S-1317

AN ACT Relating to wage claims and collection; amending RCW 49.46.100, 49.48.020, 49.48.040, 49.48.050, 49.48.060, 49.48.070, 49.48.080, 43.84.092, and 43.84.092; adding new sections to chapter 49.48 RCW; creating a new section; prescribing penalties; providing an effective date; and providing an expiration date.

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

NEW SECTION. Sec. 1. The legislature finds that over twenty-five thousand state residents per year file cases and complaints with the department of labor and industries alleging they have been denied payment for work they performed. Each month an average of over one million dollars in back wages is sought by workers. The legislature further finds that greater enforcement of and compliance with minimum wage and wage payment laws is essential. The legislature intends that interest on back wages may be assessed and civil penalties may be imposed against employers that fail to comply with minimum wage and wage payment laws. The legislature further intends that any such penalties be deposited in a dedicated account, and be used by the department of labor and industries to administer and enforce wage payment laws.

NEW SECTION. Sec. 2. A new section is added to chapter 49.48 RCW to read as follows:

(1) Every employer shall establish and maintain a regular payday, when all employees shall be paid the wages due them.

(2) The regular payday shall be at least once per month.

(3) This section does not prevent the employer from establishing and maintaining regular paydays at more frequent intervals.

(4) This section does not prevent the employer from implementing a regular payroll system in which wages from up to seven days before the regular payday may be withheld from the covered pay period and included in the next pay period.

(5) This section does not prevent any employer from entering into a written agreement, prior to the rendering of any services, and mutually satisfactory with the employees, as to the payment of wages at a future date.

Sec. 3. RCW 49.46.100 and 1959 c 294 s 10 are each amended to read as follows:

(1) Any employer who hinders or delays the director or ((~~his~~)) the director's authorized representatives in the performance of ((~~his~~)) the director's duties in the enforcement of this chapter, or refuses to admit the director or ((~~his~~)) the director's authorized representatives to any place of employment, or fails to make, keep, and preserve any records as required under the provisions of this chapter, or falsifies any such record, or refuses to make any record accessible to the director or ((~~his~~)) the director's authorized representatives upon demand, or refuses to furnish a sworn statement of such record or any other information required for the proper enforcement of this chapter to the director or ((~~his~~)) the director's authorized representatives upon demand((~~, or pays or agrees to pay wages at a rate less than the rate applicable under this chapter, or otherwise violates any provision of this chapter or of any regulation issued under this chapter~~)) shall be deemed in violation of this chapter and shall((~~, upon conviction therefor, be guilty of a gross misdemeanor.~~

~~(2) Any~~)) be assessed a civil penalty of not more than one thousand dollars depending on the size of the business and the gravity of the violation.

(2)(a) An employer who pays or agrees to pay wages at a rate less than the rate applicable under this chapter or any rule or order adopted under this chapter may be assessed civil penalties of an amount equal to twenty percent of the wage violation.

(b) An employer who willfully or repeatedly pays or agrees to pay wages at a rate less than the rate applicable under this chapter or a rule or order adopted under this chapter is in violation of this chapter, and upon conviction, is guilty of a gross misdemeanor.

(i) Fifty dollars for each failure to pay each worker; and

(ii) For each subsequent violation, or any willful or intentional violation, one hundred dollars for each failure to pay each worker, plus twenty-five percent of the amount of wages unlawfully withheld.

(d) An employer who does not pay all wages owed within seventy-two hours of an order issued by the department under RCW 49.48.040(1)(c) shall, in addition to any other applicable penalty, be assessed a civil penalty equal to three times the amount of wages due and not paid.

(3) Upon a finding by the director that an employer who discharges or in any other manner discriminates against any employee because such employee has made any complaint to ((~~his~~)) the employer, to the director, or ((~~his~~)) the director's authorized representatives that ((~~he has not been paid~~)) wages have not been paid in accordance with the provisions of this chapter, or that the employer has violated any provision of this chapter, or because such employee has caused to be instituted or is about to cause to be instituted any proceeding under or related to this chapter, or because such employee has testified or is about to testify in any such proceeding ((~~shall be deemed in violation of this chapter and shall, upon conviction therefor, be guilty of a gross misdemeanor~~)), the director may require an employer who has discharged or discriminated against an employee in violation of this chapter to reinstate the employee to the same position with back pay and interest of up to one percent per month.

