BILL REQ. #: H-1845.1
| State of Washington | 63rd Legislature | 2013 Regular Session |
READ FIRST TIME 03/01/13.
AN ACT Relating to ensuring fairness to employers by protecting employees; amending RCW 39.12.010, 39.12.050, 49.52.070, 49.48.084, 50.12.070, 50.12.072, 50.24.070, 50.04.100, 50.04.298, 51.08.070, and 51.08.180; reenacting and amending RCW 49.48.082, 49.48.060, and 49.46.010; adding new sections to chapter 39.12 RCW; adding new sections to chapter 49.52 RCW; adding new sections to chapter 49.48 RCW; adding new sections to chapter 49.46 RCW; adding a new section to chapter 50.04 RCW; adding a new chapter to Title 49 RCW; adding a new chapter to Title 60 RCW; creating new sections; repealing RCW 39.12.100, 49.46.100, 50.04.140, 50.04.145, 51.08.181, and 51.08.195; and prescribing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 The legislature finds that underground
economy activity in this state results in millions of dollars of lost
revenue to the state and is unfair to workers and law abiding
businesses. Theft of wages by employers, whether through
misclassification, illegal deductions, or failure to pay wages owed, is
a significant problem, particularly in low-wage industries. The
legislature finds that improving compliance with wage-related laws will
help address the problems of the underground economy, level the playing
field for honest employers and contractors, and protect workers.
NEW SECTION. Sec. 2 This chapter may be known and cited as the
employee fair classification act.
NEW SECTION. Sec. 3 The definitions in this section apply
throughout this chapter unless the context clearly requires otherwise.
(1) "Department" means the department of labor and industries.
(2) "Director" means the director of the department of labor and
industries.
(3) "Employ" means to suffer or permit to work.
(4)(a) "Employee" means a person who performs services for an
employer. A person or entity may be an employee of two or more
employers at the same time.
(b) "Employee" does not include: (i) A bona fide independent
contractor; (ii) an individual employed in the capacity of an outside
salesperson paid solely by way of commission, as defined and delimited
by rules of the director; or (iii) an individual employed on a casual
and sporadic basis.
(5) "Employer" means any of the following that employ a person:
(a) An individual; (b) any form of business entity, or the receiver,
trustee, or successor of a business entity; (c) an administrator or
executor of an estate; and (d) the state or any agency,
instrumentality, or political subdivision of the state. "Employer"
includes an individual or entity that acts directly or indirectly in
the interest of an employer in relation to employing a person.
"Employer" does not include agencies, authorities, or instrumentalities
of the United States, its possessions and territories, the commonwealth
of Puerto Rico, or the District of Columbia.
(6) "Front pay" means the compensation the employee would earn if
reinstated to his or her former position.
(7) "Interested party" means: A contractor or subcontractor or an
employee of a contractor or subcontractor; the director or the
director's designee; an organization whose members' wages, benefits,
and conditions of employment are affected by this chapter, including a
labor union; or any other organization of workers that exists for the
purpose, in whole or in part, of interacting with employers.
(8) "Misclassification" means willfully designating an employee as
not an employee of the employer.
(9)(a) "Pattern or practice" means that, in addition to the current
violation, within the previous ten years the employer was:
(i) Convicted of a criminal violation of a state or local law
concerning nonpayment of wages;
(ii) Subject to a court order entering final judgment for a
violation of this chapter or chapter 49.46, 49.48, 49.52, or 39.12 RCW,
and the judgment was not satisfied or current within thirty days of the
later of: (A) The expiration of the time for appealing the order; or
(B) if a timely appeal was made, the date of the final resolution of
the appeal; or
(iii) Subject to a final and binding citation and notice of
assessment from the department for a violation of this chapter or
chapter 49.46, 49.48, 49.52, or 39.12 RCW, and the citation and penalty
were not satisfied or current within thirty days of the date the
citation became final and binding.
(b) For purposes of this subsection (9), an employer includes a
successor employer, as defined in RCW 49.48.082.
(10) "Willful" means a knowing and intentional action that is
neither accidental nor the result of a bona fide dispute.
NEW SECTION. Sec. 4 (1) An employer-employee relationship is
presumed to exist when an individual performs services for an employer.
The party asserting that an individual is not an employee must
establish by a preponderance of the evidence that the individual is an
independent contractor.
(2) An individual is an independent contractor if he or she
performs services for an employer and:
(a) The individual is and will continue to be free from control or
direction over the performance of the services by the party for whom
the services are performed, both under the contract of service and in
fact. An individual is an employee if the party for whom the services
are performed exercises or has the right to exercise general control
over the individual's physical activities;
(b) The service is either outside the usual course of business for
which the service is performed, or the service is performed outside of
all the places of business of the enterprise for which the service is
performed; and
(c) The individual is customarily engaged in an independently
established trade, occupation, business, or profession of the same
nature as that involved in the contract of service.
(3) The withholding of federal income taxes with respect to the
individual may not be considered in determining whether an individual
is an independent contractor within the meaning of this section.
NEW SECTION. Sec. 5 (1) An employer shall not misclassify an
employee as an independent contractor.
(2) An employer shall not charge an employee who has been
misclassified as an independent contractor a fee, or make any
deductions from compensation for any purpose, including for goods,
materials, space rental, services, government licenses, repairs,
equipment maintenance, or fines arising from the employment where any
of the acts described in this subsection (2) would have violated the
law if the individual had not been misclassified.
(3) No person may require or request an employee to enter into an
agreement or sign a document that results in the misclassification of
the employee as an independent contractor or otherwise does not
accurately reflect the employee's relationship with the employer.
(4) No person may perform the following acts for the purpose of
facilitating or evading detection of a violation of this section:
(a) Form, assist in, or induce the formation of a corporation,
partnership, limited liability company, or other business entity; or
(b) Pay or collect a fee for use of a foreign or domestic
corporation, partnership, limited liability company, or other business
entity.
(5) A person may not conspire with, aid and abet, assist, or advise
an employer with the intent of violating this chapter.
NEW SECTION. Sec. 6 (1) An employer may not discharge, threaten,
penalize, or otherwise discriminate or retaliate against an employee
because:
(a) The employee made a complaint, or the employer believes the
employee made a complaint, to the employer, the department, the
attorney general, or any other person that the employer engaged in
conduct that the employee reasonably believes violates this chapter;
(b) The employee has caused to be instituted, or is about to cause
to be instituted, a proceeding under or related to this chapter;
(c) The employee has testified or is about to testify in a
proceeding under or related to this chapter;
(d) The employee has, or the employer believes the employee has,
otherwise exercised rights protected by this chapter; or
(e) The department has determined that the employer violated this
chapter.
(2) If an employer takes adverse action against an employee within
ninety days of the employee having engaged in an activity described in
subsection (1) of this section, the employer is presumed to have acted
in retaliation. The employer may rebut this presumption with clear and
convincing evidence that the adverse action was taken for a permissible
purpose. For purposes of this subsection, "adverse action" includes
discharging, threatening, penalizing, or otherwise discriminating
against an employee.
(3) A complaint or other communication by an employee triggers the
protections of this section regardless of whether the complaint or
communication is in writing or makes explicit reference to this
chapter.
(4) A violation of this section is a gross misdemeanor.
