BILL REQ. #:  Z-0031.3 

Read first time 01/28/13.   Referred to Committee on Labor & Workforce Development.

     AN ACT Relating to the collection of unpaid wages; amending RCW 49.48.086; and adding a new section to chapter 49.48 RCW.

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

Sec. 1   RCW 49.48.086 and 2010 c 42 s 4 are each amended to read as follows:
     (1) After a final order is issued under RCW 49.48.084, if an employer defaults in the payment of: (a) Any wages determined by the department to be owed to an employee, including interest; or (b) any civil penalty ordered by the department under RCW 49.48.083, 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.
     (c) When there is probable cause to believe that there is property within this state not otherwise exempt from process or execution in the possession or control of any employer against whom a warrant issued under subsection (1) of this section has been filed which remains unsatisfied, or a final assessment issued pursuant to RCW 49.48.083, any judge of the superior court or district court in the county in which that property is located may, upon the request of the sheriff or agent of the department authorized to collect wages owed, issue a warrant directed to the officers commanding the search for and seizure of the property described in the request for warrant. The procedure for the issuance, execution, and return of the warrant authorized by this section and for return of any property seized is set forth in the criminal rules of the superior court and the district court. This section does not require the application for or issuance of any warrant not otherwise required by law.
     (d) The department may issue an order of execution, pursuant to a filed warrant, under its official seal directed to the sheriff of the county in which the warrant has been filed, commanding the sheriff to levy upon and sell the real and/or personal property of the debtor found within the county, or so much thereof as may be necessary, for the payment of the amount of the warrant, plus the cost of executing the warrant, and return the warrant to the department and pay to it the money collected by virtue thereof within sixty days after the receipt of the warrant. The sheriff shall immediately proceed upon the same in all respects and with like effect as prescribed by law with respect to execution or other process issued against rights or property upon judgments of the superior court.
     (e) The sheriff is entitled to fees as provided by law for services in levying execution on a superior court judgment and the clerk is entitled to a filing fee as provided by law, which are added to the amount of the warrant.
     (f) At the discretion of the department, an order of execution of like terms, force, and effect may be issued and directed to any agent of the department authorized to collect wages owed per this section, and in the execution thereof the agent has all the powers conferred by law upon sheriffs, but is not entitled to any fee or compensation in excess of the actual expenses paid in the performance of such a duty, which must be added to the amount of the warrant.
     (g) The proceeds received from any sale must be credited upon the amount due under the warrant and when the final amount due is received, together with interest, penalties, fees, and costs, the judgment docket must show the claim for unpaid wages to be satisfied and the clerk of the court shall so note upon the docket. Any surplus received from any sale of property must be paid to the debtor or to any lien holder entitled thereto. If the return on the warrant shows that the same has not been satisfied in full, the amount of the deficiency remains the same as a judgment against the debtor which may be collected in the same manner as the original amount of the warrant.
     (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 RCW 49.48.083 in a civil action brought in a court of competent jurisdiction of the county where the violation is alleged to have occurred.
     (4) Whenever any employer quits business, sells out, exchanges, or otherwise disposes of the employer's business or stock of goods, any person who becomes a successor to the business becomes liable for the full amount of any outstanding citation and notice of assessment or penalty against the employer's business under this chapter if, at the time of the conveyance of the business, the successor has: (a) Actual knowledge of the fact and amount of the outstanding citation and notice of assessment or (b) a prompt, reasonable, and effective means of accessing and verifying the fact and amount of the outstanding citation and notice of assessment from the department. If the citation and notice of assessment or penalty is not paid in full by the employer within ten days of the date of the sale, exchange, or disposal, the successor is liable for the payment of the full amount of the citation and notice of assessment or penalty, and payment thereof by the successor must, to the extent thereof, be deemed a payment upon the purchase price. If the payment is greater in amount than the purchase price, the amount of the difference becomes a debt due the successor from the employer.
     (5) The department is authorized to match its outstanding warrants, except those where a payment agreement is in good standing, against deposit accounts held by financial institutions registered in Washington. The department is further authorized to serve notice of withhold and deliver to the institutions by electronic file transfer and the institutions are authorized to respond, in aggregate, using the same electronic file process. The institutions have thirty days to respond to the electronic service. The department may not serve the same institution more than once a month and the department must develop a process to relieve specific institutions from this method of service when it is burdensome. The department may adopt rules necessary to implement this subsection.
     (6) This section does not affect other collection remedies that are otherwise provided by law.

NEW SECTION.  Sec. 2   A new section is added to chapter 49.48 RCW to read as follows:
     If the director of labor and industries or the director's designee has reason to believe that an employer is insolvent or about to cease business, leave the state, or remove or dissipate assets out of which wages, penalties, fees, or interest might be satisfied, and the collection of any wages accrued will be jeopardized by delaying collection, the director or the director's designee may make an immediate assessment thereof and may proceed to enforce collection immediately under the terms of RCW 49.48.086.