How have courts interpreted collective bargaining agreements on health benefits?

In Martin v. City & County of S.F. (1959) 168 Cal.App.2d 570, 574-576, 336 P.2d 239, the court was called upon to interpret a city charter provision which required certain skilled workers receive the same rate of pay as their counterparts in the private sector. In the private sector those workers received an hourly wage plus health benefits. The court found the city could not deduct the cost of the workers' health benefits without diminishing their rate of pay. [I]t is clear that in the instant case the plaintiffs were not receiving the same take home pay as their counterparts in private industry, because of the compulsory deduction by the employer for the city's health plan. ( Id. at p. 578, 336 P.2d 239.)

The holding and rationale in People v. Alves (1957) 320 P.2d 623, 155 Cal.App.2d Supp. 870, 871-872, has additional import here because in that case the court found health and welfare benefits were wages within the meaning of our Constitution. In People v. Alves the defendant was charged with a misdemeanor violation of the Labor Code for failing to pay the benefits required under a collective bargaining agreement. The defendant argued that under our Constitution he could not be imprisoned for debt. (See former art. I, 15, Cal. Const.) In rejecting the defendant's argument, the court noted an employer's liability for wages was not a debt subject to the constitutional proscription against imprisonment for debt and criminal liability was imposed for failure to pay wages. The court then found the health and welfare benefits

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were part of an employee's wages within the meaning of the Constitution. There is no doubt that payments to a health or welfare fund made as part of the compensation for services rendered by employees are wages as that word is used in the foregoing [case]. ( People v. Alves, supra, 320 P.2d 623, 155 Cal.App.2d Supp. at pp. 872.)