NEW SECTION. Sec. 7 (1) The department may conduct an
investigation if it obtains information indicating an employer may have
violated this chapter, but the department may not investigate a
violation of this chapter that occurred more than three years before
the date the department obtained the information.
(2) If the department determines that an employer violated this
chapter, it may:
(a) For a violation of section 9 of this act, order the employer to
pay a civil penalty of not less than one thousand dollars and not more
than ten thousand dollars;
(b) For a violation of section 5 or 6 of this act, order the
employer to pay a civil penalty of: (i) Not less than one thousand
dollars and not more than ten thousand dollars per employee; or (ii) if
the employer has engaged in a pattern or practice of violations, not
less than ten thousand dollars and not more than twenty-five thousand
dollars per employee;
(c) Order the employer to pay any employee aggrieved by a violation
of section 5 or 6 of this act the greater of: (i) Ten thousand
dollars; or (ii) three times the amount of any wages, salary,
employment benefits, or other compensation unlawfully denied or
withheld;
(d) Order the employer to reinstate the employee to his or her
former position at not less than the most recent rate of compensation
received by the employee, including the value of any benefits; and
(e) Determine whether to initiate collection procedures pursuant to
RCW 51.16.150 through 51.16.190, and send a copy of its determination,
including any supporting documentation, to the employment security
department.
(3) An employer may appeal the department's determination pursuant
to RCW 49.48.084.
(4) The department shall deposit civil penalties paid under this
chapter into the employee fair classification act account created in
section 10 of this act.
(5) The director shall accept referrals based on a court finding of
a violation of section 5 of this act and may initiate proceedings as
provided in this section.
NEW SECTION. Sec. 8 (1) An interested party or an individual
aggrieved by a violation of section 5 or 6 of this act may bring suit
on behalf of himself or herself or on behalf of any other individual
who is similarly situated.
(2) If a court determines that an employer violated section 5 or 6
of this act, it:
(a) Shall award the greater of:
(i) Three times the amount of any wages, salary, employment
benefits, or other compensation unlawfully denied or withheld; or
(ii) Statutory damages for each employee aggrieved by the
violation. Statutory damages may not exceed ten thousand dollars per
employee, unless the employer engaged in a pattern or practice of
violations, in which case the statutory damages must be not less than
ten thousand dollars and not more than twenty-five thousand dollars per
employee;
(b) May award injunctive or other equitable relief, including
reinstatement of the employee to his or her former position at not less
than the most recent rate of compensation received by the employee,
including the value of any benefits, or front pay in lieu of
reinstatement; and
(c) Shall award attorneys' fees and costs.
(3) A civil action under this section must be brought no later than
three years after the violation occurred. This period is tolled during
any period of time that the employer deters an individual from bringing
an action under this section.
NEW SECTION. Sec. 9 (1) If an employer engages an individual to
perform services and does not consider the individual to be an
employee, the employer shall post and keep posted the following notice:
"Every worker has the right to be properly classified as an
employee rather than an independent contractor if the individual does
not meet the requirements of an independent contractor under the law
known as the employee fair classification act.
If you believe you or someone else has been improperly classified
as an independent contractor under the employee fair classification
act, you have the right to challenge this classification by filing a
complaint with the department of labor and industries or by bringing an
action in state court."
(2) The notice required by this section must be in English and
Spanish and must be posted in a conspicuous place in each of the
employer's offices in the state and at each job site where a worker
classified as an individual contractor performs services.
NEW SECTION. Sec. 10 The employee fair classification act
account is created in the state treasury. All receipts from civil
penalties issued under section 7 of this act must be deposited in the
account. Moneys in the account may be spent only after appropriation.
Expenditures from the account may be used for enforcement of this
chapter.
NEW SECTION. Sec. 11 The department may adopt rules to implement
this chapter. In addition, the department shall develop a plan for
strategic enforcement of this chapter, prioritizing industries and
workplaces with a high concentration of violations.
Sec. 12 RCW 39.12.010 and 1989 c 12 s 6 are each amended to read
as follows:
(1) The "prevailing rate of wage", for the intents and purposes of
this chapter, shall be the rate of hourly wage, usual benefits, and
overtime paid in the locality, as hereinafter defined, to the majority
of workers, laborers, or mechanics, in the same trade or occupation.
In the event that there is not a majority in the same trade or
occupation paid at the same rate, then the average rate of hourly wage
and overtime paid to such laborers, workers, or mechanics in the same
trade or occupation shall be the prevailing rate. If the wage paid by
any contractor or subcontractor to laborers, workers, or mechanics on
any public work is based on some period of time other than an hour, the
hourly wage for the purposes of this chapter shall be mathematically
determined by the number of hours worked in such period of time.
(2) The "locality" for the purposes of this chapter shall be the
largest city in the county wherein the physical work is being
performed.
(3) The "usual benefits" for the purposes of this chapter shall
include the amount of:
(a) The rate of contribution irrevocably made by a contractor or
subcontractor to a trustee or to a third person pursuant to a fund,
plan, or program; and
(b) The rate of costs to the contractor or subcontractor which may
be reasonably anticipated in providing benefits to workers, laborers,
and mechanics pursuant to an enforceable commitment to carry out a
financially responsible plan or program which was communicated in
writing to the workers, laborers, and mechanics affected, for medical
or hospital care, pensions on retirement or death, compensation for
injuries or illness resulting from occupational activity, or insurance
to provide any of the foregoing, for unemployment benefits, life
insurance, disability and sickness insurance, or accident insurance,
for vacation and holiday pay, for defraying costs of apprenticeship or
other similar programs, or for other bona fide fringe benefits, but
only where the contractor or subcontractor is not required by other
federal, state, or local law to provide any of such benefits.
(4) ((An "interested party" for the purposes of this chapter shall
include a contractor, subcontractor, an employee of a contractor or
subcontractor, an organization whose members' wages, benefits, and
conditions of employment are affected by this chapter, and the director
of labor and industries or the director's designee.)) "Employee" means
a person who performs services for an employer, but does not include a
bona fide independent contractor. A person or entity may be an
employee of two or more employers at the same time.
(5) "Department," "employ," "employer," "front pay," "interested
party," and "pattern or practice" mean the same as defined in section
3 of this act.
NEW SECTION. Sec. 13 A new section is added to chapter 39.12 RCW
to read as follows:
Section 4 of this act governs the determination of independent
contractor status for purposes of this chapter.
Sec. 14 RCW 39.12.050 and 2009 c 219 s 3 are each amended to read
as follows:
(1) Any contractor or subcontractor who files a false statement or
fails to file any statement or record required to be filed under this
chapter and the rules adopted under this chapter, shall, after a
determination to that effect has been issued by the director after
hearing under chapter 34.05 RCW, forfeit as a civil penalty the sum of
five hundred dollars for each false filing or failure to file, and
shall not be permitted to bid, or have a bid considered, on any public
works contract until the penalty has been paid in full to the director.
The civil penalty under this subsection shall not apply to a violation
determined by the director to be an inadvertent filing or reporting
error. Civil penalties shall be deposited in the public works
administration account.
To the extent that a contractor or subcontractor has not paid wages
at the rate due pursuant to RCW 39.12.020, and a finding to that effect
has been made as provided by this subsection, such unpaid wages shall
constitute a lien against the bonds and retainage as provided in RCW
18.27.040, 19.28.041, 39.08.010, and 60.28.011.
