BILL REQ. #:  H-4859.1 

READ FIRST TIME 02/06/04.   

     AN ACT Relating to authorizing the director of labor and industries to issue and enforce civil penalties for violations of the minimum wage act and chapter 49.48 RCW; amending RCW 49.46.100, 49.48.020, 49.48.040, 49.48.060, and 49.48.070; adding new sections to chapter 49.48 RCW; adding new sections to chapter 49.46 RCW; creating a new section; and prescribing penalties.

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

NEW SECTION.  Sec. 1   The legislature finds that over 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. The department of labor and industries currently does not have an effective means of addressing these complaints in order to ensure workers are paid the wages they are owed.
     The legislature further finds that the Washington state minimum wage law and wage claim laws do not authorize adequate penalties against violators. To improve compliance, the department of labor and industries should be allowed to assess interest on back wages and impose civil penalties against employers who are found to be not in compliance with chapters 49.46 and 49.48 RCW.

NEW SECTION.  Sec. 2   A new section is added to chapter 49.48 RCW to read as follows:
     (1) An employer shall pay each worker all wages due on an established payday for each pay period.
     (2) An employer found to have violated a provision requiring payment of wages under chapter 49.12, 49.28, 49.30, 49.46, or 49.52 RCW or this chapter in a citation or notice of assessment issued by the director of labor and industries or the director's authorized representative: Must pay the wages to the employee, including interest of up to one percent per month on the unpaid wages, also to be paid to the worker; shall be assessed a civil penalty of not less than one hundred dollars and not more than one thousand dollars for each violation per employee; and may be assessed a civil penalty of not more than one thousand dollars for each subsequent violation found in the citation or notice of assessment. Each day a violation occurs may constitute a separate violation. The director or director's authorized representative may also claim the remedies in RCW 49.52.070.
     (3) The director of labor and industries may waive collection of a portion or all of the penalties assessed under this chapter in favor of the full payment of wages owed to the employee.
     (4) The director of labor and industries, or the director's authorized representative, may require payment of unpaid wages and may assess all civil penalties authorized by this section. When considering the amount of penalties for multiple violations found in a citation and notice of assessment, the director, or the director's authorized representative, may consider the appropriateness of the penalty with respect to the number of affected employees of the employer being charged for each violation, the gravity of the violations, the duration of the violations, the size of the employer's business, the good faith of the employer, the history of previous violations, and other relevant factors.
     (5) Civil penalties imposed under this chapter shall be paid to the director of labor and industries for deposit in the employment standards enforcement account established under section 17 of this act.
     (6) The employer shall pay wages and the civil penalty amount assessed under this section within thirty days of receipt of the assessment or notify the director of his or her intent to appeal the citation or the assessment penalty as provided in section 9 of this act.

NEW SECTION.  Sec. 3   A new section is added to chapter 49.46 RCW to read as follows:
     (1) An employer found to have violated any of the provisions of this chapter may be assessed a civil penalty of not less than one hundred dollars and not more than one thousand dollars for each violation per employee, and may be assessed a civil penalty of not more than one thousand dollars for each subsequent violation found in the citation or notice of assessment. Each day a violation occurs may constitute a separate violation.
     (2) Civil penalties imposed under this chapter shall be paid to the director for deposit in the employment standards enforcement account established under section 17 of this act.
     (3) The employer shall pay the civil penalty amount assessed under this section within thirty days of receipt of the assessment or notify the director of his or her intent to appeal the citation or the assessment penalty as provided in section 10 of this act.

Sec. 4   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 employer who discharges or in any other manner discriminates against any employee because such employee has made any complaint to his or her employer, to the director, or ((his)) the director's authorized representatives that he or she has not been paid wages 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.

Sec. 5   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, and section 2 of this act shall be guilty of a misdemeanor.

Sec. 6   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:
     (a) Conduct investigations to enforce section 2 of this act and to ensure compliance with this chapter and chapters 39.12, 49.12, 49.28, 49.30, 49.46, and 49.52 RCW, upon obtaining information indicating an employer may be committing a violation under these chapters ((39.12, 49.46, and 49.48 RCW, conduct investigations to ensure compliance with chapters 39.12, 49.46, and 49.48 RCW));
     (b) Order the payment of all wages owed the workers, including interest of up to one percent per month on the unpaid wages, also to be paid to the worker, and institute actions necessary for the collection of the sums determined owed either under section 2 of this act or in a civil action in the name of the department brought in superior court or other court of competent jurisdiction of the county where the violation is alleged to have occurred, or the department may use the procedures for collection of wages in a court action set forth in this chapter and chapter 49.52 RCW; and
     (c) ((Take assignments of wage claims and)) Prosecute actions for the collection of wages ((of)), including interest of up to one percent per month on the unpaid wages, also to be paid to the worker, for persons who are financially unable to employ counsel when in the judgment of the director of the department the claims are valid and enforceable ((in the courts)).
     (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 and section 2 of this act: (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 lawful duties, which statistics or information may be in his or her 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. 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 or her employees that he or she is able to pay wages for their services and that the employees are not being paid for their services, 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 or her business and pay his or her 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 or her to furnish such bond or cease doing business until he or she 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 or her compliance with RCW 49.48.010 through 49.48.080, 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 or her failure to do so, within thirty days thereafter, the employer or former employer shall be liable to a penalty of ten 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.

