WSR 06-17-136

PROPOSED RULES

DEPARTMENT OF

LABOR AND INDUSTRIES

[ Filed August 22, 2006, 9:13 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 06-03-105.

Title of Rule and Other Identifying Information: WAC 296-126-023 Payment interval, 296-128-035 Payment interval, and 296-131-010 Payment interval.

Hearing Location(s): Department of Labor and Industries, 7273 Linderson Way S.W., Room S118, Tumwater, WA, on October 2, 2006, at 1:30 p.m.

Date of Intended Adoption: October 31, 2006.

Submit Written Comments to: Sally Elliott, P.O. Box 44400, Olympia, WA 98504-4400, e-mail yous235@lni.wa.gov, fax (360) 902-5292, by October 2, 2006.

Assistance for Persons with Disabilities: Contact Sally Elliott by September 15, 2006, at yous235@lni.wa.gov or (360) 902-6411.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The purpose of this rule making is to incorporate the payment interval administrative policy regarding the rules. By integrating the policy into rule and expanding the rule to clarify different payment intervals approaches, the payment interval rule will be easier to use, understand, and provide greater certainty and consistency without having to rely on additional documents. The amendments will:

1. Retain the requirement that employers must pay all wages at no longer than monthly intervals on regular pay days.

2. Continue to require an employer to implement a regular payroll system in which wages from up to seven days before pay day may be withheld if paying at a monthly interval.

3. Continue to require that paychecks must be mailed on the established pay day and funds provided by direct deposit or electronic means must be available on the established pay day.

4. Employers are required to pay wages no later than ten days after the end of the pay period, except for monthly payroll systems.

5. Allow employers to establish separate pay periods for regular and overtime wages plus commission and other specialty pay as long as workers are paid no later than the pay day for the following pay period.

Reasons Supporting Proposal: See Purpose above.

Statutory Authority for Adoption: Chapters 49.12, 49.30, and 49.46 RCW.

Statute Being Implemented: Chapters 49.12, 49.30, and 49.46 RCW.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: Department of labor and industries, governmental.

Name of Agency Personnel Responsible for Drafting: Rich Ervin, Tumwater, Washington, (360) 902-5310; Implementation and Enforcement: Patrick Woods, Tumwater, Washington, (360) 902-6348.

No small business economic impact statement has been prepared under chapter 19.85 RCW. This rule is specifically exempt from the SBEIS requirement because its intent is to clarify rule language without changing its effect (see RCW 19.85.025(2) referencing RCW 34.05.310 (4)(d)).

A cost-benefit analysis is not required under RCW 34.05.328. This rule is specifically exempt from the cost-benefit analysis requirement because its intent is to clarify rule language without changing its effect (see RCW 34.05.310 (4)(d)).

August 22, 2006

Gary Weeks

Director

OTS-9089.2


AMENDATORY SECTION(Amending Order 89-16, filed 10/24/89, effective 11/24/89)

WAC 296-126-023   Payment interval.   ((All wages due shall be paid at no longer than monthly intervals to each employee on established regular pay days. To facilitate bookkeeping, an employer may implement a regular payroll system in which wages from up to seven days before pay day may be withheld from the pay period covered and included in the next pay period.)) (1) This rule shall apply to employers and employees subject to chapter 49.12 RCW.

Note: Employers and employees not subject to this regulation may still be subject to the payment interval requirements of WAC 296-128-035 or 296-131-010.

(2) Definitions:

(a) "Monthly interval" means a one-month time period between established pay days.

(b) "Pay day" means a specific day or date established by the employer on which wages are paid for hours worked during a pay period.

(c) "Payment interval" means the amount of time between established pay days. A payment interval may be daily, weekly, bi-weekly, semi-monthly or monthly.

(d) "Pay period" means a defined time frame for which an employee will receive a paycheck. A pay period may be daily, weekly, bi-weekly, semi-monthly or monthly.

(3) An employer shall pay all wages owed to an employee on an established regular pay day at no longer than monthly payment intervals. If federal law provides specific payment interval requirements that are more favorable to an employee than the payment interval requirements provided under this rule, federal law shall apply.

(4) If an employer pays wages on the basis of a pay period that is less than a month, the employer shall establish a regular pay day no later than ten calendar days after the end of the pay period, unless expressly provided otherwise by law.

Example 1: Employer establishes a weekly pay period. The workweek is from Sunday January 1 through Saturday January 7. Unless a different payment interval applies by law, the employer must pay wages no later than January 17.

Example 2: Employer establishes two semi-monthly pay periods (the first pay period covers the 1st day of the month to the 15th day of the month; the second pay period covers the 16th day of the month to the last day of the month). Unless a different payment interval applies by law, the employer must pay wages no later than the 25th day of the current month for the first pay period, and no later than the 10th day of the following month for the second pay period.