(2) If a contractor or subcontractor is found to have violated the
provisions of subsection (1) of this section, or of chapter 49.-- RCW
(the new chapter created in section 61 of this act), or both, for a
second time within a five year period, the contractor or subcontractor
shall be subject to the sanctions prescribed in subsection (1) of this
section and shall not be allowed to bid on any public works contract
for one year. The one year period shall run from the date of notice by
the director of the determination of noncompliance. When an appeal is
taken from the director's determination, the one year period shall
commence from the date of the final determination of the appeal.
The director shall issue his or her findings that a contractor or
subcontractor has violated the provisions of this subsection after a
hearing held subject to the provisions of chapter 34.05 RCW.
NEW SECTION. Sec. 15 A new section is added to chapter 39.12 RCW
to read as follows:
(1) An employer may not discharge, threaten, penalize, or otherwise
discriminate or retaliate against an employee because:
(a) The employee made a complaint, or the employer believes the
employee made a complaint, to the employer, the department, the
attorney general, or any other person that the employer engaged in
conduct that the employee reasonably believes violates this chapter;
(b) The employee has caused to be instituted, or is about to cause
to be instituted, a proceeding under or related to this chapter;
(c) The employee has testified or is about to testify in a
proceeding under or related to this chapter;
(d) The employee has, or the employer believes the employee has,
otherwise exercised rights protected by this chapter; or
(e) The department has determined that the employer violated this
chapter.
(2) If an employer takes adverse action against an employee within
ninety days of the employee having engaged in an activity described in
subsection (1) of this section, the employer is presumed to have acted
in retaliation. The employer may rebut this presumption with clear and
convincing evidence that the adverse action was taken for a permissible
purpose. For purposes of this subsection, "adverse action" includes
discharging, threatening, penalizing, or otherwise discriminating
against an employee.
(3) A complaint or other communication by an employee triggers the
protections of this section regardless of whether the complaint or
communication is in writing or makes explicit reference to this
chapter.
(4) A violation of this section is a gross misdemeanor.
NEW SECTION. Sec. 16 A new section is added to chapter 39.12 RCW
to read as follows:
(1) If, following an investigation, the department determines that
an employer violated section 15 of this act, it may order the employer
to:
(a) Pay a civil penalty of not less than one thousand dollars and
not more than ten thousand dollars per employee;
(b) Pay any aggrieved employee the greater of: (i) Ten thousand
dollars; or (ii) three times the amount of any wages, salary,
employment benefits, or other compensation unlawfully denied or
withheld; or
(c) Reinstate the employee to his or her former position at not
less than the most recent rate of compensation received by the
employee, including the value of any benefits.
(2) A judicial appeal from the department's determination may be
taken in accordance with chapter 34.05 RCW, with the prevailing party
entitled to recover reasonable costs and attorneys' fees.
NEW SECTION. Sec. 17 A new section is added to chapter 39.12 RCW
to read as follows:
(1) An interested party or an individual aggrieved by a violation
of section 15 of this act may bring suit on behalf of himself or
herself or on behalf of any other individual who is similarly situated.
(2) If a court determines that an employer violated section 15 of
this act, it:
(a) Shall award the greater of:
(i) Three times the amount of any wages, salary, employment
benefits, or other compensation unlawfully denied or withheld; or
(ii) Statutory damages for each employee aggrieved by the
violation. Statutory damages may not exceed ten thousand dollars per
employee, unless the employer engaged in a pattern or practice of
violations, in which case the statutory damages must be not less than
ten thousand dollars and not more than twenty-five thousand dollars per
employee;
(b) May award injunctive or other equitable relief, including
reinstatement of the employee to his or her former position at not less
than the most recent rate of compensation received by the employee,
including the value of any benefits, or front pay in lieu of
reinstatement; and
(c) Shall award attorneys' fees and costs.
(3) A civil action under this section must be brought no later than
three years after the violation occurred. This period is tolled during
any period of time that the employer deters an individual from bringing
an action under this section.
NEW SECTION. Sec. 18 RCW 39.12.100 (Independent contractors--Criteria) and 2009 c 63 s 1 are each repealed.
NEW SECTION. Sec. 19 A new section is added to chapter 49.52 RCW
to read as follows:
(1) "Department," "employ," "employer," "front pay," "interested
party," and "pattern or practice" mean the same as defined in section
3 of this act.
(2) "Employee" means a person who performs services for an
employer, but does not include a bona fide independent contractor. A
person or entity may be an employee of two or more employers at the
same time.
NEW SECTION. Sec. 20 A new section is added to chapter 49.52 RCW
to read as follows:
Section 4 of this act governs the determination of independent
contractor status for purposes of this chapter.
Sec. 21 RCW 49.52.070 and 2010 c 8 s 12056 are each amended to
read as follows:
Any employer and any officer, vice principal or agent of any
employer who shall violate any of the provisions of RCW 49.52.050 (1)
and (2) shall be liable in a civil action by the aggrieved employee or
his or her assignee to judgment for ((twice)) the amount of the wages
unlawfully rebated or withheld plus twice that amount by way of
exemplary damages, together with costs of suit and a reasonable sum for
attorney's fees((: PROVIDED, HOWEVER, That the benefits of this
section shall not be available to any employee who has knowingly
submitted to such violations)).
NEW SECTION. Sec. 22 A new section is added to chapter 49.52 RCW
to read as follows:
(1) An employer may not discharge, threaten, penalize, or otherwise
discriminate or retaliate against an employee because:
(a) The employee made a complaint, or the employer believes the
employee made a complaint, to the employer, the department, the
attorney general, or any other person that the employer engaged in
conduct that the employee reasonably believes violates this chapter;
(b) The employee has caused to be instituted, or is about to cause
to be instituted, a proceeding under or related to this chapter;
(c) The employee has testified or is about to testify in a
proceeding under or related to this chapter;
(d) The employee has, or the employer believes the employee has,
otherwise exercised rights protected by this chapter; or
(e) The department has determined that the employer violated this
chapter.
(2) If an employer takes adverse action against an employee within
ninety days of the employee having engaged in an activity described in
subsection (1) of this section, the employer is presumed to have acted
in retaliation. The employer may rebut this presumption with clear and
convincing evidence that the adverse action was taken for a permissible
purpose. For purposes of this subsection, "adverse action" includes
discharging, threatening, penalizing, or otherwise discriminating
against an employee.
(3) A complaint or other communication by an employee triggers the
protections of this section regardless of whether the complaint or
communication is in writing or makes explicit reference to this
chapter.
(4) A violation of this section is a gross misdemeanor.
NEW SECTION. Sec. 23 A new section is added to chapter 49.52 RCW
to read as follows:
(1) If, following an investigation, the department determines that
an employer violated section 22 of this act, it may order the employer
to:
(a) Pay a civil penalty of not less than one thousand dollars and
not more than ten thousand dollars per employee;
(b) Pay any aggrieved employee the greater of: (i) Ten thousand
dollars; or (ii) three times the amount of any wages, salary,
employment benefits, or other compensation unlawfully denied or
withheld; or
(c) Reinstate the employee to his or her former position at not
less than the most recent rate of compensation received by the
employee, including the value of any benefits.
(2) An employer may appeal an order issued under this section
pursuant to RCW 49.48.084.
