BILL REQ. #:  H-1644.1 

Read first time 02/20/2003.   Referred to Committee on State Government.

     AN ACT Relating to providing living wages on public contracts; adding a new section to chapter 28B.10 RCW; adding a new section to chapter 43.19 RCW; adding a new section to chapter 47.28 RCW; adding a new chapter to Title 39 RCW; providing an effective date; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds that the state annually awards service contracts to private contractors and vendors to provide services on behalf of the state, and that such expenditures should be spent in a manner that promotes the creation of jobs that allow residents to support themselves and their families with dignity. The legislature further finds that the present federal and state minimum wages generate income at a level below the amount required to support a family at a basic level and that jobs that do not pay living wages result in families who have greater need of social services provided by the state and paid for by state taxpayers. The payment of adequate wages to workers for those hours performing services on behalf of the state will promote stability and reduced turnover, resulting in a higher quality of service.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Contract" means public works contracts, personal services contracts, and purchasing contracts for goods and services.
     (2) "Contractor" means any person, firm, or corporation that, in the pursuit of an independent business, undertakes a contract with the state.
     (3) "Department" means the department of labor and industries.
     (4) "Director" means the director of the department of labor and industries.
     (5) "Subcontractor" means any person, firm, or corporation that, in the pursuit of an independent business, undertakes a contract with another person, firm, or corporation who holds a contract with the state.
     (6) "Employee" includes any individual employed by an employer but does not include:
     (a) An individual seventeen years old or younger;
     (b) An individual in a position that is designated for a trainee, apprentice, or is otherwise part of a training program;
     (c) An individual in a work study position, internship, or who is in a position that requires student status as a prerequisite to being employed in that position;
     (d) An individual standing by or on-call according to the criteria established by the fair labor standards act, 29 U.S.C. Sec. 201, but only for those hours when the employee is actually standing by or on-call;
     (e) An individual (i) employed as a hand harvest laborer and paid on a piece rate basis in an operation that has been, and is generally and customarily recognized as having been, paid on a piece rate basis in the region of employment; (ii) who commutes daily from his or her permanent residence to the farm on which he or she is employed; and (iii) who has been employed in agriculture less than thirteen weeks during the preceding calendar year;
     (f) An individual employed in casual labor in or about a private home, unless performed in the course of the employer's trade, business, or profession;
     (g) An individual employed in a bona fide executive, administrative, or professional capacity or in the capacity of outside salesman as those terms are defined by rules of the director. However, those terms shall be defined by the Washington personnel resources board pursuant to chapter 41.06 RCW;
     (h) An individual engaged in the activities of an educational, charitable, religious, state, or local governmental body or agency, or nonprofit organization where the employer-employee relationship does not in fact exist or where the services are rendered to such organizations gratuitously. If the individual receives reimbursement in lieu of compensation for normally incurred out-of-pocket expenses or receives a nominal amount of compensation per unit of voluntary service rendered, an employer-employee relationship is deemed not to exist for the purposes of this chapter or for purposes of membership or qualification in any state, local government, or publicly supported retirement system other than that provided under chapter 41.24 RCW;
     (i) An individual employed full-time by any state or local governmental body or agency who provides voluntary services but only with regard to the provision of the voluntary services. The voluntary services and any compensation therefor does not affect or add to qualification, entitlement, or benefit rights under any state or local government, or publicly supported retirement system other than that provided under chapter 41.24 RCW;
     (j) A newspaper vendor or carrier;
     (k) A carrier subject to regulation by Part 1 of the interstate commerce act;
     (l) An individual engaged in forest protection and fire prevention activities;
     (m) An individual employed by any charitable institution charged with child care responsibilities engaged primarily in the development of character or citizenship or promoting health or physical fitness or providing or sponsoring recreational opportunities or facilities for young people or members of the armed forces of the United States;
     (n) An individual whose duties require that he or she resides or sleeps at the place of his or her employment or who otherwise spends a substantial portion of his or her work time subject to call, and not engaged in the performance of active duties;
     (o) A resident, inmate, or patient of a state, county, or municipal correctional, detention, treatment, or rehabilitative institution;
     (p) An individual who holds a public elective or appointive office of the state, any county, city, town, municipal corporation, quasi-municipal corporation, political subdivision, or any instrumentality thereof, or any employee of the state legislature;
     (q) All vessel operating crews of the Washington state ferries operated by the department of transportation;
     (r) An individual employed as a seaman on a vessel other than an American vessel; or
     (s) An individual subject to a bona fide collective bargaining agreement.

