AN ACT Relating to establishing wage liens; and adding a new chapter to Title 60 RCW.

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

(1) "Department" means the department of labor and industries.

(2) "Director" means the director of labor and industries.

(3) "Employ" includes permit to work.

(4) "Employee" includes any individual currently or formerly employed by an employer.

(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.

(6) "Maintain" includes to maintain, clean, manage, improve, protect, repair, monitor, or restore real property at the instance of the owner or tenant or of any person acting by the owner's or tenant's authority.

(7) "Wage claim" means a claim for any unpaid wages owed to the claimant as an employee of an employer, as well as any other compensation, interest, statutory damages, liquidated damages, or 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, and 49.52 RCW, and the fair labor standards act, 29 U.S.C. Sec. 201 et seq.

(i) Any property in the state of Washington that is owned or is subsequently acquired by the person's employer;

(ii) Any property in the state of Washington that is owned or is subsequently acquired by an officer, vice principal, or agent of the employer who is personally liable for a wage claim under RCW 49.52.070; and

(iii) Any real property in the state of Washington that the person has maintained, for all wage claims for maintenance of that property.

(b) A person does not have a wage lien under this chapter on any property that is or would be subject to a lien by that person under chapter 60.04 RCW.

(2) A wage lien is not effective against:

(a) With respect to goods as defined in RCW 62A.9A-102, a buyer in the ordinary course of business, as such term is defined in RCW 62A.1-201(a)(9); or

(b) Third persons who, prior to the filing of the wage lien notice required under this chapter, acquired title in good faith, for value and without actual notice of the wage lien, to property other than goods.

(3) Chapter 62A.9A RCW of the uniform commercial code does not apply to a wage lien on personal property under this chapter.

(4) A person, other than a consumer as defined in RCW 62A.1-201, who controls or possesses amounts payable to the employer that are not health-care-insurance receivables as defined in chapter 62A.9A RCW, and that are properly encumbered by a wage lien upon an account receivable, is not obligated to pay a lien claimant amounts to which the wage lien has attached until that person receives written notice of such lien, nor is the person liable to the lien claimant for any amounts paid out prior to receipt of notice of the wage lien. The notice required must state that the amount due or to become due has been assigned and that payment is to be made to the lien claimant, and it must contain the information described in section 4 of this act. After receipt of the notice, the person responsible for payment of such amounts may discharge its obligation by paying the lien claimant and may not discharge the obligation by paying the employer. If requested by the person responsible for payment of such amounts, the lien claimant must, within a reasonable time, furnish reasonable proof that the wage lien continues to exist, and unless such proof is furnished, that person has no obligation to pay the lien claimant and may discharge its obligation by paying the employer. A written, signed statement from the employee that the wages that form the basis for the wage lien have not been paid in the time after filing the wage lien constitutes "reasonable proof" for this purpose. Failure to furnish any notice as provided in this section does not affect the status of the wage lien established under this chapter in regard to the relationship with other creditors.

(5) This chapter does not affect the title of the state or other public ownership, nor does any lien attach to the fee simple title of the state or other public ownership.

(a) File for recording a notice of claim of wage lien in the county where the property is located that includes:

(i) The name, telephone number, and address of the lien claimant and, if the wage lien has been assigned, the name of the person who assigned the lien;

(ii) The name of the employer;

(iii) 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 to be charged with the wage lien;

(iv) The amount for which the wage lien is claimed;

(v) The signature of the lien claimant or of a person authorized to act on his or her behalf; and

(vi) An acknowledgment and certification 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, and to the property owner if the employer is not the property owner, by certified mail with return receipt requested.

(2) To establish a wage lien on personal property, the lien claimant must:

(a) File for recording a notice of claim of wage lien with the department of licensing that includes:

(i) The name, telephone number, and address of the lien claimant and, if the wage lien has been assigned, the name of the person who assigned the lien;

(ii) The name of the employer;

(iii) A description of the personal property subject to the wage lien or a statement that the wage lien covers all personal property;

(iv) The principal amount for which the wage lien is claimed;

(v) The signature of the lien claimant or of a person authorized to act on his or her behalf; and

(vi) An acknowledgment and certification 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) A notice of claim of wage lien, acknowledgment, and certificate that is substantially in the following form is sufficient to satisfy subsections (1)(a) and (2)(a) of this section:

CLAIM OF WAGE LIEN

. . . . ., claimant, vs. . . . . ., name of person indebted to claimant:

Notice is hereby given that the claimant named below asserts a wage lien pursuant to chapter 60.-- RCW (the new chapter created in section 12 of this act). In support of this wage lien the following information is submitted:

1. NAME OF LIEN CLAIMANT:. . . .

TELEPHONE NUMBER:. . . .

ADDRESS:. . . .

2. NAME OF EMPLOYER:. . . .

3. DESCRIPTION OF THE REAL PROPERTY OR PERSONAL PROPERTY AGAINST WHICH A WAGE LIEN IS CLAIMED (street address, legal description, or other information that will reasonably describe the property, or statement that the wage lien covers all personal property):. . . .