NEW SECTION. Sec. 24 A new section is added to chapter 49.52 RCW
to read as follows:
(1) An interested party or an individual aggrieved by a violation
of section 22 of this act may bring suit on behalf of himself or
herself or on behalf of any other individual who is similarly situated.
(2) If a court determines that an employer violated section 22 of
this act, it:
(a) Shall award the greater of:
(i) Three times the amount of any wages, salary, employment
benefits, or other compensation unlawfully denied or withheld; or
(ii) Statutory damages for each employee aggrieved by the
violation. Statutory damages may not exceed ten thousand dollars per
employee, unless the employer engaged in a pattern or practice of
violations, in which case the statutory damages must be not less than
ten thousand dollars and not more than twenty-five thousand dollars per
employee;
(b) May award injunctive or other equitable relief, including
reinstatement of the employee to his or her former position at not less
than the most recent rate of compensation received by the employee,
including the value of any benefits, or front pay in lieu of
reinstatement; and
(c) Shall award attorneys' fees and costs.
(3) A civil action under this section must be brought no later than
three years after the violation occurred. This period is tolled during
any period of time that the employer deters an individual from bringing
an action under this section.
Sec. 25 RCW 49.48.082 and 2010 c 42 s 1 are each reenacted and
amended to read as follows:
The definitions in this section apply throughout this section and
RCW 49.48.083 through 49.48.086:
(1) "Citation" means a written determination by the department that
a wage payment requirement has been violated.
(2) "Department" means the department of labor and industries.
(3) "Determination of compliance" means a written determination by
the department that wage payment requirements have not been violated.
(4) "Director" means the director of the department of labor and
industries, or the director's authorized representative.
(5) "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.)) means a person who
performs services for an employer, but does not include a bona fide
independent contractor. A person or entity may be an employee of two
or more employers at the same time.
(6) "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) "Employ," "employer," "front pay," "interested party," and
"pattern or practice" mean the same as defined in section 3 of this
act.
(7) "Notice of assessment" means a written notice by the department
that, based on a citation, the employer shall pay the amounts assessed
under RCW 49.48.083.
(8) "Repeat willful violator" means any employer that has been the
subject of a final and binding citation and notice of assessment for a
willful violation of a wage payment requirement within three years of
the date of issue of the most recent citation and notice of assessment
for a willful violation of a wage payment requirement.
(9) "Successor" means any person to whom an employer quitting,
selling out, exchanging, or disposing of a business sells or otherwise
conveys in bulk and not in the ordinary course of the employer's
business, more than fifty percent of the property, whether real or
personal, tangible or intangible, of the employer's business.
(10) "Wage" has the meaning provided in RCW 49.46.010.
(11) "Wage complaint" means a complaint from an employee to the
department that asserts that an employer has violated one or more wage
payment requirements and that is reduced to writing.
(12) "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.
(13) "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).
Sec. 26 RCW 49.48.084 and 2010 c 42 s 3 are each amended to read
as follows:
(1) A person, firm, or corporation aggrieved by a citation and
notice of assessment or a determination of compliance issued by the
department under RCW 49.48.083 or sections 7, 16, 23, 30, or 36 of this
act, or the assessment of civil penalty due to a determination of
status as a repeat willful violator may appeal the citation and notice
of assessment, the determination of compliance, or the assessment of
civil penalty 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, the determination of compliance, or
the assessment of civil penalty. A citation and notice of assessment,
a determination of compliance, or an assessment of a civil penalty 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,
the determination of compliance, or the assessment of civil penalty
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, an appealed determination of compliance, or an appealed
assessment of civil penalty 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 or penalty assessed.
NEW SECTION. Sec. 27 A new section is added to chapter 49.48 RCW
to read as follows:
Section 4 of this act governs the determination of independent
contractor status for purposes of this chapter.
Sec. 28 RCW 49.48.060 and 2010 c 42 s 5 and 2010 c 8 s 12050 are
each reenacted and amended to read as follows:
(1) If upon investigation by the director((, after taking
assignments of any wage claim under RCW 49.48.040 or after receiving a
wage complaint as defined in RCW 49.48.082 from an employee)), 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)) one or
more employees was not paid for his or her services and that the
employer continues to employ one or more employees, 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)) one year 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.)) shall, by
order issued under official seal, revoke the industrial insurance
certificate of coverage of the employer from whom the bond was
required. The employer shall post a copy of the order revoking its
industrial insurance certificate of coverage in a conspicuous place at
the main entrance to the employer's place of business. A copy of the
order must remain posted until the bond has been paid. A certificate
of coverage revoked under this section may not be reinstated and a new
certificate of coverage may not be issued to the employer until the
bond has been posted.
(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 one or more wage payment
requirements as defined in RCW 49.48.082, 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.
(4) 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. This subsection
does not apply to wage complaints made under RCW 49.48.083.
(3) An employer may appeal an order issued under this section
pursuant to RCW 49.48.084.
NEW SECTION. Sec. 29 A new section is added to chapter 49.48 RCW
to read as follows:
(1) An employer may not discharge, threaten, penalize, or otherwise
discriminate or retaliate against an employee because:
(a) The employee made a complaint, or the employer believes the
employee made a complaint, to the employer, the department, the
attorney general, or any other person that the employer engaged in
conduct that the employee reasonably believes violates this chapter;
(b) The employee has caused to be instituted, or is about to cause
to be instituted, a proceeding under or related to this chapter;
(c) The employee has testified or is about to testify in a
proceeding under or related to this chapter;
(d) The employee has, or the employer believes the employee has,
otherwise exercised rights protected by this chapter; or
(e) The department has determined that the employer violated this
chapter.
(2) If an employer takes adverse action against an employee within
ninety days of the employee having engaged in an activity described in
subsection (1) of this section, the employer is presumed to have acted
in retaliation. The employer may rebut this presumption with clear and
convincing evidence that the adverse action was taken for a permissible
purpose. For purposes of this subsection, "adverse action" includes
discharging, threatening, penalizing, or otherwise discriminating
against an employee.
(3) A complaint or other communication by an employee triggers the
protections of this section regardless of whether the complaint or
communication is in writing or makes explicit reference to this
chapter.
(4) A violation of this section is a gross misdemeanor.
NEW SECTION. Sec. 30 A new section is added to chapter 49.48 RCW
to read as follows:
(1) If, following an investigation, the department determines that
an employer violated section 29 of this act, it may order the employer
to:
(a) Pay a civil penalty of not less than one thousand dollars and
not more than ten thousand dollars per employee; or
(b) Pay any aggrieved employee the greater of:
(i) Ten thousand dollars; or (ii) three times the amount of any
wages, salary, employment benefits, or other compensation unlawfully
denied or withheld; or
(c) Reinstate the employee to his or her former position at not
less than the most recent rate of compensation received by the
employee, including the value of any benefits.
(2) An employer may appeal an order issued under this section
pursuant to RCW 49.48.084.
NEW SECTION. Sec. 31 A new section is added to chapter 49.48 RCW
to read as follows:
(1) An interested party or an individual aggrieved by a violation
of section 29 of this act may bring suit on behalf of himself or
herself or on behalf of any other individual who is similarly situated.
