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Workers’ Comp Release Takes Effect for Retainage on Public Work

L&I can now collect unpaid workers’ comp premiums from the retainage funds kept by a public agency on most prevailing wage projects.

Upon completion of a contract over $35000 the new law requires the public agency that contracted the project to notify both L&I and the state Department of Revenue. L&I will approve release of the retainage funds when it certifies that contractors on the public works project have paid their workers’ comp premiums.

If L&I finds that a contractor has unpaid workers’ comp premiums it can collect the debt from the public agency and the retainage fund held by that agency for that project.

The Department of Revenue already had a release requirement for general state business taxes. The new law adds workers comp to that list of taxes and is a result of efforts to clamp down on “underground economy” contractors who intentionally sidestep their responsibilities.

If AGC members experience delays in release of retainage they should contact the AGC Legislative Office at 360-352-5000 and staff will help expedite the request.

For more information on the process please see this prevailing wage fact sheet on the L&I Web site. The fact sheet includes a link to the release request form.

Questions? Contact Department of Labor and Industries at 360-902-5759 or e-mail at

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