HonorableOrvilleS. Carpenter OpinionNo. O-2248 Chairmanand ExecutiveDirector Re: Whether or not money paid by Texas UnemploymentCompensationCommission an employerunder the "Annuities, Austin,Texas Insuranceand SavingsProgram"and the "Accidentand Sick BenefitPlan" and "DismissalWages" constitute "wages"under the Texas Unemployment CompensationAct and the regulations of the UnemploymentCompensation Com- Dear Sir: mission in pursuancethereof.
We receivedyour letter datedApril 17, 1940, which.isself explanatory and reads as follows:
"The definitionof 'wages'.foundin the Texas UnemploymentCom- pensationAct (Article%21b-l7poi) is the same definitionwhich was found prior to the Act's amendmenton April 1, 1939. Under this definitionof wages the Comnilssion on July 2, 1937,-adoptedits Regu- I.&ion 36, 'ItemsIncludedas Wages'. .Regulation36 was superseded by the presentRegulation38, 'Wages,'which beca& effectiveby adoptionon September5, 1939* It,is under the statutoryprovision cited,as well as under the regulationsapplicableto the periodsof time indicated,that your opinionis requestedwith respectto the fact situationswhich are to be presented. Does money paid by the corporations which are the employers,under the 'Annuities,Insur- ance,.andSavingsProgram'andthe 'Accidentand Sick BenefitPlan' and a6 'Dismissal Wages' constituteIwages'under'theTexas Unem- ploymentCompensationAct and regulationsin pursuancethereof? This questioncontemplates money paid into the Fundb or Plans as well as money paid to individuals.
"Annuities,Insuraucejand SavingProgram
"On January1, 1938,the Ethyl GasolineCorporationadoptedan 'Annuities,.Insurance,and SavingsProgram'for the benefitof all employeesof the Companywho were in active serviceon January1, 1938. Participationin the plan was, and is, voluntary. For the purposesof this programthe companyestablisheda trust fund, such trust fund being administeredby a corporatetrustee.
"Underthe planall participatingemployeescontributes by salary deductionauthorizations a sum of money not 1es.sthan three per.cent nor more than ten per cent of currentsalary. To this amount the corporationcontributesan equal sum. From these funds each HonorableOrvilleS. Carpenter,Page 2 (0-2248)
participantallots a sum not less than two-thirdsof the total thereoffor annuities. The balance,if any, called 'savings,' remainsas a creditin the employee'saccount In the trust fund.
"A group annuitycontractwas enteredinto by the Company with a Life AssuranceSociety,under which annuitiesere pur- chasedby the Company-withthe amountsallottedfor such pur- poses by the employee. Group annuitiespurchaeedfor a parti- cipantbelong solelyto him. The amount of annuity income payableat retirementdepends,or will depend,upon the age at which such allotmentsare paid to the AssuranceSociety,the age at retirement,the form of annuityselected,and other perti- nent factors.
"Uponterminationof employment,an'employeereceives,or will receive,such paid-updeferredannuitya8 was, or shall have been, purchasedwith his own contribution, or he may elect to re- ceive in lieu thereof cash equal to the sum of his own contribu- tions plus interest. With respectto t&e employingcompany's coqtribution, the participantreceives,or &all receive,a paid- up deferredannuitywhich annuityhas no cash surrendervalue.
'90 the extentthat a participant'screditbalance in his savingsaccountpermits,it may all be used by him to purchase insuranceor it may be withdrawnin cash; provided,however,that the cash withdrawaloptionmay be exercisedonly after the com- pletionof one year's continuousparticipationin the plan, and thereafterat intervalsof not less than twelve months.
"Accidentana Sick BenefitPlan
"Underthis voluntarilyestablishedplan, the companypro- vides for the paymentto eligibleemployees,absent on account of illnessor accident,of benefite.equa1t.o their normal salary or wages for periods ofweeks rangingfrom one to thirteen,de- pendingupon the employees'number of years of service. In ad- ditionto the benefitspaid in accordancewith the provisionsof the plan, the company,a6 a matter of generalpolicy,extends furtherbenefitsin certainmeritoriouscases. The company chargesbenefitspaid under the plan to 'Accidentand