(2) If a court determines that an employer violated section 29 of
this act, it:
(a) Shall award the greater of:
(i) Three times the amount of any wages, salary, employment
benefits, or other compensation unlawfully denied or withheld; or
(ii) Statutory damages for each employee aggrieved by the
violation. Statutory damages may not exceed ten thousand dollars per
employee, unless the employer engaged in a pattern or practice of
violations, in which case the statutory damages must be not less than
ten thousand dollars and not more than twenty-five thousand dollars per
employee;
(b) May award injunctive or other equitable relief, including
reinstatement of the employee to his or her former position at not less
than the most recent rate of compensation received by the employee,
including the value of any benefits, or front pay in lieu of
reinstatement; and
(c) Shall award attorneys' fees and costs.
(3) A civil action under this section must be brought no later than
three years after the violation occurred. This period is tolled during
any period of time that the employer deters an individual from bringing
an action under this section.
NEW SECTION. Sec. 32 A new section is added to chapter 49.48 RCW
to read as follows:
An interested party may bring complaints under this chapter.
Sec. 33 RCW 49.46.010 and 2011 1st sp.s. c 43 s 462 are each
reenacted and amended to read as follows:
As used in this chapter:
(1) "Director" means the director of labor and industries;
(2) (("Employ" includes to permit to work)) "Department," "employ,"
"employer," "front pay," "interested party," and "pattern or practice"
mean the same as defined in section 3 of this act;
(3) "Employee" ((includes any individual employed by an employer
but shall not include)) means any person or entity that an employer
hires or suffers or permits to work. A person or entity may be an
employee of two or more employers at the same time. "Employee" does
not include a bona fide independent contractor or:
(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
salesperson as those terms are defined and delimited by rules of the
director. However, those terms shall be defined and delimited by the
human resources director 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;
(4) (("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;)) "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;
(5)
(((6))) (5) "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;
(((7))) (6) "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.
NEW SECTION. Sec. 34 A new section is added to chapter 49.46 RCW
to read as follows:
Section 4 of this act governs the determination of independent
contractor status for purposes of this chapter.
NEW SECTION. Sec. 35 A new section is added to chapter 49.46 RCW
to read as follows:
(1) An employer may not discharge, threaten, penalize, or otherwise
discriminate or retaliate against an employee because:
(a) The employee made a complaint, or the employer believes the
employee made a complaint, to the employer, the department, the
attorney general, or any other person that the employer engaged in
conduct that the employee reasonably believes violates this chapter;
(b) The employee has caused to be instituted, or is about to cause
to be instituted, a proceeding under or related to this chapter;
(c) The employee has testified or is about to testify in a
proceeding under or related to this chapter;
(d) The employee has, or the employer believes the employee has,
otherwise exercised rights protected by this chapter; or
(e) The department has determined that the employer violated this
chapter.
(2) If an employer takes adverse action against an employee within
ninety days of the employee having engaged in an activity described in
subsection (1) of this section, the employer is presumed to have acted
in retaliation. The employer may rebut this presumption with clear and
convincing evidence that the adverse action was taken for a permissible
purpose. For purposes of this subsection, "adverse action" includes
discharging, threatening, penalizing, or otherwise discriminating
against an employee.
(3) A complaint or other communication by an employee triggers the
protections of this section regardless of whether the complaint or
communication is in writing or makes explicit reference to this
chapter.
(4) A violation of this section is a gross misdemeanor.
NEW SECTION. Sec. 36 A new section is added to chapter 49.46 RCW
to read as follows:
(1) If, following an investigation, the department determines that
an employer violated section 35 of this act, it may order the employer
to:
(a) Pay a civil penalty of not less than one thousand dollars and
not more than ten thousand dollars per employee;
(b) Pay any aggrieved employee the greater of: (i) Ten thousand
dollars; or (ii) three times the amount of any wages, salary,
employment benefits, or other compensation unlawfully denied or
withheld; or
(c) Reinstate the employee to his or her former position at not
less than the most recent rate of compensation received by the
employee, including the value of any benefits.
(2) An employer may appeal an order issued under this section
pursuant to RCW 49.48.084.
NEW SECTION. Sec. 37 A new section is added to chapter 49.46 RCW
to read as follows:
(1) An interested party or an individual aggrieved by a violation
of section 35 of this act may bring suit on behalf of himself or
herself or on behalf of any other individual who is similarly situated.
(2) If a court determines that an employer violated section 35 of
this act, it:
(a) Shall award the greater of:
(i) Three times the amount of any wages, salary, employment
benefits, or other compensation unlawfully denied or withheld; or
(ii) Statutory damages for each employee aggrieved by the
violation. Statutory damages may not exceed ten thousand dollars per
employee, unless the employer engaged in a pattern or practice of
violations, in which case the statutory damages must be not less than
ten thousand dollars and not more than twenty-five thousand dollars per
employee;
(b) May award injunctive or other equitable relief, including
reinstatement of the employee to his or her former position at not less
than the most recent rate of compensation received by the employee,
including the value of any benefits, or front pay in lieu of
reinstatement; and
(c) Shall award attorneys' fees and costs.
(3) A civil action under this section must be brought no later than
three years after the violation occurred. This period is tolled during
any period of time that the employer deters an individual from bringing
an action under this section.
NEW SECTION. Sec. 38 RCW 49.46.100 (Prohibited acts of
employer--Penalty) and 2010 c 8 s 12044 & 1959 c 294 s 10 are each
repealed.
NEW SECTION. Sec. 39 A new section is added to chapter 50.04 RCW
to read as follows:
Section 4 of this act governs the determination of independent
contractor status for purposes of this chapter. The services of an
independent contractor are not services in employment subject to this
title.
Sec. 40 RCW 50.12.070 and 2009 c 432 s 11 are each amended to
read as follows:
(1)(a) Each employing unit shall keep true and accurate work
records, containing such information as the commissioner may prescribe.
Such records shall be open to inspection and be subject to being copied
by the commissioner or his or her authorized representatives at any
reasonable time and as often as may be necessary. The commissioner may
require from any employing unit any sworn or unsworn reports with
respect to persons employed by it, which he or she deems necessary for
the effective administration of this title.
(b) An employer who contracts with another person or entity for
work subject to chapter 18.27 or 19.28 RCW shall obtain and preserve a
record of the unified business identifier account number for and
compensation paid to the person or entity performing the work. In
addition to the penalty in subsection (3) of this section, failure to
obtain or maintain the record is subject to RCW 39.06.010.
(2)(a) Each employer shall register with the department and obtain
an employment security account number. Registration must include the
names and social security numbers of the owners, partners, members, or
corporate officers of the business, as well as their mailing addresses
and telephone numbers and other information the commissioner may by
rule prescribe. Registration of corporations must also include the
percentage of stock ownership for each corporate officer, delineated by
zero percent, less than ten percent, or ten percent or more. Any
changes in the owners, partners, members, or corporate officers of the
business, and changes in percentage of ownership of the outstanding
shares of stock of the corporation, must be reported to the department
at intervals prescribed by the commissioner under (b) of this
subsection.
(b) Each employer shall make periodic reports at such intervals as
the commissioner may by regulation prescribe, setting forth the
remuneration paid for employment to workers in its employ, the full
names and social security numbers of all such workers, and the total
hours worked by each worker and such other information as the
commissioner may by regulation prescribe.
