wa-law.org > bill > 2025-26 > HB 2191 > Original Bill
The legislature finds that:
There is a substantial underground economy in the construction industry in the state.
Underground economy practices, such as misclassifying employees as independent contractors, cost workers an estimated $142.6 million on average per year in wages and benefits between 2011 and 2021, according to a 2023 report by the Washington state institute for public policy.
State law establishes protections for employees to ensure they are paid wages fully and on time. However, current law does not include a mechanism for a worker employed by a subcontractor to seek payment of unpaid wages and benefits from upper-tier contractors.
The legislature intends to create additional mechanisms for workers to seek payment of wages and benefits owed to them when those wages and benefits are illegally withheld.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
"Construction contract" means an express or implied agreement for the construction, reconstruction, alteration, maintenance, moving, or demolition of any building, structure, or improvement, or relating to the excavation or other development of, or improvement to, land.
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"Direct contractor" means any person, including a construction manager, joint venture, or any combination thereof, along with the person's successors, that enters into a construction contract with an owner.
"Direct contractor" includes any officer, director, managing member, manager, or other individual who exercises substantial discretionary control over the finances, overall management, or employment policies and practices of the entity, regardless of ownership percentage.
"Fringe benefit contributions" means the amount of compensation that accompanies or is in addition to an employee's regular salary or wages including, but not limited to, payments made to profit-sharing plans, retirement or pension plans, medical insurance plans, severance pay plans, or holiday, vacation, or sick leave plans, but does not include the benefit payments from such plans.
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"Owner" means any person, firm, partnership, corporation, association, company, organization, or other entity or combination of any thereof, along with their successors, with an ownership interest, whether that interest or estate is in fee or is less than fee, including as vendee under a contract to purchase or as lessee, that causes:
A building, structure, or improvement, new or existing, to be constructed, reconstructed, erected, altered, remodeled, repaired, maintained, moved, or demolished; or
Land to be excavated or otherwise developed or improved.
"Owner" includes any officer, director, managing member, manager, or other individual who exercises substantial discretionary control over the finances, overall management, or employment policies and practices of the entity, regardless of ownership percentage.
"Owner" does not include:
An authorized local government, municipality, state, or state agency as defined in RCW 39.04.010; or
A tribe as defined under RCW 43.376.010.
"Reimbursements" means necessary expenditures or losses incurred by an employee in direct consequence of the discharge of their duties, including the cost of tools, equipment, personal protective equipment, or other materials required by the employer or by the nature of the work.
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"Subcontractor" means any person that is a party to an express or implied contract with a direct contractor, or with a direct contractor's subcontractors at any tier, to perform any portion of work within the scope of the direct contractor's construction contract with the owner, including a person that has no direct privity of contract with the direct contractor.
"Subcontractor" includes any officer, director, managing member, manager, or other individual who exercises substantial discretionary control over the finances, overall management, or employment policies and practices of the entity, regardless of ownership percentage.
An owner that enters into a construction contract with a direct contractor is jointly and severally liable with the direct contractor for any unpaid wages, including fringe benefit contributions, meal and rest periods, reimbursements, and damages, owed to any employee of the direct contractor and any employee of a subcontractor at any tier for labor performed on a project within the scope of the construction contract.
The employee, a third party on the employee's behalf, the attorney general, or the prosecuting attorney of any county may bring a civil action against an owner, a direct contractor, or a subcontractor in any court of competent jurisdiction to recover unpaid wages, including fringe benefit contributions, meal and rest periods, reimbursements, interest, penalties, double damages, noneconomic damages, attorney fees, expert witness fees, and costs incurred in connection with the action. "Penalties" and "double damages" under this section are mandatory and may be awarded regardless of whether the failure to pay wages was willful.
A civil action under this section to recover unpaid wages, including fringe benefit contributions, meal and rest periods, reimbursements, and damages, must commence within three years from the date on which the unpaid wages, including fringe benefit contributions, meal and rest periods, reimbursements, and damages, became due.
The attorney general's powers to enforce this chapter include the authority to:
Investigate violations of this chapter on its own initiative;
Investigate violations of this chapter in response to complaints and seek remedial relief for the complainant;
Educate the public about how to comply with this chapter;
Issue written civil investigative demands for pertinent documents, answers to written interrogatories, or oral testimony, as required to enforce this chapter;
Adopt rules implementing this chapter including rules specifying applicable penalties; and
Pursue administrative sanctions or a lawsuit in the courts for penalties, costs, and attorneys' fees.
Except as specified in subsection (10) of this section, any agreement to waive or release an owner or direct contractor from liability, or to indemnify an owner or direct contractor for liability assigned under this section, is invalid.
An owner or direct contractor may not avoid liability under this section by claiming that a person performing labor on a project within the scope of a construction contract is an independent contractor rather than an employee of a direct contractor or subcontractor, unless the person qualifies as an independent contractor under chapter 49.46 RCW.
In any action brought under this section, there is a rebuttable presumption that a person performing labor on a project within the scope of a construction contract is an employee. The party claiming otherwise may rebut the presumption by establishing that the person qualifies as an independent contractor under chapter 49.46 RCW.