. . . . 

. . . . 

. . . . 

. . . . 

4. PRINCIPAL AMOUNT FOR WHICH THE WAGE LIEN IS CLAIMED IS:

. . . . 

5. IF THE CLAIMANT IS THE ASSIGNEE OF THIS CLAIM SO STATE HERE AND STATE THE NAME OF THE ASSIGNOR:. . . .

. . . . 

6. IF THE PERSON SIGNING THIS CLAIM OF WAGE 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):. . . .

. . . . 

ACKNOWLEDGMENT

FOR AN ACKNOWLEDGMENT IN AN INDIVIDUAL CAPACITY:

STATE OF WASHINGTON, COUNTY OF

. . . . . ., ss.

. . . . . ., being sworn, says: I, .....(name of person)....., am the claimant. I have read the foregoing claim of wage lien, believe the claim of wage lien to be true and correct under penalty of perjury, and believe the claim of wage lien is not frivolous, is made with reasonable cause, and is not clearly excessive. The foregoing claim of wage lien is my free and voluntary act for the uses and purposes stated therein.

. . . . . .Dated:. . . .

. . . . 

. . . . 

. . . . 

(Signature)

FOR AN ACKNOWLEDGMENT IN A REPRESENTATIVE CAPACITY:

STATE OF WASHINGTON, COUNTY OF

. . . . . ., ss.

. . . . . ., being sworn, says: I, ...(name of person)..., am authorized to act on behalf of the claimant. I have read the foregoing claim of wage lien, believe the claim of wage lien to be true and correct under penalty of perjury, and believe the claim of wage lien is not frivolous, is made with reasonable cause, and is not clearly excessive. The foregoing claim of wage lien is the free and voluntary act of the claimant for the uses and purposes stated therein.

. . . . . .Dated:. . . .

. . . . 

. . . . 

. . . . 

(Signature)

CERTIFICATE

FOR A CERTIFICATE OF ACKNOWLEDGMENT IN AN INDIVIDUAL CAPACITY:

I certify that I know or have satisfactory evidence that . . . (name of person) . . . is the person who appeared before me, and said person acknowledged that he/she signed this instrument and acknowledged it to be his/her free and voluntary act for the uses and purposes mentioned in the instrument.

. . . . . .Dated:. . . .

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. . . . 

. . . . 

(Signature)

(Seal or stamp)

. . . . . . . Title. . . .

. . . . . . . My appointment. . . .

. . . . . . . Expires. . . .

FOR A CERTIFICATE OF ACKNOWLEDGMENT IN A REPRESENTATIVE CAPACITY:

I certify that I know or have satisfactory evidence that . . . (name of person) . . . is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledged it as the . . . (type of authority, e.g., officer or employee, etc.) . . . of . . . (name of party on behalf of whom instrument was executed) . . . to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

. . . . . .Dated:. . . .

. . . . 

. . . . 

(Signature)

(Seal or Stamp)

. . . . . . Title. . . .

. . . . . . My appointment. . . .

. . . . . . Expires. . . .

(4)(a) For a notice of claim of wage lien on real property filed under this section, the county auditor shall record the notice in the same manner as deeds and other instruments of title are recorded under chapter 65.08 RCW. Notices of claim of wage lien for registered land need not be recorded in the Torrens register.

(b) For a notice of claim of wage lien on personal property filed under this section, the department of licensing shall record the notice.

(5) The notice of claim of wage lien may be filed at any time prior to the expiration of the statute of limitations for an action to recover the wages that are the subject of the wage lien.

(6) Mistakes or errors in the claimed amount owed do not invalidate the wage lien unless made with the intent to defraud.

(7) A wage lien under this chapter continues in all identifiable proceeds of the property subject to the wage lien.

(2) A wage lien may be foreclosed by an action in:

(a) The superior court in the county in which the real property is located;

(b) 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

(c) 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.

(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)(a) 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 owed for the purpose of foreclosure under this chapter only if the department brings the foreclosure action on behalf of the employee.

(b) If the employee obtains a judgment from a federal court, the judgment establishes the amount owed for the purposes of foreclosure under this chapter.

(5) In the judgment resulting from an action to foreclose on the wage lien, the court may order the sale at sheriff's auction or the transfer to the lien claimant of title or possession of any property subject to the wage 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 wage lien for ten years after a judgment for a wage claim is issued. A wage 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.

(6) A lien claimant who prevails in a foreclosure action is entitled to costs and reasonable attorneys' fees.

(a) If an action for the underlying wage claim is not brought within one year of the filing of the wage 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 wage lien continues in force until final judgment is rendered; or

(c) Upon payment and acceptance of payment for the employee's wage claim.