(c) If the employing unit fails or has failed to report the number
of hours in a reporting period for which a worker worked, such number
will be computed by the commissioner and given the same force and
effect as if it had been reported by the employing unit. In computing
the number of such hours worked, the total wages for the reporting
period, as reported by the employing unit, shall be divided by the
dollar amount of the state's minimum wage in effect for such reporting
period and the quotient, disregarding any remainder, shall be credited
to the worker: PROVIDED, That although the computation so made will
not be subject to appeal by the employing unit, monetary entitlement
may be redetermined upon request if the department is provided with
credible evidence of the actual hours worked. Benefits paid using
computed hours are not considered an overpayment and are not subject to
collections when the correction of computed hours results in an invalid
or reduced claim; however:
(i) A contribution paying employer who fails to report the number
of hours worked will have its experience rating account charged for all
benefits paid that are based on hours computed under this subsection;
and
(ii) An employer who reimburses the trust fund for benefits paid to
workers and fails to report the number of hours worked shall reimburse
the trust fund for all benefits paid that are based on hours computed
under this subsection.
(3) Any employer who fails to keep and preserve records required by
this section shall be subject to a penalty determined by the
commissioner but not to exceed two hundred fifty dollars or two hundred
percent of the quarterly tax for each offense, whichever is greater.
(4) Upon referral from the department of labor and industries
pursuant to section 7 of this act, the employment security department
may initiate procedures for improper recordkeeping and the recovery of
contributions, interest, and penalties.
Sec. 41 RCW 50.12.072 and 2010 c 72 s 2 are each amended to read
as follows:
(1) An employer that knowingly fails to register with the
department and obtain an employment security account number, as
required under RCW 50.12.070(2), is subject to a penalty not to exceed
one thousand dollars per quarter or two times the taxes due per
quarter, whichever is greater. This penalty is in addition to all
other penalties and is in addition to higher rates for employers that
do not meet the definition of "qualified employer" under RCW 50.29.010.
This penalty does not apply if the employer can prove that it had good
cause to believe that it was not required to register with the
department.
(2) Upon referral from the department of labor and industries
pursuant to section 7 of this act, the employment security department
may initiate procedures for improper recordkeeping and the recovery of
contributions, interest, and penalties.
Sec. 42 RCW 50.24.070 and 2011 c 301 s 18 are each amended to
read as follows:
(1) At any time after the commissioner shall find that any
contributions, interest, or penalties have become delinquent, the
commissioner may issue an order and notice of assessment specifying the
amount due, which order and notice of assessment shall be served upon
the delinquent employer in the manner prescribed for the service of a
summons in a civil action, or using a method by which the mailing can
be tracked or the delivery can be confirmed. Failure of the employer
to receive such notice or order whether served or mailed shall not
release the employer from any tax, or any interest or penalties
thereon.
(2) The commissioner shall accept referrals based on a court
finding of a violation of section 5 of this act and may pursue a claim
for contributions.
Sec. 43 RCW 50.04.100 and 1982 1st ex.s. c 18 s 14 are each
amended to read as follows:
"Employment", subject only to the other provisions of this title,
means personal service, of whatever nature, unlimited by the
relationship of master and servant as known to the common law or any
other legal relationship, including service in interstate commerce,
performed for wages or under any contract calling for the performance
of personal services, written or oral, express or implied.
((Except as provided by RCW 50.04.145,)) Personal services
performed for an employing unit by one or more contractors or
subcontractors acting individually or as a partnership, which do not
meet the provisions of ((RCW 50.04.140)) section 39 of this act, shall
be considered employment of the employing unit: PROVIDED, HOWEVER,
That such contractor or subcontractor shall be an employer under the
provisions of this title in respect to personal services performed by
individuals for such contractor or subcontractor.
Sec. 44 RCW 50.04.298 and 2007 c 146 s 8 are each amended to read
as follows:
For the purposes of this title:
(1) "Professional employer organization" means a person or entity
that enters into an agreement with one or more client employers to
provide professional employer services. "Professional employer
organization" includes entities that use the term "staff leasing
company," "permanent leasing company," "registered staff leasing
company," "employee leasing company," "administrative employer," or any
other name, when they provide professional employer services to client
employers. The following are not classified as professional employer
organizations: Independent contractors in ((RCW 50.04.140)) section 39
of this act; temporary staffing services companies and services
referral agencies as defined in RCW 50.04.245; third-party payers as
defined in RCW 50.04.248; or labor organizations.
(2) "Client employer" means any employer who enters into a
professional employer agreement with a professional employer
organization.
(3) "Coemployer" means either a professional employer organization
or a client employer that has entered into a professional employer
agreement.
(4) "Covered employee" means an individual performing services for
a client employer that constitutes employment under this title.
(5) "Professional employer services" means services provided by the
professional employer organization to the client employer, which
include, but are not limited to, human resource functions, risk
management, or payroll administration services, in a coemployment
relationship.
(6) "Coemployment relationship" means a relationship that is
intended to be ongoing rather than temporary or project-specific, where
the rights, duties, and obligations of an employer in an employment
relationship are allocated between coemployers pursuant to a
professional employer agreement and state law. A coemployment
relationship exists only if a majority of the employees performing
services to a client employer, or to a division or work unit of a
client employer, are covered employees. In determining the allocation
of rights and obligations in a coemployment relationship:
(a) The professional employer organization has only those employer
rights and is subject only to those obligations specifically allocated
to it by the professional employer agreement or state law;
(b) The client employer has those rights and obligations allocated
to it by the professional employer agreement or state law, as well as
any other right or obligation of an employer that is not specifically
allocated by the professional employer agreement or state law.
(7) "Professional employer agreement" means a written contract
between a client employer and a professional employer organization that
provides for: (a) The coemployment of covered employees; and (b) the
allocation of employer rights and obligations between the client and
the professional employer organization with respect to the covered
employees.
NEW SECTION. Sec. 45 The following acts or parts of acts are
each repealed:
(1) RCW 50.04.140 (Employment -- Exception tests) and 1991 c 246 s 6
& 1945 c 35 s 15; and
(2) RCW 50.04.145 (Employment -- Exclusions) and 2008 c 102 s 1, 1983
1st ex.s. c 23 s 25, & 1982 1st ex.s. c 18 s 13.
Sec. 46 RCW 51.08.070 and 2008 c 102 s 2 are each amended to read
as follows:
"Employer" means any person, body of persons, corporate or
otherwise, and the legal representatives of a deceased employer, all
while engaged in this state in any work covered by the provisions of
this title, by way of trade or business, or who contracts with one or
more workers, the essence of which is the personal labor of such worker
or workers. Or as an exception to the definition of employer, persons
or entities are not employers when they contract or agree to remunerate
the services performed by an ((individual who meets the tests set forth
in subsections (1) through (6) of RCW 51.08.195 or the separate tests
set forth in RCW 51.08.181 for work performed that requires
registration under chapter 18.27 RCW or licensing under chapter 19.28
RCW)) independent contractor, as defined in section 4 of this act.
Sec. 47 RCW 51.08.180 and 2008 c 102 s 3 are each amended to read
as follows:
"Worker" means every person in this state who is engaged in the
employment of an employer under this title, whether by way of manual
labor or otherwise in the course of his or her employment; also every
person in this state who is engaged in the employment of or who is
working under an independent contract, the essence of which is his or
her personal labor for an employer under this title, whether by way of
manual labor or otherwise, in the course of his or her employment, or
as an exception to the definition of worker, a person is not a worker
if he or she meets the ((tests)) test set forth in ((subsections (1)
through (6) of RCW 51.08.195 or the separate tests set forth in RCW
51.08.181 for work performed that requires registration under chapter
18.27 RCW or licensing under chapter 19.28 RCW)) section 4 of this act:
PROVIDED, That a person is not a worker for the purpose of this title,
with respect to his or her activities attendant to operating a truck
which he or she owns, and which is leased to a common or contract
carrier.