(4) Civil penalties imposed under this chapter shall be paid to the director for deposit in the wage claim collection account. Civil penalties may be recovered and other civil remedies authorized by this chapter may be enforced in a civil action in the name of the department brought in the superior court of the county where the violation is alleged to have occurred, or the department may use the procedures for collection of wages set forth in chapter 49.48 RCW.

Sec. 4. RCW 49.48.020 and 1971 ex.s. c 55 s 2 are each amended to read as follows:

Any person, firm, or corporation which violates any of the provisions of ((~~RCW 49.48.010 through 49.48.030 and 49.48.060 shall be~~)) this chapter is guilty of a misdemeanor.

Sec. 5. RCW 49.48.040 and 1987 c 172 s 1 are each amended to read as follows:

(1) The department of labor and industries ((~~may~~)) shall:

(a) Upon obtaining information indicating an employer may be committing a violation under chapter((s)) 39.12, 49.46, ((~~and~~)) or 49.48 RCW, conduct investigations to ensure compliance with chapters 39.12, 49.46, and 49.48 RCW;

(b) Upon completing an investigation, issue a written determination, including findings of fact, as to the alleged violation of this chapter or chapter 39.12 or 49.46 RCW:

(c) Upon determining that a violation of this chapter or chapter 39.12 or 49.46 RCW has occurred, order the payment of all wages owed the workers, including interest of up to one percent per month on back wages owed, and institute actions necessary for the collection of the sums determined owed; and

((~~(c)~~)) (d) Take assignments of wage claims and prosecute actions for the collection of wages ((~~of persons who are financially unable to employ counsel~~)), and interest of up to one percent per month on back wages owed when in the judgment of the director of the department the claims are valid and enforceable in the courts, unless the workers cancel such assignments or prosecute such actions with the assistance of independent legal counsel or pro se.

(2) The director of the department or any authorized representative may, for the purpose of carrying out ((~~RCW 49.48.040 through 49.48.080~~)) this chapter: (a) Issue subpoenas to compel the attendance of witnesses or parties and the production of books, papers, or records; (b) administer oaths and examine witnesses under oath; (c) take the verification of proof of instruments of writing; and (d) take depositions and affidavits. If assignments for wage claims are taken, court costs shall not be payable by the department for prosecuting such suits.

(3) The director shall have a seal inscribed "Department of Labor and Industries--State of Washington" and all courts shall take judicial notice of such seal. Obedience to subpoenas issued by the director or authorized representative shall be enforced by the courts in any county.

(4) The director or authorized representative shall have free access to all places and works of labor. Any employer or any agent or employee of such employer who refuses the director or authorized representative admission therein, or who, when requested by the director or authorized representative, willfully neglects or refuses to furnish the director or authorized representative any statistics or information pertaining to ((~~his or her~~)) the lawful duties of the employee or agent, which statistics or information may be in ((~~his or her~~)) the possession or under the control of the employer or agent, shall be guilty of a misdemeanor.

(5) An action for relief under this section shall be commenced within three years after the cause of action accrues, unless a longer period of time applies under law.

Sec. 6. RCW 49.48.050 and 1935 c 96 s 2 are each amended to read as follows:

Nothing herein contained shall be construed to limit the authority of the prosecuting attorney of any county to prosecute actions, both civil and criminal, for ((~~such~~)) violations of ((~~RCW 49.48.040 through 49.48.080 as may come to his knowledge~~)) this chapter, or to enforce the provisions ((~~hereof~~)) of this chapter independently and without specific direction of the director of labor and industries.

Sec. 7. RCW 49.48.060 and 1971 ex.s. c 55 s 4 are each amended to read as follows:

(1) If upon investigation by the director, after taking assignments of any wage claim under RCW 49.48.040, it appears to the director that the employer is representing to ((~~his~~)) employees that ((he)) the employer is able to pay wages for their services and that the employees are not being paid for their services or if the director determines an employer has repeatedly violated the provisions of this chapter or chapter 39.12 or 49.46 RCW, requiring payment of wages, the director may require the employer to give a bond in such sum as the director deems reasonable and adequate in the circumstances, with sufficient surety, conditioned that the employer will for a definite future period not exceeding six months conduct ((~~his~~)) business and pay ((~~his~~)) employees in accordance with the laws of the state of Washington.

(2) If within ten days after demand for such bond the employer fails to provide the same, the director may commence a suit against the employer in the superior court of appropriate jurisdiction to compel ((~~him~~)) the employer to furnish such bond or cease doing business until ((he)) the employer has done so. The employer shall have the burden of proving the amount thereof to be excessive.

