1311-S AMH MCCO REIN 146

1311-S AMH .... REIN 146

SHB 1311 - H AMD

By Representative ____________

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. A new section is added to chapter 49.48 RCW to read as follows:

DEFINITIONS. For purposes of this chapter:

(1) "Citation" means a written determination from the department to an employer that a recordkeeping requirement or a wage payment requirement has been violated.

(2) "Department" means the department of labor and industries.

(3) "Director" means the director of the department of labor and industries, or the director's authorized representative.

(4) "Employee" has the meaning provided in RCW 49.12.005(4).

(5) "Employer" has the meaning provided in RCW 49.46.010(4), except that "employer" shall not be construed to provide for individual liability for penalties assessed under section 5 of this act.

(6) "Notice of assessment" means a written notice from the department to an employer that, on the basis of a citation, wages, interest, or penalties, or a combination thereof, are due and payable to the employee or department as set forth in section 5 of this act.

(7) "Recordkeeping requirement" means a recordkeeping requirement set forth in RCW 49.12.041, 49.12.050, 49.12.105, 49.46.040, 49.46.070, or 49.52.050, and any related rules adopted by the department.

(8) "Wage" has the meaning provided in RCW 49.46.010(2).

(9) "Wage payment requirement" means a wage payment requirement set forth in chapter 49.12, 49.30, 49.46, or 49.52 RCW or this chapter, and any related rules adopted by the department. "Wage payment requirement" does not include any conditions of labor set forth in chapter 49.12 RCW.

Sec. 2. RCW 49.48.040 and 1987 c 172 s 1 are each amended to read as follows:

ENFORCEMENT OF WAGE CLAIMS. (1) The department ((of labor and industries)) may:

(a) Conduct investigations to enforce and ensure compliance with this chapter and chapters 39.12, 49.12, 49.30, 49.46, and 49.52 RCW, including investigations commenced upon obtaining information indicating an employer may be committing a violation under these chapters ((39.12, 49.46, and 49.48 RCW, conduct investigations to ensure compliance with chapters 39.12, 49.46, and 49.48 RCW));

(b) ((Order the payment of)) Issue a citation or notice of assessment ordering an employer to pay all wages owed the ((workers)) employees, including interest of up to one percent per month on the unpaid wages to the employee, and any penalties assessed under section 5 of this act; and

(c) Take assignments of wage claims and prosecute actions for the collection of wages of persons who are financially unable to employ counsel when in the judgment of the director of the department the claims are valid and enforceable in the courts)) to recover wages determined to be owed to employees in any superior court or other court of competent jurisdiction of the county where the violation is alleged to have occurred, or the department may use the procedures for recovery of wages in a court action set forth in this chapter and chapter 49.52 RCW.

(2) The director ((of the department or any authorized representative)) may, for the purpose of carrying out RCW 49.48.010 and 49.48.040 through 49.48.080: (a) Issue subpoenas to compel the attendance of witnesses or parties and the production of books, papers, or records; (b) administer oaths and examine witnesses under oath; (c) take the verification of proof of instruments of writing; and (d) take depositions and affidavits. If assignments for wage claims are taken, court costs shall not be payable by the department for prosecuting such suits.

(3) The director shall have a seal inscribed "Department of Labor and Industries--State of Washington" and all courts shall take judicial notice of such seal. Obedience to subpoenas issued by the director ((or authorized representative)) shall be enforced by the courts in any county.

(4) The director ((or authorized representative)) shall have free access to all places and works of labor. Any employer or any agent or employee of such employer who refuses the director ((or authorized representative)) admission therein, or who, when requested by the director ((or authorized representative)), willfully neglects or refuses to furnish the director ((or authorized representative)) any statistics or information pertaining to his or her lawful duties, which statistics or information may be in his or her possession or under the control of the employer or agent, shall be guilty of a misdemeanor.

(5) The director shall commence a civil action on any citation or notice of assessment within three years after the cause of action accrues, unless a longer period of time applies under law. The cause of action for wage claims accrues from the date when the wages are due.