(5) If an employer pays wages on the basis of a monthly pay period, the employer may establish a regular payroll system under which wages for work performed by an employee during the last seven days of the monthly pay period may be withheld and included with the wages paid on the pay day for the next pay period.

Example: Employer establishes a monthly pay period starting on the 1st day of each month with an established pay day on the last day of the month. In a thirty-one-day month, unless a different payment interval applies by law, the employer must pay wages for work performed between the 1st and 24th days of the month on the established pay day (the last day of the month). The employer may pay wages for work performed between the 25th and 31st days of the current month on the following month's pay day (which means that the employer would pay wages for work performed between the 25th and 31st days of the current month, and the 1st and 24th days of the following month, on the following month's pay day).

(6) An employer shall pay nonbase wages owed to an employee (including overtime, bonus pay, and other categories of specialty pay in addition to base pay) on the regular pay day for the pay period in which such nonbase wages were earned. If the correct amount of nonbase wages cannot be determined until after such regular pay day, the employer may establish a separate pay day for nonbase wages; however, the payment of nonbase wages may not be delayed for a period longer than that which is reasonably necessary for the employer to compute and arrange for payment of the amount due, and in no event may payment be delayed beyond the pay period following the pay period in which the nonbase wages were earned.

Example: Employer establishes two semi-monthly pay periods (the first pay period covers the 1st day of the month to the 15th day of the month; the second pay period covers the 16th day of the month to the last day of the month). The employer pays a base hourly wage of fifteen dollars per hour, plus a ten percent commission. Unless a different payment interval applies by law, the employer must pay the base hourly wages no later than the 25th day of the month for the first pay period, and no later than the 10th day of the following month for the second pay period. The employer may pay the additional commission wages no later than the 10th day of the following month for commissions earned during the first pay period, and no later than the 25th day of the following month for commissions earned during the second pay period.

(7) Mailed paychecks shall be postmarked no later than the established pay day. If the established pay day falls on a weekend day or holiday when the business office is not open, mailed paychecks shall be postmarked no later than the next business day. Employers that pay employees by direct deposit or other electronic means shall ensure that such wage payments are made and available to employees on the established pay day.

(8) These rules may be superseded by a collective bargaining agreement negotiated under the National Labor Relations Act, 29 U.S.C. Sec. 151 et seq., the Public Employees' Bargaining Act, RCW 41.56.010 et seq., or the Personnel System Reform Act, RCW 41.80.001 et seq., if the terms of, or recognized custom and practice under, the collective bargaining agreement prescribe specific payment interval requirements for employees covered by the collective bargaining agreement; provided, that:

(a) All base wages (whether paid on an hourly, salary, commission, piece rate, or other basis) shall be paid to employees covered by the collective bargaining agreement ("covered employees") at no longer than monthly intervals;

(b) All other wages (including overtime, bonus pay, and other categories of specialty pay in addition to base pay) are paid in accordance with the payment interval requirements applicable to covered employees under the terms of, or recognized custom and practice under, the collective bargaining agreement; and

(c) The employer pays base wages to covered employees at no less than the applicable minimum wage rate.

[Statutory Authority: RCW 43.22.270, 49.12.020, 49.12.091, 49.12.050, 49.46.020 and 49.46.070. 89-22-016 (Order 89-16), 296-126-023, filed 10/24/89, effective 11/24/89; Order 74-9, 296-126-023, filed 3/13/74, effective 4/15/74.]

OTS-9090.2


AMENDATORY SECTION(Amending Order 89-16, filed 10/24/89, effective 11/24/89)

WAC 296-128-035   Payment interval.   ((All wages due shall be paid at no longer than monthly intervals to each employee on established regular pay days. To facilitate bookkeeping, an employer may implement a regular payroll system in which wages from up to seven days before pay day may be withheld from the pay period covered and included in the next pay period.)) (1) This rule shall apply to employers and employees subject to chapter 49.46 RCW.

Note: Employers and employees not subject to this regulation may still be subject to the payment interval requirements of WAC 296-126-023 or 296-131-010.

(2) Definitions:

(a) "Monthly interval" means a one-month time period between established pay days.

(b) "Pay day" means a specific day or date established by the employer on which wages are paid for hours worked during a pay period.

(c) "Payment interval" means the amount of time between established pay days. A payment interval may be daily, weekly, bi-weekly, semi-monthly or monthly.

(d) "Pay period" means a defined time frame for which an employee will receive a paycheck. A pay period may be daily, weekly, bi-weekly, semi-monthly or monthly.

(3) An employer shall pay all wages owed to an employee on an established regular pay day at no longer than monthly payment intervals. If federal law provides specific payment interval requirements that are more favorable to an employee than the payment interval requirements provided under this rule, federal law shall apply.