Sec. 8   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 and section 2 of this act, and to institute the actions for penalties herein provided, and to enforce generally the provisions of RCW 49.48.040 through 49.48.080 and section 2 of this act.

NEW SECTION.  Sec. 9   A new section is added to chapter 49.48 RCW to read as follows:
     A person, firm, or corporation aggrieved by a citation or notice of assessment issued by the department of labor and industries under this chapter may appeal the action or decision to the director of labor and industries by filing notice of the appeal with the director within thirty days of the department's issuance of a citation or notice of assessment, otherwise the citation or notice of assessment is final and binding. A notice of appeal filed under this section shall stay the effectiveness of a citation or notice of the assessment of a penalty pending review of the appeal by the director. Upon receipt of an appeal, a hearing shall be held in accordance with chapter 34.05 RCW. The director shall issue all final orders after the hearing. The final orders are subject to appeal in accordance with chapter 34.05 RCW, with the prevailing party entitled to recover reasonable costs and attorneys' fees. Orders that are not appealed within the time period specified in chapter 34.05 RCW are final and binding.

NEW SECTION.  Sec. 10   A new section is added to chapter 49.46 RCW to read as follows:
     A person, firm, or corporation aggrieved by a citation or notice of assessment issued by the department of labor and industries under this chapter may appeal the action or decision to the director of labor and industries by filing notice of the appeal with the director within thirty days of the department's issuance of a citation or notice of assessment, otherwise the citation or notice of assessment is final and binding. A notice of appeal filed under this section shall stay the effectiveness of a citation or notice of the assessment of a penalty pending review of the appeal by the director. Upon receipt of an appeal, a hearing shall be held in accordance with chapter 34.05 RCW. The director shall issue all final orders after the hearing. The final orders are subject to appeal in accordance with chapter 34.05 RCW, with the prevailing party entitled to recover reasonable costs and attorneys' fees. Orders that are not appealed within the time period specified in chapter 34.05 RCW are final and binding.

NEW SECTION.  Sec. 11   A new section is added to chapter 49.48 RCW to read as follows:
     Nothing in this chapter prohibits an employee from pursuing a private right of action against an employer for unpaid wages. The remedies provided for in this chapter are not exclusive and are concurrent with any other remedy provided by law.

NEW SECTION.  Sec. 12   A new section is added to chapter 49.46 RCW to read as follows:
     Nothing in this chapter prohibits an employee from pursuing a private right of action against an employer for unpaid wages. The remedies provided for in this chapter are not exclusive and are concurrent with any other remedy provided by law.

NEW SECTION.  Sec. 13   A new section is added to chapter 49.48 RCW to read as follows:
     (1) If an employer defaults in a payment, penalty, or fine due to the department of labor and industries after a final order is issued under this chapter the director of labor and industries or the director's designee may file with the clerk of any county within the state, a warrant in the amount of the notice of assessment, plus interest, penalties, and a filing fee of twenty dollars. 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, penalty, fine due on it, or filing fee, 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 of labor and industries or the director's designee 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 of labor and industries for payments, penalties, or fines 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 an authorized representative of 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 or the director's authorized representative. 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 a payment, penalty, or fine due to the department of labor and industries as set forth in this section, the department may recover civil penalties imposed under this chapter in a civil action in the name of the department 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. 14   A new section is added to chapter 49.46 RCW to read as follows:
     (1) If an employer defaults in a payment, penalty, or fine due to the department of labor and industries after a final order is issued under this chapter the director of labor and industries or director's designee may file with the clerk of any county within the state, a warrant in the amount of the notice of assessment, plus interest, penalties, and a filing fee of twenty dollars. 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, penalty, fine due on it, or filing fee, 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 of labor and industries or the director's designee 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 of labor and industries for payments, penalties, or fines 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 an authorized representative of 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 or the director's authorized representative. 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 a payment, penalty, or fine due to the department of labor and industries as set forth in this section, the department may recover civil penalties imposed under this chapter in a civil action in the name of the department 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. 15   A new section is added to chapter 49.48 RCW to read as follows:
     The director of labor and industries may adopt rules to carry out the purposes of this chapter.

NEW SECTION.  Sec. 16   A new section is added to chapter 49.46 RCW to read as follows:
     The director may adopt rules to carry out the purposes of this chapter.

NEW SECTION.  Sec. 17   A new section is added to chapter 49.46 RCW to read as follows:
     The employment standards enforcement account is created in the state treasury. All receipts from civil penalties assessed under this chapter and chapter 49.48 RCW must be deposited in the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for the employment standards program administered by the department of labor and industries.