NEW SECTION. Sec. 48 The following acts or parts of acts are
each repealed:
(1) RCW 51.08.181 ("Worker"--Registered contractor and electrician
exclusions) and 2008 c 102 s 5; and
(2) RCW 51.08.195 ("Employer" and "worker" -- Additional exception)
and 2008 c 102 s 4 & 1991 c 246 s 1.
NEW SECTION. Sec. 49 The definitions in this section apply
throughout this chapter unless the context clearly requires otherwise.
(1) "Department" means the department of labor and industries.
(2) "Employ" and "employer" mean the same as defined in section 3
of this act.
(3) "Employee" means a person who performs services for an
employer, but does not include a bona fide independent contractor. A
person or entity may be an employee of two or more employers at the
same time.
(4) "Improvement" means all property upon which the employee has
performed work or furnished materials at the instance of the owner or
of any person acting by the owner's authority or under the owner as a
contractor or otherwise. "Improvement" does not include an improvement
that is subject to a lien under chapter 60.04 RCW or would be subject
to a lien under chapter 60.04 RCW if filed during the period of
limitation established by RCW 60.04.141.
(5) "Party in interest" means a person who stands to gain or lose
by the operation of the lien. "Party in interest" includes but is not
limited to a purchaser of the property and a financial institution with
a security interest in the property.
(6) "Wage claim" means the amount of wages owed to an employee, as
well as any statutory penalties that may be owed for violation of a
state or federal wage law, including but not limited to chapters 39.12,
49.12, 49.46, 49.48, 49.52, and 49.-- RCW (the new chapter created in
section 61 of this act), and the fair labor standards act, 29 U.S.C.
Sec. 201 et seq.
NEW SECTION. Sec. 50 Section 4 of this act governs the
determination of independent contractor status for purposes of this
chapter.
NEW SECTION. Sec. 51 (1) An employee has a lien for wage claims
on: (a) Any real or personal property in this state that is owned by
the employee's employer; and (b) improvements in this state.
(2) Chapter 62A.9A RCW of the uniform commercial code does not
apply to a lien on the personal property of an employer under this
chapter.
NEW SECTION. Sec. 52 (1) To establish a lien on real property or
improvements, the lien claimant must:
(a) File for recording a notice of claim of lien in the county
where the property is located. The notice must:
(i) State the name, telephone number, and address of the lien
claimant, and if the lien has been assigned, the name of the assignee;
(ii) State the name of the employer;
(iii) State the street address, legal description, or other
description reasonably calculated to identify, for a person familiar
with the area, the location of the real property or the nature of the
improvements to be charged with the lien;
(iv) State the principal amount for which the lien is claimed;
(v) Be signed by the lien claimant or a person authorized to act on
his or her behalf;
(vi) Affirmatively state that the lien claimant or person
authorized to act on his or her behalf has read the notice of claim of
lien and believes it to be true and correct under penalty of perjury;
and
(vii) Be acknowledged and certified as set forth in subsection (3)
of this section;
(b) Pay a filing fee established by the county auditor; and
(c) Mail a copy of the notice filed under this subsection (1) to
the employer's registered agent, the employer's registered business
address, or the address where the employer resides, by certified mail
with return receipt requested.
(2) To establish a lien on personal property, the lien claimant
must:
(a) File for recording a notice of claim of lien with the
department of licensing. The notice must:
(i) State the name, phone number, and address of the lien claimant,
and if the lien has been assigned, the name of the assignee;
(ii) State the name of the employer;
(iii) Describe the personal property subject to the lien or
indicate that the lien covers all personal property;
(iv) State the principal amount for which the lien is claimed;
(v) Be signed by the lien claimant or a person authorized to act on
his or her behalf;
(vi) Affirmatively state that the lien claimant or person
authorized to act on his or her behalf has read the notice of claim of
lien and believes it to be true and correct under penalty of perjury;
and
(vii) Be acknowledged and certified as set forth in subsection (3)
of this section;
(b) Pay a filing fee established by the department of licensing;
and
(c) Mail a copy of the notice filed under this subsection (2) to
the employer's registered agent, the employer's registered business
address, or the address where the employer resides, by certified mail
with return receipt requested.
(3) Notwithstanding subsections (1) and (2) of this section, a
claim of lien, acknowledgment, and certificate substantially in the
following form shall be sufficient:
. . . . . ., claimant, vs . . . . . ., name of person indebted to claimant:
Notice is hereby given that the claimant named below asserts a lien pursuant to chapter 60.-- RCW (the new chapter created in section 62 of this act). In support of this lien the following information is submitted:
1. NAME OF LIEN CLAIMANT: . . . . . . . . . . . .
TELEPHONE NUMBER: . . . . . . . . . . . .
ADDRESS: . . . . . . . . . . . .
2. NAME OF EMPLOYER: . . . . . . . . . . . .
. . . . . . . . . . . .3. DESCRIPTION OF THE REAL PROPERTY, PERSONAL PROPERTY, OR IMPROVEMENTS AGAINST WHICH A LIEN IS CLAIMED (Street address, legal description, or other information that will reasonably describe the property, or statement that the lien covers all personal property):
. . . . . . . . . . . .
. . . . . . . . . . . .
. . . . . . . . . . . .
4. PRINCIPAL AMOUNT FOR WHICH THE LIEN IS CLAIMED IS:
. . . . . . . . . . . .
5. IF THE CLAIMANT IS THE ASSIGNEE OF THIS CLAIM SO STATE HERE: . . . . . . . . . . . .
. . . . . . . . . . . .
6. IF THE PERSON SIGNING THIS CLAIM OF LIEN IS NOT THE CLAIMANT, BUT IS AUTHORIZED TO ACT ON THE CLAIMANT'S BEHALF, STATE THE PERSON'S NAME AND REPRESENTATIVE CAPACITY:
NAME: . . . . . . . . . . . .
REPRESENTATIVE CAPACITY (e.g., officer or employee of claimant; attorney or agent; representative of lien filing service; administrator, representative, or agent of trustees of employee benefit plan): . . . . . . . . . . . .
. . . . . .Dated: . . . . . . . . . . . .. . . . . . . . . . . .
. . . . . . . . . . . .. . . . . . . . . . . .
. . . . . . . . . . . . (Signature)
NEW SECTION. Sec. 53 Any lien or right of lien created by this
chapter and the right of action to recover the lien is assignable so as
to vest in the assignee all rights and remedies of the assignor,
subject to all defenses thereto that might be made.
NEW SECTION. Sec. 54 (1) An action to foreclose the lien must be
filed within one year of the date the lien was recorded.
(2)(a) A lien may be foreclosed by an action in: (i) The superior
court in the county in which the real property or improvements are
located; (ii) the district court in the county in which the personal
property is located if the value of the claim does not exceed the
jurisdictional limit of the court provided in RCW 3.66.020; or (iii)
the superior court in the county in which the personal property is
located if the value of the claim exceeds the jurisdictional limit of
the district court provided in RCW 3.66.020.