(4) If an employer pays wages on the basis of a pay period that is less than a month, the employer shall establish a regular pay day no later than ten calendar days after the end of the pay period, unless expressly provided otherwise by law.

Example 1: Employer establishes a weekly pay period. The workweek is from Sunday January 1 through Saturday January 7. Unless a different payment interval applies by law, the employer must pay wages no later than January 17.

Example 2: Employer establishes two semi-monthly pay periods (the first pay period covers the 1st day of the month to the 15th day of the month; the second pay period covers the 16th day of the month to the last day of the month). Unless a different payment interval applies by law, the employer must pay wages no later than the 25th day of the current month for the first pay period, and no later than the 10th day of the following month for the second pay period.

(5) If an employer pays wages on the basis of a monthly pay period, the employer may establish a regular payroll system under which wages for work performed by an employee during the last seven days of the monthly pay period may be withheld and included with the wages paid on the pay day for the next pay period.

Example: Employer establishes a monthly pay period starting on the 1st day of each month with an established pay day on the last day of the month. In a thirty-one-day month, unless a different payment interval applies by law, the employer must pay wages for work performed between the 1st and 24th days of the month on the established pay day (the last day of the month). The employer may pay wages for work performed between the 25th and 31st days of the current month on the following month's pay day (which means that the employer would pay wages for work performed between the 25th and 31st days of the current month, and the 1st and 24th days of the following month, on the following month's pay day).

(6) An employer shall pay nonbase wages owed to an employee (including overtime, bonus pay, and other categories of specialty pay in addition to base pay) on the regular pay day for the pay period in which such nonbase wages were earned. If the correct amount of nonbase wages cannot be determined until after such regular pay day, the employer may establish a separate pay day for nonbase wages; however, the payment of nonbase wages may not be delayed for a period longer than that which is reasonably necessary for the employer to compute and arrange for payment of the amount due, and in no event may payment be delayed beyond the pay period following the pay period in which the nonbase wages were earned.

Example: Employer establishes two semi-monthly pay periods (the first pay period covers the 1st day of the month to the 15th day of the month; the second pay period covers the 16th day of the month to the last day of the month). The employer pays a base hourly wage of fifteen dollars per hour, plus a ten percent commission. Unless a different payment interval applies by law, the employer must pay the base hourly wages no later than the 25th day of the month for the first pay period, and no later than the 10th day of the following month for the second pay period. The employer may pay the additional commission wages no later than the 10th day of the following month for commissions earned during the first pay period, and no later than the 25th day of the following month for commissions earned during the second pay period.

(7) Mailed paychecks shall be postmarked no later than the established pay day. If the established pay day falls on a weekend day or holiday when the business office is not open, mailed paychecks shall be postmarked no later than the next business day. Employers that pay employees by direct deposit or other electronic means shall ensure that such wage payments are made and available to employees on the established pay day.

(8) These rules may be superseded by a collective bargaining agreement negotiated under the National Labor Relations Act, 29 U.S.C. Sec. 151 et seq., the Public Employees' Bargaining Act, RCW 41.56.010 et seq., or the Personnel System Reform Act, RCW 41.80.001 et seq., if the terms of, or recognized custom and practice under, the collective bargaining agreement prescribe specific payment interval requirements for employees covered by the collective bargaining agreement; provided, that:

(a) All base wages (whether paid on an hourly, salary, commission, piece rate, or other basis) shall be paid to employees covered by the collective bargaining agreement ("covered employees") at no longer than monthly intervals;

(b) All other wages (including overtime, bonus pay, and other categories of specialty pay in addition to base pay) are paid in accordance with the payment interval requirements applicable to covered employees under the terms of, or recognized custom and practice under, the collective bargaining agreement; and

(c) The employer pays base wages to covered employees at no less than the applicable minimum wage rate.

[Statutory Authority: RCW 43.22.270, 49.12.020, 49.12.091, 49.12.050, 49.46.020 and 49.46.070. 89-22-016 (Order 89-16), 296-128-035, filed 10/24/89, effective 11/24/89.]

OTS-9091.2


AMENDATORY SECTION(Amending Order 89-15, filed 10/24/89, effective 11/24/89)

WAC 296-131-010   Payment interval.   ((All wages due shall be paid at no longer than monthly intervals to each employee on established regular pay days, unless federal law requires more frequent pay intervals. To facilitate bookkeeping, an employer may implement a regular payroll system in which wages from up to seven days before pay day may be withheld from the pay period covered and included in the next pay period.)) (1) This rule shall apply to employers and employees engaged in agricultural labor as defined in RCW 50.04.150 and subject to WAC 296-131-001.

Note: Employers and employees not subject to this regulation may still be subject to the payment interval requirements of WAC 296-126-023 or 296-128-035.

