BILL REQ. #:  H-4480.1 

Read first time 01/24/2006.   Referred to Committee on Commerce & Labor.

     AN ACT Relating to violations of wage payment requirements; adding new sections to chapter 49.48 RCW; creating a new section; and prescribing penalties.

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

NEW SECTION.  Sec. 1   DEFINITIONS. The definitions in this section apply throughout this section and sections 2 through 6 of this act:
     (1) "Citation" means a written determination from the department to an employer that 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: (a) RCW 49.46.010 for purposes of a wage payment requirement set forth in RCW 49.46.020 or 49.46.130; and (b) RCW 49.12.005 for purposes of a wage payment requirement set forth in RCW 49.48.010, 49.52.050, or 49.52.060.
     (5) "Employer" has the meaning provided in RCW 49.46.010 for purposes of a wage payment requirement set forth in RCW 49.46.020, 49.46.130, 49.48.010, 49.52.050, or 49.52.060.
     (6) "Notice of assessment" means a written notice from the department to an employer that, based on a citation, the employer shall pay the amounts assessed under section 2 of this act.
     (7) "Wage" has the meaning provided in RCW 49.46.010.
     (8) "Wage payment requirement" means a wage payment requirement set forth in RCW 49.46.020, 49.46.130, 49.48.010, 49.52.050, or 49.52.060, and any related rules adopted by the department.
     (9) "Willful" means a knowing and intentional action that is neither accidental nor the result of a bona fide dispute, as evaluated under the standards applicable to wage payment violations under RCW 49.52.050(2).

NEW SECTION.  Sec. 2   CITATIONS AND NOTICES OF ASSESSMENT--CIVIL PENALTIES. (1) The department may issue to an employer a citation and notice of assessment for a violation of a wage payment requirement. The department may order the employer to pay employees all wages owed, including interest of one percent per month on all wages owed, to the employee. If the department determines that the violation of the wage payment requirement was a willful violation, the department also may order the employer to pay the department a civil penalty as specified in subsection (2) of this section.
     (2) A civil penalty for a willful violation of a wage payment requirement shall be not less than five hundred dollars or an amount equal to ten percent of the total amount of unpaid wages, whichever is greater. The maximum civil penalty for a willful violation of a wage payment requirement shall be twenty thousand dollars.
     (3) The department may not assess a civil penalty if the employer reasonably relied on: (a) A rule related to any wage payment requirement; (b) a written order, ruling, approval, opinion, advice, 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. The department shall maintain a complete and accurate record of all written orders, rulings, approvals, opinions, advice, determinations, and interpretations to determine whether an employer is immune from civil penalties under (b) of this subsection.
     (4) The department shall waive any civil penalty assessed under this section if the director determines that the employer paid all wages owed to an employee, including interest, within five business days of receiving the citation and notice of assessment from the department. The department shall send the citation and notice of assessment to the employer by certified mail to the employer's last known address.
     (5) The department may waive at any time a civil penalty assessed under this section, in whole or in part, if the director determines that the employer paid all wages owed to an employee.
     (6) The department shall issue a citation and notice of assessment under this section within three years after the cause of action accrues, unless a longer period of time applies under law. Such cause of action for wage claims shall accrue from the date when the wages are due.
     (7) The department shall deposit civil penalties paid under this section in the supplemental pension fund established under RCW 51.44.033.

NEW SECTION.  Sec. 3   ADMINISTRATIVE APPEALS. (1) A person, firm, or corporation aggrieved by a citation and notice of assessment issued by the department under section 2 of this act may appeal the determination or the assessment to the director by filing a notice of appeal with the director within thirty days of the department's issuance of the citation and notice of assessment. A citation and notice of assessment not appealed within thirty days is final and binding, and not subject to further appeal.
     (2) A notice of appeal filed with the director under this section shall stay the effectiveness of the citation and notice of assessment pending final review of the appeal by the director as provided for in chapter 34.05 RCW.
     (3) Upon receipt of a notice of 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 and notice of assessment shall be de novo. Any party who seeks to challenge an initial order shall file a petition for administrative review with the director within thirty days after service of the initial order. The director shall conduct administrative review in accordance with chapter 34.05 RCW.
     (4) The director shall issue all final orders after appeal of the initial order. The final order of the director is subject to judicial review in accordance with 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 fails to allow adequate inspection of records in an investigation by the department under this chapter within a reasonable time period may not use such records in any appeal under this section to challenge the correctness of any determination by the department of wages owed.

NEW SECTION.  Sec. 4   ELECTION OF REMEDY. (1) An employee who has filed a written wage complaint may elect to terminate the department's administrative action, thereby preserving any private right of action, by providing written notice to the department within five business days of the department's issuance of a citation and notice of assessment.
     (2) If the employee elects to terminate the department's administrative action, the department shall immediately discontinue its action against the employer. If the department has already issued a citation and notice of assessment against the employer, the department shall vacate the citation and notice of assessment. The citation and notice of assessment, and any related findings of fact or conclusions of law by the department, are not admissible in a private right of action.
     (3) Nothing in this section affects the following: Actions where additional workers were identified as a result of a wage complaint; and actions conducted absent a wage complaint.

NEW SECTION.  Sec. 5   COLLECTION PROCEDURES. (1) If an employer defaults in a payment of wages owed, including interest, or of a civil penalty after a final order is issued under section 3 of this act, the director may file with the clerk of any county within the state a warrant in the amount of the payment plus 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 due on it plus any filing fees, 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 wages owed, including interest, and civil penalties as set forth in this section, the department may recover wages owed, including interest, and civil penalties assessed under section 2 of this act 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. 6   RULE-MAKING AUTHORITY. The director may adopt rules to carry out the purposes of sections 1 through 5 of this act.

NEW SECTION.  Sec. 7   CODIFICATION. Sections 1 through 6 of this act are each added to chapter 49.48 RCW.

NEW SECTION.  Sec. 8   CAPTIONS. Captions used in this act are not any part of the law.