(2)(a) When the wage lien has been extinguished, the lien claimant shall, within fifteen days, file a release of the wage lien at the place where the wage lien was recorded and pay a filing fee established by the agency where the notice is filed. If a lien claimant fails to file a release of the wage lien, upon demand and fifteen days' notice by the employer or any affected party, mailed to the lien claimant's address as indicated on the notice of the wage lien by certified mail with return receipt requested, the employer or affected party may petition the court for an order releasing the wage lien. If the lien claimant acted unreasonably and in bad faith in refusing to file a release of the wage lien, the employer or affected party shall be entitled to recover its attorneys' fees and costs incurred in the action, and the court in its discretion may also issue a fine not to exceed one thousand dollars.

(b) The release must include:

(i) the name, telephone number, address, and relationship to the wage lien of the person filing the notice;

(ii) The name, telephone number, and address of the lien claimant;

(iii) The name of the employer;

(iv) A description of the property subject to the wage lien;

(v) The amount for which the wage lien was claimed;

(vi) The signature of the lien claimant, the lien claimant's assignor, or a person authorized to act on the lien claimant's behalf; and

(vii) A certified acknowledgment as set forth in subsection (4) of this section.

(3) The person filing the notice must mail a copy of the notice to the person against whom the lien claim was made by first-class mail within ten days of filing the notice.

(4) A release of wage lien substantially in the following form is sufficient:

NOTICE OF RELEASE OF WAGE LIEN

. . . . ., claimant, vs. . . . . . ., name of person indebted to claimant:

Notice is hereby given that the wage lien described below is released.

1. NAME OF PERSON FILING NOTICE OF RELEASE:. . . .

TELEPHONE NUMBER:. . . .

ADDRESS:. . . .

RELATIONSHIP TO WAGE LIEN (lien claimant, representative of lien claimant, assignee of lien claimant):. . . .

IF THE PERSON SIGNING THIS NOTICE IS NOT THE CLAIMANT, BUT IS AUTHORIZED TO ACT ON BEHALF OF THE CLAIMANT, STATE THE PERSON'S NAME AND 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):. . . .

. . . . 

2. NAME OF LIEN CLAIMANT:. . . .

TELEPHONE NUMBER:. . . .

ADDRESS:. . . .

3. NAME OF EMPLOYER:. . . .

4. DESCRIPTION OF THE REAL PROPERTY OR PERSONAL PROPERTY AGAINST WHICH A WAGE LIEN IS CLAIMED (street address, legal description, or other information that will reasonably describe the property, or statement that the wage lien covers all personal property):. . . .

. . . . 

. . . . 

. . . . 

. . . . 

5. AMOUNT OF WAGE LIEN CLAIM:. . . .

ACKNOWLEDGMENT

FOR AN ACKNOWLEDGMENT IN AN INDIVIDUAL CAPACITY:

STATE OF WASHINGTON, COUNTY OF

. . . . . ., ss.

. . . . . ., being sworn, says: I, ...(name of person)..., am the (claimant/assignee of the claimant). I have read the foregoing release of wage lien and believe the notice to be true and correct under penalty of perjury.

. . . . . .Dated:. . . .

. . . . 

. . . . 

(Signature)

FOR AN ACKNOWLEDGMENT IN A REPRESENTATIVE CAPACITY:

STATE OF WASHINGTON, COUNTY OF

. . . . . ., ss.

. . . . . ., being sworn, says: I, ...(name of person)..., am authorized to act on behalf of (claimant/assignee of the claimant). I have read the foregoing release of wage lien and believe the notice to be true and correct under penalty of perjury.

. . . . . .Dated:. . . .

. . . . 

. . . . 

(Signature)

CERTIFICATE

FOR A CERTIFICATE OF ACKNOWLEDGMENT IN AN INDIVIDUAL CAPACITY:

I certify that I know or have satisfactory evidence that . . . (name of person) . . . is the person who appeared before me, and said person acknowledged that he/she signed this instrument and acknowledged it to be his/her free and voluntary act for the uses and purposes mentioned in the instrument.

. . . . .Dated:. . . .

. . . . 

. . . . 

(Signature)

(Seal or stamp)

. . . . . . Title. . . .

. . . . . . My appointment. . . .

. . . . . . Expires. . . .

FOR A CERTIFICATE OF ACKNOWLEDGMENT IN A REPRESENTATIVE CAPACITY:

I certify that I know or have satisfactory evidence that . . . (name of person) . . . is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledged it as the . . . (type of authority, e.g., officer or employee, etc.) . . . of . . . (name of party on behalf of whom instrument was executed) . . . to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

. . . . . . Dated:. . . .

. . . . 

. . . . 

(Signature)

(Seal or stamp)

. . . . . . Title. . . .

. . . . . . My appointment. . . .

. . . . . . Expires. . . .

(2) A statutory lien for wages owed, including but not limited to liens under chapters 60.04, 60.11, 60.16, 60.24, 60.28, 60.34, and 60.76 RCW, ranks according to priority in time of filing.

(3)(a) A wage lien recorded under this chapter as to real property does not have priority over a mortgage or deed of trust that was recorded prior to the recording of the wage lien.

(b) A wage lien recorded under this chapter does not have priority over 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. 

(c) A wage lien recorded under this chapter does not have priority over liens or income withholding for child support obligations.

(4) A wage lien is effective against the estate of the employer.

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