(2) Definitions:

(a) "Monthly interval" means a one-month time period between established pay days.

(b) "Pay day" means a specific day or date established by the employer on which wages are paid for hours worked during a pay period.

(c) "Payment interval" means the amount of time between established pay days. A payment interval may be daily, weekly, bi-weekly, semi-monthly or monthly.

(d) "Pay period" means a defined time frame for which an employee will receive a paycheck. A pay period may be daily, weekly, bi-weekly, semi-monthly or monthly.

(3) An employer shall pay all wages owed to an employee on an established regular pay day at no longer than monthly payment intervals. If federal law provides specific payment interval requirements that are more favorable to an employee than the payment interval requirements provided under this rule, federal law shall apply.

(4) If an employer pays wages on the basis of a pay period that is less than a month, the employer shall establish a regular pay day no later than ten calendar days after the end of the pay period, unless expressly provided otherwise by law.

Example 1: Employer establishes a weekly pay period. The workweek is from Sunday January 1 through Saturday January 7. Unless a different payment interval applies by law, the employer must pay wages no later than January 17.

Example 2: Employer establishes two semi-monthly pay periods (the first pay period covers the 1st day of the month to the 15th day of the month; the second pay period covers the 16th day of the month to the last day of the month). Unless a different payment interval applies by law, the employer must pay wages no later than the 25th day of the current month for the first pay period, and no later than the 10th day of the following month for the second pay period.

(5) If an employer pays wages on the basis of a monthly pay period, the employer may establish a regular payroll system under which wages for work performed by an employee during the last seven days of the monthly pay period may be withheld and included with the wages paid on the pay day for the next pay period.

Example: Employer establishes a monthly pay period starting on the 1st day of each month with an established pay day on the last day of the month. In a thirty-one-day month, unless a different payment interval applies by law, the employer must pay wages for work performed between the 1st and 24th days of the month on the established pay day (the last day of the month). The employer may pay wages for work performed between the 25th and 31st days of the current month on the following month's pay day (which means that the employer would pay wages for work performed between the 25th and 31st days of the current month, and the 1st and 24th days of the following month, on the following month's pay day).

(6) An employer shall pay nonbase wages owed to an employee (including overtime, bonus pay, and other categories of specialty pay in addition to base pay) on the regular pay day for the pay period in which such nonbase wages were earned. If the correct amount of nonbase wages cannot be determined until after such regular pay day, the employer may establish a separate pay day for nonbase wages; however, the payment of nonbase wages may not be delayed for a period longer than that which is reasonably necessary for the employer to compute and arrange for payment of the amount due, and in no event may payment be delayed beyond the pay period following the pay period in which the nonbase wages were earned.

Example: Employer establishes two semi-monthly pay periods (the first pay period covers the 1st day of the month to the 15th day of the month; the second pay period covers the 16th day of the month to the last day of the month). The employer pays a base hourly wage of fifteen dollars per hour, plus a ten percent commission. Unless a different payment interval applies by law, the employer must pay the base hourly wages no later than the 25th day of the month for the first pay period, and no later than the 10th day of the following month for the second pay period. The employer may pay the additional commission wages no later than the 10th day of the following month for commissions earned during the first pay period, and no later than the 25th day of the following month for commissions earned during the second pay period.

(7) Mailed paychecks shall be postmarked no later than the established pay day. If the established pay day falls on a weekend day or holiday when the business office is not open, mailed paychecks shall be postmarked no later than the next business day. Employers that pay employees by direct deposit or other electronic means shall ensure that such wage payments are made and available to employees on the established pay day.

(8) These rules may be superseded by a collective bargaining agreement negotiated under the National Labor Relations Act, 29 U.S.C. Sec. 151 et seq., the Public Employees' Bargaining Act, RCW 41.56.010 et seq., or the Personnel System Reform Act, RCW 41.80.001 et seq., if the terms of, or recognized custom and practice under, the collective bargaining agreement prescribe specific payment interval requirements for employees covered by the collective bargaining agreement; provided, that:

(a) All base wages (whether paid on an hourly, salary, commission, piece rate, or other basis) shall be paid to employees covered by the collective bargaining agreement ("covered employees") at no longer than monthly intervals;

(b) All other wages (including overtime, bonus pay, and other categories of specialty pay in addition to base pay) are paid in accordance with the payment interval requirements applicable to covered employees under the terms of, or recognized custom and practice under, the collective bargaining agreement; and

(c) The employer pays base wages to covered employees at no less than the applicable minimum wage rate.

[Statutory Authority: RCW 43.22.270, 1989 c 380 and chapter 49.46 RCW. 89-22-015 (Order 89-15), 296-131-010, filed 10/24/89, effective 11/24/89.]

Washington State Code Reviser's Office