Sec. 3. RCW 49.48.060 and 1971 ex.s. c 55 s 4 are each amended to read as follows:

WAGE BONDS. (1) If upon investigation by the director, ((after taking assignments of any wage claim under RCW 49.48.040,)) it appears to the director that the employer is representing to his or her employees that he or she is able to pay wages for their services and that the employees are not being paid for their services, the director may require the employer to give a bond in such sum as the director deems reasonable and adequate in the circumstances, with sufficient surety, conditioned that the employer will for a definite future period not exceeding six months conduct his or her business and pay his or her employees in accordance with the laws of the state of Washington.

(2) If within ten business days after demand for such bond the employer fails to provide the same, the director may commence a suit against the employer in the superior court of appropriate jurisdiction to compel him or her to furnish such bond or cease doing business until he or she has done so. The employer shall have the burden of proving the amount thereof to be excessive.

(3) If the court finds that there is just cause for requiring such bond and that the same is reasonable, necessary or appropriate to secure the prompt payment of the wages of the employees of such employer and his or her compliance with RCW 49.48.010 through 49.48.080, the court shall enjoin such employer from doing business in this state until the requirement is met, or shall make other, and may make further, orders appropriate to compel compliance with the requirement.

((Upon being informed of a wage claim against an employer or former employer, the director shall, if such claim appears to be just, immediately notify the employer or former employer, of such claim by mail. If the employer or former employer fails to pay the claim or make satisfactory explanation to the director of his failure to do so, within thirty days thereafter, the employer or former employer shall be liable to a penalty of ten percent of that portion of the claim found to be justly due. The director shall have a cause of action against the employer or former employer for the recovery of such penalty, and the same may be included in any subsequent action by the director on said wage claim, or may be exercised separately after adjustment of such wage claim without court action.))

Sec. 4. RCW 49.48.070 and 1935 c 96 s 4 are each amended to read as follows:

ENFORCEMENT. It shall be the duty of the director ((of labor and industries)) to inquire diligently for any violations of RCW 49.48.010 and 49.48.040 through 49.48.080, and to institute the actions for penalties herein provided, and to enforce generally the provisions of RCW 49.48.010 and 49.48.040 through 49.48.080.

NEW SECTION. Sec. 5. A new section is added to chapter 49.48 RCW to read as follows:

CITATIONS AND ASSESSMENTS OF CIVIL PENALTIES. (1) An employer determined to have violated a wage payment requirement in a citation or notice of assessment issued by the director shall pay the wages due, including interest of up to one percent per month on the unpaid wages, to the employee, and may be assessed a civil penalty of not less than one hundred dollars and not more than one thousand dollars for each violation per employee. Each day a violation occurs is a separate violation. The director may also claim the remedies in RCW 49.52.070. If the employer pays all wages due to the employee, the director may waive collection of a penalty assessed under this subsection in whole or in part.

(2) An employer determined to have violated a recordkeeping requirement that results in a violation of a wage payment requirement may be assessed a civil penalty of not less than one hundred dollars and not more than one thousand dollars for each violation per employee, and may be assessed a civil penalty of not more than one thousand dollars for each subsequent violation found in the citation or notice of assessment. Each day a violation occurs is a separate violation.

(3) Civil penalties under this section may be assessed only if the director determines that the violation was a knowing violation. For purposes of this subsection, "knowing violation" means a violation that is intentional and is neither accidental nor the result of a bona fide dispute over an issue of doubtful legal certainty, as evaluated under the standards applicable to wage payment violations under RCW 49.52.050(2).

(4) Civil penalties under this section shall not be assessed if the employer reasonably relied on: (a) A rule related to any wage payment requirement or recordkeeping requirement; (b) a written order, ruling, approval, determination or interpretation of the director; or (c) an interpretive or administrative policy issued by the department and filed with the office of the code reviser.

(5) An employer assessed civil penalties under this section must, within thirty days of the department's issuance of the citation or notice of assessment, either pay the wages and interest owed or appeal the citation or notice of assessment as provided in section 6 of this act.

(6) Civil penalties collected under this section shall be paid to the director for deposit in the supplemental pension fund established under RCW 51.44.033.

NEW SECTION. Sec. 6. A new section is added to chapter 49.48 RCW to read as follows:

ADMINISTRATIVE APPEALS. (1) A person, firm, or corporation aggrieved by a citation or notice of assessment issued by the department under this chapter may appeal the action or decision to the director by filing notice of the appeal with the director within thirty days of the department's issuance of a citation or notice of assessment. A citation or notice of assessment not appealed within the thirty-day period is final and binding, and not subject to further appeal.

