When the new year begins, weekly certified payroll reports will be required to be filed online with L&I at least once a month for work performed on all public-works projects. This change effects all public works projects that are in progress as of January 1 and all new ones moving forward. Contractors can view training videos to learn how to file certified payrolls online.
The certified payroll requirement, it’s important to note, is just one element of legislation (ESSB 5035) passed by the Legislature in 2019. Other elements include significantly increased penalties for non-compliance of prevailing wage laws. A summary of ESSB 5035, which becomes effective Jan. 1, 2020, is below:
The time period to file a complaint concerning the nonpayment of prevailing wage is changed from 30 days to 60 days from the acceptance date of the public works project. Failure to timely file a complaint does not prohibit L&I from investigating the matter in pursuit of recovering unpaid wages for a worker or workers. However, L&I may only recover wages owed and cannot charge a contractor with a violation of failing to pay prevailing wage. L&I may not investigate or recover unpaid prevailing wages if the complaint is filed after two years. If L&I finds that a violation occurred, it may issue a notice of violation for unpaid wages, penalties, and interest on all wages owed at 1 percent per month.
The civil penalty for the nonpayment of prevailing wage is changed to a minimum of $5,000 or an amount equal to 50 percent of the total prevailing wage violation found on the contract, whichever is greater, and interest at 1 percent per month. After a complaint is filed and before a final determination is made, if the contractor or subcontractor pays the unpaid wages, interest of 1 percent per month, and penalties of $1,000 or an amount equal to 20 percent of the total prevailing wage violation, the matter is resolved without further penalty. If a contractor or subcontractor uses this option twice in a five-year period, the contractor is subject to the higher penalty amounts and is barred from bidding on public works contracts for two years. Notices of violation that are not timely appealed are final and binding and not subject to further appeal.
The director of L&I may waive or reduce a penalty or additional sanction, but may not waive or reduce interest. L&I must submit a report of the waivers granted, including the justification for any waiver, upon request of an interested party.
The burden of proving, by a preponderance of the evidence, that an error was the result of an inadvertent filing or reporting error, and, as a result, is not subject to civil penalties, rests with the contractor or employer. An inadvertent filing or reporting error is a mistake and is made in spite of the use of due care by the contractor or employer. An inadvertent filing or reporting error includes a contractor who, in good faith, relies on a written determination provided by L&I and pays its workers, laborers, and mechanics accordingly, but is later found to have not paid the proper prevailing wage rate.
Each contractor and subcontractor must keep accurate payroll records for three years from the date of acceptance of the public works contract. Contractors must, at least once per month, file a copy of its certified payroll records using L&I’s online system or directly with L&I.
A definition of unpaid prevailing wages is added. Unpaid prevailing wages, or unpaid wages, means the employer fails to pay all of the prevailing wage rate owed for any workweek by the regularly established pay day for the period in which the workweek ends.
Every employer must pay all wages, other than usual benefits, owing to its employees not less than once a month. Every employer must pay all usual benefits owing to its employees by the regularly established deadline for those benefits.