At the urging of AGC, key legislators pressured L&I to reduce the amount of time the department had been taking to complete its share of the retainage release process. In its report to the legislators, L&I shows that the average number of days to issue the certificate of retainage release has decreased from 110 days to 45 days. L&I also noted that the backlog of contracts needing review, which had climbed to 1,100, has been cut to 300 projects, the lowest number since the program began in 2009.
“This is a significant improvement,” said AGC Chief Lobbyist Jerry VanderWood. “We are pleased that L&I took seriously the concerns raised by our contractors about the onerous amount of time it’s been taking to get retainage released. We will continue to work with the department and legislators to ensure the improvement continues. We also thank the legislators who interceded on an issue that is important to our members.”
In June, AGC approached Rep. Mike Sells (D-38), Rep. Matt Manweller (R-13), and Sen. Michael Baumgartner (R-6) about concerns raised by contractors about the log-jam that had developed within L&I and the length of time it had been taking to get retainage released. The legislators sent a letter to L&I Director Joel Sacks requesting that the department take steps to eliminate the backlog, reduce the average approval timeline to 60 days and make a report to the Legislature about these efforts. (Rep. Sells chairs the House Labor and Workplace Standards Committee; Rep. Manweller is its Ranking Minority Member. Sen. Baumgartner chairs the Senate Commerce, Labor and Sports Committee.)
In its report to the Legislature, L&I credits technology improvements and additional staff for the improvements. L&I has implemented its Retainage Overview Analysis and Release (ROAR) system, which allows electronic entry of contracts into L&I’s system and eliminates 90 percent of hand entry. ROAR also created a more efficient system for contract review by integrating all the needed information for review into one place.
With regard to potential additional improvements, L&I notes that retainage release delays can occur when a contractor ends up in an audit situation because they were paying workers’ comp in the wrong risk class. Added technological changes could ensure that contractors are paying into the correct risk class at the beginning of the project, thus preventing retainage release delays at the end of a project. L&I may seek funding for this in future budget requests.
While applauding L&I’s improvements, VanderWood notes that L&I is only one of several entities that has to “sign off” on retainage release. Others include the public owner, Department of Revenue and the Department of Employment Security. AGC will continue to work to make sure retainage is released in as timely a fashion as possible.
For more information, contact AGC’s Chief Lobbyist Jerry VanderWood, 360.352.5000.