Nothing in this section impairs:
The right of an owner or direct contractor to bring an action against a subcontractor to seek recovery of actual and liquidated damages for the amounts paid by the owner or direct contractor for unpaid wages, including fringe benefit contributions, meal and rest periods, reimbursements, interest, double damages, noneconomic damages, attorney fees, expert witness fees, and incurred costs associated with an action brought under this section;
The right of an owner to bring an action against a direct contractor to seek recovery of actual and liquidated damages for the amounts paid by the owner for unpaid wages, including fringe benefit contributions, meal and rest periods, reimbursements, interest, double damages, noneconomic damages, attorney fees, expert witness fees, and incurred costs associated with an action brought under this section.
Nothing in this section is intended to diminish the rights, privileges, or remedies of an employee under a collective bargaining agreement.
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A collective bargaining agreement may waive the requirements of this section if the agreement:
Is entered into by a bona fide building and construction trade labor organization that has established itself or its affiliates as the collective bargaining representative for persons performing work on a project;
Contains a grievance procedure that results in a final and binding decision;
May be used to recover unpaid wages on behalf of employees covered by the agreement; and
Provides for the collection of unpaid contributions to fringe benefit trust funds established pursuant to 29 U.S.C. Sec. 186 (c)(5) and (6), by or on behalf of such trust funds.
The waiver does not apply to an action brought on behalf of an employee not covered by such collective bargaining agreement.
An owner, direct contractor, or subcontractor may not intimidate, threaten, restrain, coerce, blacklist, discharge, or in any manner discriminate or retaliate against any employee who has:
Filed any complaint or instituted, or caused to be instituted, any proceeding under this section;
Testified or provided evidence, or who is about to testify or provide evidence, in any proceeding on behalf of themselves or another person regarding protections afforded under this section; or
Raised concerns in good faith about compliance with, or otherwise provided information regarding, legal rights and remedies available under this section.
Any effort to use a person's immigration status to negatively impact a worker's wage and hour rights, responsibilities, or participation in proceedings under this section constitutes intimidation, coercion, discrimination, or retaliation in violation of subsection (11) of this section.
Any violation of subsection (11) of this section entitles the employee, a third party acting on the employee's behalf, the attorney general, or the prosecuting attorney of any county to seek reinstatement, back pay, damages, attorney fees, and any other equitable relief deemed appropriate by the court.
If a direct contractor or subcontractor is found liable in a final judgment in a court of competent jurisdiction for a violation of this section, the department of labor and industries shall deny, suspend, or revoke the contractor's registration under chapter 18.27 RCW.
This chapter is in addition to and does not otherwise limit authority under federal, state, or local law.
Upon an owner's or direct contractor's request, any subcontractor with whom a direct contractor has entered into a contract to perform a portion of a construction project within the scope of a construction contract between the direct contractor and an owner must provide the following records to the owner or direct contractor:
Certified payroll reports that, at a minimum, include sufficient information for the direct contractor to determine whether a subcontractor has paid in full all wages earned by employees who performed work on the project as part of the employees' total compensation;
The name, address, and phone number of a contact for the subcontractor;
The names of all workers who performed work on the construction project and notation of whether each worker is classified as an employee or an independent contractor;
The names of any subcontractors with whom the first-tier subcontractor contracts;
The anticipated contract start date and scheduled duration of work;
An affidavit attesting to whether the subcontractor or any of its current principals has, within the preceding five years, been the subject of, or participated in, any civil, administrative, or criminal proceeding, investigation, citation, or settlement, that involved any allegations of a wage and hour violation under local, state, or federal law; and
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If a matter under (f) of this subsection (1) has concluded, the outcome, including any judgment, settlement, damages, fees, penalties, or amounts paid to workers or to a government agency; or
If a matter under (f) of this subsection (1) remains pending, a description of the status of the proceedings or investigation.
A subcontractor must provide the records described in subsection (1) of this section to a third party on the employee's behalf only to the extent that the information contained in the records pertains specifically to the employee on whose behalf the third party is acting and to whatever extent that the subcontractor would be lawfully required to disclose such records to the employee if the employee was acting on the employee's own behalf.
A subcontractor's compliance or failure to comply with a request under this section does not relieve the owner or direct contractor of the liability prescribed by section 3 of this act.
Nothing in this section alters an owner's or direct contractor's obligation to timely pay a subcontractor, except that an owner and direct contractor may:
Withhold payment to a subcontractor because of the subcontractor's failure to comply with the request for records under subsection (1) of this section; and
Withhold payment to a subcontractor if the direct contractor has paid wages, on behalf of the subcontractor, to the subcontractor's employees.
An owner, direct contractor, or subcontractor may not disclose personally identifying information about a worker who performs work on a construction project except as necessary to comply with section 3 of this act, or as permitted by state or federal law.
As used in this section, "principal" means a person, including an owner or a direct contractor, that commissions a construction project and that is responsible for the project's scope, standards, and objectives.
This chapter does not apply to construction contracts that relate to real property that is used as the owner's principal residence, or to real property consisting of five or fewer residential or commercial units on a single tract, as defined in RCW 84.04.130.
If a direct contractor or subcontractor is found liable in a final judgment in a court of competent jurisdiction for a violation of section 3 of this act, the department of labor and industries shall deny, suspend, or revoke the contractor's registration.