NEW SECTION.  Sec. 3   (1) All contractors and subcontractors covered under this act shall pay employees a living wage no less than ten dollars per hour if health benefits are paid for in whole or in substantial part by the employer, or eleven dollars and fifty cents per hour if health benefits are not so provided.
     (2)(a) Beginning January 1, 2004, and each following January 1st as set forth under (b) of this subsection, every contractor and subcontractor shall pay to each of his or her qualifying employees at a rate of not less than the amount established under (b) of this subsection.
     (b) Beginning September 30, 2003, and on each following September 30th, the department shall calculate an adjusted living wage rate by increasing the current year's living wage rate by the rate of inflation. The adjusted living wage rate shall be calculated to the nearest cent using the consumer price index for urban wage earners and clerical workers, CPI-W, or a successor index, for the twelve months before each September 1st as calculated by the United States department of labor. Each adjusted living wage rate calculated under this subsection (2)(b) takes effect on the following January 1st.

NEW SECTION.  Sec. 4   In circumstances where a contract also requires the contractor or subcontractor to pay its employees prevailing wages, the contractor or subcontractor shall pay its employees at the contractually prescribed prevailing wage rate or the minimum living wage payable under this chapter, whichever is higher.

NEW SECTION.  Sec. 5   The office of financial management may grant an exemption to the requirements of this chapter upon making a written finding either that:
     (1) Compliance with the living wage will cause economic hardship to the state or its citizens; or
     (2) The exemption is in the best interests of the state due to unforeseen or special circumstances including but not limited to a declared natural disaster.

NEW SECTION.  Sec. 6   No contractor or subcontractor shall retaliate or discriminate against an employee in his or her terms and conditions of employment for: (1) Reporting a possible violation of this chapter to the director; (2) participating in any legal or administrative proceeding in respect to this chapter; (3) seeking civil remedies to enforce his or her rights conferred by this chapter; or (4) otherwise asserting his or her rights under this chapter.

NEW SECTION.  Sec. 7   (1) An employee claiming a violation of this chapter may report the violation to the director.
     (2) The department shall have the same administrative and enforcement powers as identified in chapter 49.48 RCW.

NEW SECTION.  Sec. 8   (1) Compliance with this chapter is required in all state contracts to which it applies. Upon award of a contract covered by this chapter, the contractor must certify that he or she will comply, and will require all subcontractors to comply, with the requirements of this chapter.
     (2) Such contracts shall provide that upon a violation of this chapter, a contractor or subcontractor who is out of compliance for the first time has thirty days to come into compliance including the payment of any back wages required. If the contractor or subcontractor remains out of compliance after thirty days, the state may terminate the contract and otherwise pursue contractual remedies for breach of contract. The contractor or subcontractor may appeal the finding of the department made under this section in accordance with the administrative procedure act, chapter 34.05 RCW.
     (3) Within ten days of a request by the state, the contractor or subcontractor shall provide satisfactory proof of compliance with the living wage provisions of this chapter in the form of payroll records, benefit records, or other appropriate evidence.
     (4) If the state finds that a contractor or subcontractor has violated this chapter a second time, the state may terminate all contracts with the contractor or subcontractor, and the contractor or subcontractor shall be prohibited from contracting with the state for a period of two years.

NEW SECTION.  Sec. 9   Nothing contained in this chapter may be construed to limit in any way the remedies, legal or equitable, that are available for violations of this chapter.

NEW SECTION.  Sec. 10   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 11   (1) The living wage requirement imposed by this chapter applies to all contracts and related subcontracts entered into, renewed, or extended on or after July 1, 2003.
     (2) This act does not apply to contracts entered into before July 1, 2003.

NEW SECTION.  Sec. 12   A new section is added to chapter 28B.10 RCW to read as follows:
     All contracts entered into under this chapter on or after July 1, 2003, are subject to the requirements established under chapter 39.--RCW (sections 1 through 11 of this act).

NEW SECTION.  Sec. 13   A new section is added to chapter 43.19 RCW to read as follows:
     All contracts entered into under this chapter on or after July 1, 2003, are subject to the requirements established under chapter 39.--RCW (sections 1 through 11 of this act).

NEW SECTION.  Sec. 14   A new section is added to chapter 47.28 RCW to read as follows:
     All contracts entered into under this chapter on or after July 1, 2003, are subject to the requirements established under chapter 39.--RCW (sections 1 through 11 of this act).

NEW SECTION.  Sec. 15   Sections 1 through 11 of this act constitute a new chapter in Title 39 RCW.

NEW SECTION.  Sec. 16   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2003.