion, therefore, that such contributions áre not “remuneration,” and, hence, not “wages,” within the meaning of section 4(cc).

It'should be noted, also, that the Federal Internal Revenue Service has ruled that such contributions are deductible from gross income as business expenses for income tax purposes: Rev. Rui. 56-102, 1956-12, 5. The service also has stated that these contributions are not “wages” under the Federal unemployment tax act: Internal Revenue Code of August 16, 1954, 68A Stat. 447, sec. 3306(6). Since, under section *A{%)*(6) of the Pennsylvania Unemployment Compensation Law, payments deemed “wages” under the Federal act are also deemed such under the Pennsylvania act, a negative implication supports our conclusion that such payments are not “wages” under section *A(x)*of the Pennsylvania law.

Accordingly, you are advised that payments made by employers pursuant to the terms of supplemental unemployment benefit plans are not subject to the contribution provisions' of the Pennsylvania Unemployment Compensation Law.

*

 A “supplemental unemployment benefit plan” is a program under which a private industry pays stipulated amounts to laid-off workers during the period of layoff in addition to the unemployment benefits these workers receive from the State. Such plans are popularly known as guaranteed annual wage plans.