(b) If the lien claimant has instituted an action for the wage
claim that is the subject of the lien, that action must also be deemed
an action to foreclose on the lien.
(3) A foreclosure action or an action for a wage claim may be
brought by the employee individually, the department, the United States
department of labor, the office of the attorney general, or a
representative of the employee, including a collective bargaining
representative or class representative. Multiple wage claims against
the same employer may be joined in a single proceeding, but the court
may order separate trials or hearings.
(4) If the employee pursues the wage claim in an administrative
proceeding before the department, a final and binding citation issued
by the department establishes the amount of wages and penalties owed
for the purpose of foreclosure under this chapter.
(5) In the judgment resulting from such a foreclosure action, the
court may order the sale at sheriff's auction or the transfer to the
plaintiff of title or possession of any property subject to the lien.
Whether or not the court makes such an order as part of the judgment,
a writ of sale may be issued for any property subject to the lien for
ten years after a judgment for a wage claim is issued. A lien based on
an underlying judgment continues in force for an additional ten-year
period if the period of execution for the underlying judgment is
extended under RCW 6.17.020. A lien claimant who prevails in a
foreclosure action is entitled to costs and reasonable attorneys' fees.
NEW SECTION. Sec. 55 (1) A lien is extinguished:
(a) If an action for the underlying wage claim is not brought
within one year of the filing of the lien;
(b) If the action for the underlying wage claim is dismissed with
prejudice and no appeal is filed within the applicable appeals period.
If an appeal is filed, the lien continues in force until final judgment
is rendered; or
(c) Upon payment and acceptance of the amount due to the lien
claimant.
(2) If the lien is extinguished, upon demand and fifteen days'
written notice by the property owner, the lien claimant shall file a
release of lien at the place the lien was recorded and provide a copy
of the release of lien to the property owner. If the lien claimant
fails to release the lien as provided in this section, the property
owner has a private right of action against the lien claimant for
injunctive relief, costs, and reasonable attorneys' fees.
NEW SECTION. Sec. 56 (1) Except for child support income
withholding, which has priority, and except as provided in subsections
(2) and (3) of this section, a lien recorded under this chapter takes
priority over all other debts, judgments, decrees, liens, security
interests, or mortgages against the employer, regardless as to whether
these debts, judgments, decrees, liens, security interests, or
mortgages originated before or after the wage lien, and regardless of
whether these debts, judgments, decrees, liens, or mortgages were
perfected prior to the wage lien. A wage lien is effective against the
estate of the employer. A wage lien is not effective against a
subsequent bona fide purchaser of the property subject to the lien.
(2) If more than one statutory lien for wages owed is filed,
including but not limited to liens under this chapter and chapters
60.04, 60.11, 60.16, 60.24, 60.28, 60.34, and 60.76 RCW, priority is
based on the order in which the liens are filed, with the earlier-filed
liens taking priority over the later-filed liens.
(3) A lien recorded under this chapter is subordinate to a lien for
taxes that the department of revenue is authorized or required to
collect and that originates before a lien recorded under this chapter.
NEW SECTION. Sec. 57 (1)(a) An employer subject to a lien under
this chapter or a party in interest may file a bond issued by a surety
company authorized to issue surety bonds in the state. Recording a
bond releases the real property, personal property, or improvements
described in the notice of claim of lien from the lien and any action
brought to recover the amount claimed.
(b) The bond must be recorded at the place the lien was recorded.
The bond must: (i) Contain a description of the claim of lien and real
property, personal property, or improvements involved; and (ii) be in
an amount no less than one thousand dollars or one and one-half times
the amount of the lien, whichever is greater.
(c) The condition of the bond must be to guarantee payment of any
judgment on the lien in favor of the lien claimant that is entered in
an action for a wage claim or a foreclosure action.
(d) If no action is commenced to recover on a lien within one year
of the filing of the lien, the surety is discharged from liability
under the bond. If an action is timely commenced, then on payment of
any judgment entered in the action or on payment of the full amount of
the bond to the holder of the judgment, whichever is less, the surety
is discharged from liability under the bond.
(2) In lieu of the surety bond provided for in subsection (1) of
this section, an employer subject to a lien under this chapter or a
party in interest may deposit with the treasurer of the county in which
the claim of lien is filed or with the department of licensing, as
applicable, an amount equal to the greater of one thousand dollars or
one and one-half times the amount claimed under the lien.
(3) A person entitled to post a bond under subsection (1) of this
section or to deposit an amount under subsection (2) of this section
may provide to the lien claimant a written notice of the filing of the
bond or deposit. The notice must include a demand that the lien be
released or foreclosed and state that if the lien is not released or
foreclosed, the person may recover the actual costs the person incurred
in complying with this section or five hundred dollars, whichever is
greater. The written notice and demand must be delivered to the lien
claimant by certified mail with return receipt requested.
(4)(a) A lien claimant who is served with a written notice and
demand in compliance with subsection (3) of this section is liable to
the person who filed the bond or made the deposit if the lien claimant
does not release or bring an action to foreclose the lien within
fifteen days after receiving the written notice and demand.
(b) The amount of the lien claimant's liability under this
subsection (4) is the amount of the costs the person who filed the bond
or made the deposit incurred in complying with this section, or five
hundred dollars, whichever is greater.
(5) If a lien claimant who is served with a written notice and
demand under subsection (3) of this section prevails in the action to
release or foreclose the lien, then in addition to other costs and
attorney fees to which the lien claimant is entitled, the court shall
award the lien claimant five hundred dollars or the lien claimant's
actual costs incurred in addressing the written notice and demand,
whichever is greater.
(6) If a lien claimant establishes the validity of the underlying
wage claim in an action to enforce the lien, the lien claimant is
entitled to judgment against the surety upon the bond or against the
money deposited.
NEW SECTION. Sec. 58 A contract between an employer and employee
may not waive or require an employee to waive the right to a lien under
this chapter. A provision of a contract made in violation of this
section is void as against the public policy of this state.
NEW SECTION. Sec. 59 The claim of lien, when filed as required
by this chapter, shall be notice to the spouse or the domestic partner
of the person who appears on record to be the owner of the property
sought to be charged with the lien, and shall subject all the community
interest of both spouses or both domestic partners to the lien.
NEW SECTION. Sec. 60 This chapter is to be liberally construed
to provide security for all parties intended to be protected by its
provisions.
NEW SECTION. Sec. 61 Sections 2 through 11 of this act
constitute a new chapter in Title
NEW SECTION. Sec. 62 Sections 49 through 60 of this act
constitute a new chapter in Title
NEW SECTION. Sec. 63 If any provision of this act or its
application to any person or circumstance is held invalid, the
remainder of the act or the application of the provision to other
persons or circumstances is not affected.
NEW SECTION. Sec. 64 If any part of this act is found to be in
conflict with federal requirements that are a prescribed condition to
the allocation of federal funds to the state or the eligibility of
employers in this state for federal unemployment tax credits, the
conflicting part of this act is inoperative solely to the extent of the
conflict, and the finding or determination does not affect the
operation of the remainder of this act. Rules adopted under this act
must meet federal requirements that are a necessary condition to the
receipt of federal funds by the state or the granting of federal
unemployment tax credits to employers in this state.