(3) If the court finds that there is just cause for requiring such bond and that the same is reasonable, necessary or appropriate to secure ((~~the~~)) prompt payment of the wages of the employees of such employer and ((~~his~~)) compliance with ((~~RCW 49.48.010 through 49.48.080~~)) this chapter, the court shall enjoin such employer from doing business in this state until the requirement is met, or shall make other, and may make further, orders appropriate to compel compliance with the requirement.

Upon being informed of a wage claim against an employer or former employer, the director shall, if such claim appears to be just, immediately notify the employer or former employer, of such claim by mail. If the employer or former employer fails to pay the claim or make satisfactory explanation to the director of ((~~his~~)) the failure to do so, within thirty days thereafter, the employer or former employer shall be liable to a penalty of ((~~ten~~)) twenty percent of that portion of the claim found to be justly due. The director shall have a cause of action against the employer or former employer for the recovery of such penalty, and the same may be included in any subsequent action by the director on said wage claim, or may be exercised separately after adjustment of such wage claim without court action.

NEW SECTION. Sec. 8. A new section is added to chapter 49.48 RCW to read as follows:

The wage claim collection account is created in the custody of the state treasurer. All monetary penalties collected under this chapter shall be deposited into the account. Expenditures from the account may be used only for the purposes of administering and enforcing this chapter. Only the director or the director's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

Sec. 9. RCW 49.48.070 and 1935 c 96 s 4 are each amended to read as follows:

It shall be the duty of the director of labor and industries to inquire diligently for any violations of ((~~RCW 49.48.040 through 49.48.080~~)) this chapter, and to institute the actions for penalties herein provided, and to enforce generally the provisions of ((~~RCW 49.48.040 through 49.48.080~~)) this chapter.

Sec. 10. RCW 49.48.080 and 1935 c 96 s 5 are each amended to read as follows:

Nothing in ((~~RCW 49.48.040 through 49.48.080~~)) this chapter except RCW 49.48.115 and 49.48.120 shall apply to the payment of wages or compensation of employees directly employed by any county, incorporated city or town, or other municipal corporation. Nor shall anything ((~~herein~~)) in this chapter except RCW 49.48.115 and 49.48.120 apply to employees, directly employed by the state, any department, bureau, office, board, commission or institution hereof.

Sec. 11. RCW 43.84.092 and 1997 c 218 s 5 are each amended to read as follows:

(1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.

(2) The treasury income account shall be utilized to pay or receive funds associated with federal programs as required by the federal cash management improvement act of 1990. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for refunds or allocations of interest earnings required by the cash management improvement act. Refunds of interest to the federal treasury required under the cash management improvement act fall under RCW 43.88.180 and shall not require appropriation. The office of financial management shall determine the amounts due to or from the federal government pursuant to the cash management improvement act. The office of financial management may direct transfers of funds between accounts as deemed necessary to implement the provisions of the cash management improvement act, and this subsection. Refunds or allocations shall occur prior to the distributions of earnings set forth in subsection (4) of this section.

(3) Except for the provisions of RCW 43.84.160, the treasury income account may be utilized for the payment of purchased banking services on behalf of treasury funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasury and affected state agencies. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.

(4) Monthly, the state treasurer shall distribute the earnings credited to the treasury income account. The state treasurer shall credit the general fund with all the earnings credited to the treasury income account except:

(a) The following accounts and funds shall receive their proportionate share of earnings based upon each account's and fund's average daily balance for the period: The capitol building construction account, the Cedar River channel construction and operation account, the Central Washington University capital projects account, the charitable, educational, penal and reformatory institutions account, the common school construction fund, the county criminal justice assistance account, the county sales and use tax equalization account, the data processing building construction account, the deferred compensation administrative account, the deferred compensation principal account, the department of retirement systems expense account, the drinking water assistance account, the Eastern Washington University capital projects account, the education construction fund, the emergency reserve fund, the federal forest revolving account, the health services account, the public health services account, the health system capacity account, the personal health services account, the highway infrastructure account, the industrial insurance premium refund account, the judges' retirement account, the judicial retirement administrative account, the judicial retirement principal account, the local leasehold excise tax account, the local real estate excise tax account, the local sales and use tax account, the medical aid account, the mobile home park relocation fund, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the perpetual surveillance and maintenance account, the public employees' retirement system plan I account, the public employees' retirement system plan II account, the Puyallup tribal settlement account, the resource management cost account, the site closure account, the special wildlife account, the state employees' insurance account, the state employees' insurance reserve account, the state investment board expense account, the state investment board commingled trust fund accounts, the supplemental pension account, the teachers' retirement system plan I account, the teachers' retirement system plan II account, the transportation infrastructure account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer fire fighters' relief and pension principal account, the volunteer fire fighters' relief and pension administrative account, the wage claim collection account, the Washington judicial retirement system account, the Washington law enforcement officers' and fire fighters' system plan I retirement account, the Washington law enforcement officers' and fire fighters' system plan II retirement account, the Washington state patrol retirement account, the Washington State University building account, the Washington State University bond retirement fund, the water pollution control revolving fund, and the Western Washington University capital projects account. Earnings derived from investing balances of the agricultural permanent fund, the normal school permanent fund, the permanent common school fund, the scientific permanent fund, and the state university permanent fund shall be allocated to their respective beneficiary accounts. All earnings to be distributed under this subsection (4)(a) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.

(b) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The aeronautics account, the aircraft search and rescue account, the central Puget Sound public transportation account, the city hardship assistance account, the county arterial preservation account, the department of licensing services account, the economic development account, the essential rail assistance account, the essential rail banking account, the ferry bond retirement fund, the gasohol exemption holding account, the grade crossing protective fund, the high capacity transportation account, the highway bond retirement fund, the highway construction stabilization account, the highway safety account, the marine operating fund, the motor vehicle fund, the motorcycle safety education account, the pilotage account, the public transportation systems account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the recreational vehicle account, the rural arterial trust account, the safety and education account, the small city account, the special category C account, the state patrol highway account, the transfer relief account, the transportation capital facilities account, the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation revolving loan account, and the urban arterial trust account.

(5) In conformance with Article II, section 37 of the state Constitution, no treasury accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

Sec. 12. RCW 43.84.092 and 1998 c 341 s 708 are each amended to read as follows:

(1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.

(a) The following accounts and funds shall receive their proportionate share of earnings based upon each account's and fund's average daily balance for the period: The capitol building construction account, the Cedar River channel construction and operation account, the Central Washington University capital projects account, the charitable, educational, penal and reformatory institutions account, the common school construction fund, the county criminal justice assistance account, the county sales and use tax equalization account, the data processing building construction account, the deferred compensation administrative account, the deferred compensation principal account, the department of retirement systems expense account, the drinking water assistance account, the Eastern Washington University capital projects account, the education construction fund, the emergency reserve fund, the federal forest revolving account, the health services account, the public health services account, the health system capacity account, the personal health services account, the highway infrastructure account, the industrial insurance premium refund account, the judges' retirement account, the judicial retirement administrative account, the judicial retirement principal account, the local leasehold excise tax account, the local real estate excise tax account, the local sales and use tax account, the medical aid account, the mobile home park relocation fund, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the perpetual surveillance and maintenance account, the public employees' retirement system plan I account, the public employees' retirement system plan II account, the Puyallup tribal settlement account, the resource management cost account, the site closure account, the special wildlife account, the state employees' insurance account, the state employees' insurance reserve account, the state investment board expense account, the state investment board commingled trust fund accounts, the supplemental pension account, the teachers' retirement system plan I account, the teachers' retirement system combined plan II and plan III account, the transportation infrastructure account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer fire fighters' relief and pension principal account, the volunteer fire fighters' relief and pension administrative account, the wage claim collection account, the Washington judicial retirement system account, the Washington law enforcement officers' and fire fighters' system plan I retirement account, the Washington law enforcement officers' and fire fighters' system plan II retirement account, the Washington school employees' retirement system combined plan II and III account, the Washington state patrol retirement account, the Washington State University building account, the Washington State University bond retirement fund, the water pollution control revolving fund, and the Western Washington University capital projects account. Earnings derived from investing balances of the agricultural permanent fund, the normal school permanent fund, the permanent common school fund, the scientific permanent fund, and the state university permanent fund shall be allocated to their respective beneficiary accounts. All earnings to be distributed under this subsection (4)(a) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.

(5) In conformance with Article II, section 37 of the state Constitution, no treasury accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION. Sec. 13. Section 11 of this act expires September 1, 2000.

NEW SECTION. Sec. 14. Section 12 of this act takes effect September 1, 2000.