(2) Upon receipt of an appeal, the director shall assign the hearing to an administrative law judge of the office of administrative hearings to conduct the hearing and issue an initial order. The hearing and review procedures shall be conducted in accordance with chapter 34.05 RCW, and the standard of review by the administrative law judge of an appealed citation or notice of assessment shall be de novo. A party aggrieved by the initial order may file a petition for administrative review of the initial order with the chief administrative law judge within thirty days of the administrative law judge's issuance of the initial order.

(3) The chief administrative law judge shall issue all final orders after appeal of the initial order. The final order of the chief administrative law judge is subject to judicial review in accordance with chapter 34.05 RCW.

(4) A notice of appeal filed with the director under this section shall stay the effectiveness of a citation or notice of assessment of a penalty pending final review of the appeal by the director as provided for in chapter 34.05 RCW.

(5) Orders that are not appealed within the time period specified in this section and chapter 34.05 RCW are final and binding, and not subject to further appeal.

(6) An employer who failed to allow adequate inspection of records subject to investigation by the department under this chapter within a reasonable time period may not use such records in any appeal under this section as to the correctness of any wage determination by the department related to such records.

NEW SECTION. Sec. 7. A new section is added to chapter 49.48 RCW to read as follows:

COLLECTION PROCEDURES. (1) If an employer defaults in a payment of wages and civil penalties payable to the department after a final order is issued under this chapter, the director may file with the clerk of any county within the state, a warrant in the amount of the notice of assessment, plus interest, penalties, and any filing fees. The clerk of the county in which the warrant is filed shall immediately designate a superior court cause number for the warrant, and the clerk shall cause to be entered in the judgment docket under the superior court cause number assigned to the warrant, the name of the employer mentioned in the warrant, the amount of payment, penalty, fine due on it, or filing fee, and the date when the warrant was filed. The aggregate amount of the warrant as docketed becomes a lien upon the title to, and interest in, all real and personal property of the employer against whom the warrant is issued, the same as a judgment in a civil case docketed in the office of the clerk. The sheriff shall proceed upon the warrant in all respects and with like effect as prescribed by law with respect to execution or other process issued against rights or property upon judgment in a court of competent jurisdiction. The warrant so docketed is sufficient to support the issuance of writs of garnishment in favor of the state in a manner provided by law in case of judgment, wholly or partially unsatisfied. The clerk of the court is entitled to a filing fee which will be added to the amount of the warrant. A copy of the warrant shall be mailed to the employer within three days of filing with the clerk.

(2)(a) The director may issue to any person, firm, corporation, other entity, municipal corporation, political subdivision of the state, a public corporation, or any agency of the state, a notice and order to withhold and deliver property of any kind when he or she has reason to believe that there is in the possession of the person, firm, corporation, other entity, municipal corporation, political subdivision of the state, public corporation, or agency of the state, property that is or will become due, owing, or belonging to an employer upon whom a notice of assessment has been served by the department for payments or civil penalties due to the department. The effect of a notice and order is continuous from the date the notice and order is first made until the liability out of which the notice and order arose is satisfied or becomes unenforceable because of lapse of time. The department shall release the notice and order when the liability out of which the notice and order arose is satisfied or becomes unenforceable by reason of lapse of time and shall notify the person against whom the notice and order was made that the notice and order has been released.

(b) The notice and order to withhold and deliver must be served by the sheriff of the county or by the sheriff's deputy, by certified mail, return receipt requested, or by the director. A person, firm, corporation, other entity, municipal corporation, political subdivision of the state, public corporation, or agency of the state upon whom service has been made shall answer the notice within twenty days exclusive of the day of service, under oath and in writing, and shall make true answers to the matters inquired of in the notice and order. Upon service of the notice and order, if the party served possesses any property that may be subject to the claim of the department, the party shall promptly deliver the property to the director. The director shall hold the property in trust for application on the employer's indebtedness to the department, or for return without interest, in accordance with a final determination of a petition for review. In the alternative, the party shall furnish a good and sufficient surety bond satisfactory to the director conditioned upon final determination of liability. If a party served and named in the notice fails to answer the notice within the time prescribed in this section, the court may render judgment by default against the party for the full amount claimed by the director in the notice, together with costs. If a notice is served upon an employer and the property subject to it is wages, the employer may assert in the answer all exemptions provided for by chapter 6.27 RCW to which the wage earner is entitled.

