S‑0908.1   _____________________________________________






State of Washington      57th Legislature     2001 Regular Session


By Senators Costa, Prentice, Fairley and Kohl‑Welles


Read first time 02/08/2001.  Referred to Committee on Labor, Commerce & Financial Institutions.

_1      AN ACT Relating to civil penalties for prevailing wage

_2  settlements; and amending RCW 39.12.065.




_4      Sec. 1.  RCW 39.12.065 and 1994 c 88 s 1 are each amended to read

_5  as follows:

_6      (1) Upon complaint by an interested party, the director of

_7  labor and industries shall cause an investigation to be made to

_8  determine whether there has been compliance with this chapter and

_9  the rules adopted hereunder, and if the investigation indicates

10  that a violation may have occurred, a hearing shall be held in

11  accordance with chapter 34.05 RCW.  The director shall issue a

12  written determination including his or her findings after the

13  hearing.  A judicial appeal from the director's determination may be

14  taken in accordance with chapter 34.05 RCW, with the prevailing

15  party entitled to recover reasonable costs and attorneys fees.

16      A complaint concerning nonpayment of the prevailing rate of

17  wage shall be filed with the department of labor and industries no

18  later than thirty days from the acceptance date of the public

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_1  works project.  The failure to timely file such a complaint shall

_2  not prohibit a claimant from pursuing a private right of action

_3  against a contractor or subcontractor for unpaid prevailing

_4  wages.  The remedy provided by this section is not exclusive and is

_5  concurrent with any other remedy provided by law.

_6      (2) To the extent that a contractor or subcontractor has not

_7  paid the prevailing rate of wage under a determination issued as

_8  provided in subsection (1) of this section, the director shall

_9  notify the agency awarding the public works contract of the amount

10  of the violation found, and the awarding agency shall withhold, or

11  in the case of a bond, the director shall proceed against the bond

12  in accordance with the applicable statute to recover, such amount

13  from the following sources in the following order of priority

14  until the total of such amount is withheld:

15      (a) The retainage or bond in lieu of retainage as provided in

16  RCW 60.28.010;

17      (b) If the claimant was employed by the contractor or

18  subcontractor on the public works project, the bond filed by the

19  contractor or subcontractor with the department of labor and

20  industries as provided in RCW 18.27.040 and ((19.28.120))

21  19.28.041;

22      (c) A surety bond, or at the contractor's or subcontractor's

23  option an escrow account, running to the director in the amount of

24  the violation found; and

25      (d) That portion of the progress payments which is properly

26  allocable to the contractor or subcontractor who is found to be in

27  violation of this chapter.  Under no circumstances shall any portion

28  of the progress payments be withheld that are properly allocable

29  to a contractor, subcontractor, or supplier, that is not found to

30  be in violation of this chapter.

31      The amount withheld shall be released to the director to

32  distribute in accordance with the director's determination.

33      (3) A contractor or subcontractor that is found, in accordance

34  with subsection (1) of this section, to have violated the

35  requirement to pay the prevailing rate of wage or settles a wage

36  claim with the department of labor and industries for failure to

37  pay the prevailing rate of wage shall be subject to a civil

38  penalty of not less than one thousand dollars or an amount equal

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_1  to twenty percent of the total prevailing wage violation found on

_2  the contract, whichever is greater, and shall not be permitted to

_3  bid, or have a bid considered, on any public works contract until

_4  such civil penalty has been paid in full to the director.  If a

_5  contractor or subcontractor is found to have participated in a

_6  violation of the requirement to pay the prevailing rate of wage

_7  for a second time within a five-year period, the contractor or

_8  subcontractor shall be subject to the sanctions prescribed in this

_9  subsection and as an additional sanction shall not be allowed to

10  bid on any public works contract for two years.  If a previous or

11  subsequent violation of a requirement to pay a prevailing rate of

12  wage under federal or other state law is found against the

13  contractor or subcontractor within five years from a violation

14  under this section, the contractor or subcontractor shall not be

15  allowed to bid on any public works contract for two years.  A

16  contractor or subcontractor shall not be barred from bidding on

17  any public works contract if the contractor or subcontractor

18  relied upon written information from the department to pay a

19  prevailing rate of wage that is later determined to be in

20  violation of this chapter.  The civil penalty and sanctions under

21  this subsection shall not apply to a violation determined by the

22  director to be an inadvertent filing or reporting error.  To the

23  extent that a contractor or subcontractor has not paid the

24  prevailing wage rate under a determination issued as provided in

25  subsection (1) of this section, the unpaid wages shall constitute

26  a lien against the bonds and retainage as provided herein and in

27  RCW 18.27.040, ((19.28.120)) 19.28.041, 39.08.010, and 60.28.010.


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