BILL REQ. #:  S-1250.3 

Read first time 02/07/2005.   Referred to Committee on Labor, Commerce, Research & Development.

     AN ACT Relating to employee wages and benefits; amending RCW 49.46.010 and 49.46.020; adding a new section to chapter 49.46 RCW; providing an expiration date; and declaring an emergency.

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

Sec. 1   RCW 49.46.010 and 2002 c 354 s 231 are each amended to read as follows:
     As used in this chapter:
     (1) "Average tipped wage rate" means the total amount received by a tipped employee in tips for a calendar month divided by the total number of hours worked in that month by the tipped employee.
     (2) "Director" means the director of labor and industries;
     (((2))) (3) "Wage" means compensation due to an employee by reason of employment, payable in legal tender of the United States or checks on banks convertible into cash on demand at full face value, subject to such deductions, charges, or allowances as may be permitted by rules of the director;
     (((3))) (4) "Employ" includes to permit to work;
     (((4))) (5) "Employer" includes any individual, partnership, association, corporation, business trust, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee;
     (((5))) (6) "Employee" includes any individual employed by an employer but shall not include:
     (a) Any individual (i) employed as a hand harvest laborer and paid on a piece rate basis in an operation which 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;
     (b) Any individual employed in casual labor in or about a private home, unless performed in the course of the employer's trade, business, or profession;
     (c) Any individual employed in a bona fide executive, administrative, or professional capacity or in the capacity of outside salesman as those terms are defined and delimited by rules of the director. However, those terms shall be defined and delimited by the director of personnel pursuant to chapter 41.06 RCW for employees employed under the director of personnel's jurisdiction;
     (d) Any 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 purpose of this section 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;
     (e) Any 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 shall not affect or add to qualification, entitlement or benefit rights under any state, local government, or publicly supported retirement system other than that provided under chapter 41.24 RCW;
     (f) Any newspaper vendor or carrier;
     (g) Any carrier subject to regulation by Part 1 of the Interstate Commerce Act;
     (h) Any individual engaged in forest protection and fire prevention activities;
     (i) Any 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;
     (j) Any individual whose duties require that he or she reside or sleep 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;
     (k) Any resident, inmate, or patient of a state, county, or municipal correctional, detention, treatment or rehabilitative institution;
     (l) Any individual who holds a public elective or appointive office of the state, any county, city, town, municipal corporation or quasi municipal corporation, political subdivision, or any instrumentality thereof, or any employee of the state legislature;
     (m) All vessel operating crews of the Washington state ferries operated by the department of transportation;
     (n) Any individual employed as a seaman on a vessel other than an American vessel;
     (((6))) (7) "Occupation" means any occupation, service, trade, business, industry, or branch or group of industries or employment or class of employment in which employees are gainfully employed;
     (((7))) (8) "Retail or service establishment" means an establishment seventy-five percent of whose annual dollar volume of sales of goods or services, or both, is not for resale and is recognized as retail sales or services in the particular industry;
     (9) "Tipped employee" means an employee who regularly and customarily receives gratuities directly from the customer in recognition of the service performed and who is employed by an employer with a standard industry code of 58, 70, or 79, or a North American industry code of 713, 721, or 722.

Sec. 2   RCW 49.46.020 and 1999 c 1 s 1 are each amended to read as follows:
     (1) Until January 1, 1999, every employer shall pay to each of his or her employees who has reached the age of eighteen years wages at a rate of not less than four dollars and ninety cents per hour.
     (2) Beginning January 1, 1999, and until January 1, 2000, every employer shall pay to each of his or her employees who has reached the age of eighteen years wages at a rate of not less than five dollars and seventy cents per hour.
     (3) Beginning January 1, 2000, and until January 1, 2001, every employer shall pay to each of his or her employees who has reached the age of eighteen years wages at a rate of not less than six dollars and fifty cents per hour.
     (4)(a) Except as provided under (c) of this subsection, beginning on January 1, 2001, and each following January 1st as set forth under (b) of this subsection, every employer shall pay to each of his or her employees who has reached the age of eighteen years wages at a rate of not less than the amount established under (b) of this subsection.
     (b) On September 30, 2000, and on each following September 30th, the department of labor and industries shall calculate an adjusted minimum wage rate to maintain employee purchasing power by increasing the current year's minimum wage rate by the rate of inflation. The adjusted minimum 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 prior to each September 1st as calculated by the United States department of labor. Each adjusted minimum wage rate calculated under this subsection (4)(b) takes effect on the following January 1st.
     (c)(i) On September 30, 2005, and on each following September 30th, the department of labor and industries shall establish an adjusted minimum tipped wage rate for tipped employees that is equal to fifty percent of the adjusted minimum wage rate calculated under (b) of this subsection. Each adjusted minimum tipped wage rate established under this subsection (4)(c)(i) takes effect on the following January 1st.
     (ii) On June 1, 2005, the department of labor and industries shall establish an adjusted minimum tipped wage rate for tipped employees that is equal to fifty percent of the adjusted minimum wage rate calculated under (b) of this subsection. The adjusted minimum tipped wage rate calculated under this subsection (4)(c)(ii) takes effect July 1, 2005. This subsection (4)(c)(ii) expires January 1, 2006.
     (iii) Employers that employ tipped employees may elect to pay the adjusted minimum tipped wage rate for tipped employees under this subsection (4)(c) instead of the adjusted minimum wage rate under (b) of this subsection. If an employer elects to use the adjusted minimum tipped wage rate under this subsection (4)(c), the provisions of section 3 of this act apply.
     (5) The director shall by ((regulation)) rule establish the minimum wage for employees under the age of eighteen years.

NEW SECTION.  Sec. 3   A new section is added to chapter 49.46 RCW to read as follows:
     (1) Employers shall determine the average tipped wage rate for each tipped employee for the previous calendar month. If the average tipped wage rate does not equal or exceed the adjusted minimum wage rate under RCW 49.46.020(4)(b) for any tipped employee, the employer shall pay the tipped employee an amount equal to the number of hours worked for the previous calendar month multiplied by the adjusted minimum wage rate under RCW 49.46.020(4)(b) less the average tipped wage rate for the tipped employee for the previous calendar month. Employers shall pay the tipped employee this amount at any time during the month subsequent to the month used for the calculation under this subsection.
     (2) Employers shall contribute monthly, an amount equal to fifty percent of the adjusted minimum tipped wage rate under RCW 49.46.020(4)(c) multiplied by the total number of hours worked during the previous calendar month by all tipped employees, for the provision of one or more of the following employee benefits:
     (a) Health care benefits for all employees;
     (b) Wages in excess of the adjusted minimum wage rate for nontipped employees; or
     (c) Employee meals, paid vacation leave, paid sick leave, and any other nonwage benefits deemed appropriate as provided in rule by the director.
     (3) Annually, any employer subject to this section shall submit with the department of labor and industries: (a) A report certifying that the employer has complied with the requirements of this section; and (b) a twenty-five dollar fee. The report shall include information that allows the department to verify compliance with this section. The report shall be developed by the department in conjunction with employers subject to this section. The director shall establish by rule any other requirements necessary for the proper administration of this section.
     (4) This section only applies to employers paying tipped employees the wage rate established in RCW 49.46.020(4)(c).

NEW SECTION.  Sec. 4   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 immediately.