(3) In addition to the procedure for collection of a payment, penalty, or fine due to the department as set forth in this section, the department may recover civil penalties or wages imposed under this chapter in a civil action brought in a court of competent jurisdiction of the county where the violation is alleged to have occurred.

(4) This section does not affect other collection remedies that are otherwise provided by law.

NEW SECTION. Sec. 8. A new section is added to chapter 49.48 RCW to read as follows:

EMPLOYMENT LAW ADVISORY COMMITTEE. (1) The director shall appoint an employment law advisory committee composed of nine members: Four members representing employees, each of whom shall be appointed from a list of at least three names submitted by a recognized statewide organization of employees, representing a majority of employees; four members representing employers, each of whom shall be appointed from a list of at least three names submitted by a recognized statewide organization of employers, representing a majority of employers; and one ex officio member representing the department. The member representing the department shall be chairperson.

(2) The members of the committee shall be appointed for a term of three years commencing on July 1, 2005, and the terms of the members representing the employees and employers shall be staggered so that the director shall designate one member from each group initially appointed whose term shall expire on June 30, 2006, and one member from each group whose term shall expire on June 30, 2007.

(3)(a) The committee shall provide comment on department rule making, policies, and other initiatives related to wage and hour laws. The committee may also conduct a continuing study of any aspect of wage and hour law the committee determines to require its consideration. The committee shall report its findings to the department for action as deemed appropriate.

(b) During the 2005-07 biennium, the committee shall review wage payment and recordkeeping requirements as defined in this chapter, and comparable requirements in 29 U.S.C. Secs. 202 through 262 and related regulations adopted by the United States department of labor, and make findings and recommendations as to appropriate legislative action and/or rule-making activities by December 1 of each year.

(4) The members shall serve without compensation, but are entitled to travel expenses as provided in RCW 43.03.050 and 43.03.060. The committee may utilize such experts, if any, as it requires to discharge its duties and may utilize such personnel and facilities of the department as it needs, without charge. All expenses of the committee must be paid by the department.

NEW SECTION. Sec. 9. A new section is added to chapter 49.48 RCW to read as follows:

RULE-MAKING AUTHORITY. The director may adopt rules to carry out the purposes of this chapter.

NEW SECTION. Sec. 10. A new section is added to chapter 49.46 RCW to read as follows:

RULE-MAKING AUTHORITY. The director may adopt rules to carry out the purposes of this chapter.

NEW SECTION. Sec. 11. CAPTIONS. Captions used in this act are not any part of the law."

Correct the title.

EFFECT:

• Adds definitions of "citation," "employee," "employer," and "notice of assessment." Clarifies that "wage payment requirement" does not include certain conditions of labor.

• Deletes a section that would have codified a rule that employers must pay employees all wages due on established paydays.

• Specifies that the director of the Department of Labor and Industries (Department) must commence civil actions within three years after the date when wages were due.

• Specifies that civil penalties may be assessed only for knowing violations, and defines "knowing violation" as a violation that is intentional and neither accidental nor the result of a bona fide dispute over an issue of doubtful legal certainty.

• Specifies that civil penalties shall not be assessed if the employer reasonably relied on rules, written orders, rulings, approvals, determinations, or interpretations of the director, or policies issue by the Department and filed with the Code Reviser.

• Specifies that civil penalties for recordkeeping violations may be assessed only for recordkeeping violations that result in wage payment violations.

• Requires employers who are assessed civil penalties to pay the wages and interested owed or appeal the citation or notice of assessment within 30 days.

• Specifies that the standard of review applicable to administrative appeals is de novo.

• Specifies that parties aggrieved by initial orders may petition for administrative review of initial orders by the chief administrative law judge.

• Provides that an employer who fails to allow adequate inspection of records within a reasonable time period may not use those records in an appeal as to the correctness of the Department's wage determination.