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26 Aug

August 2021 Washington HR Legal Updates

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Washington’s Wage Recovery Act Passed to Include Statutory Wage Liens on Unpaid Wages

Update Applicable to:
All employers in Washington.

What happened?
On April 16, 2021, Governor Inslee signed Senate Bill 5355 (SB 5355) into law.

What are the details?
Effective January 1, 2022, employees will be able to place a lien on their employers’ property to secure unpaid wages while they wait for a resolution on their unpaid wage claims.

These wage liens can be placed on property owned or subsequently acquired by the employer. This includes:

  • Real property in the state.
  • Goods and tangible chattel paper (i.e., records establishing a monetary obligation or security interests) in the state.
  • Accounts and payment intangibles. Only property in the state of Washington is subject to a lien, but employers or property owners do not need to be located in Washington for the lien to attach.

Specifically for willful violations, the property can include the real property and personal property of any officer, vice-principal, or agent. The lien could also apply to the property of those individuals’ spouses, domestic partners, and heirs.

If an employer or owner believes that the wage claim is frivolous and made without reasonable cause or clearly excessive, the party can file a motion in court directing the employee to appear before the court to show cause as to why the requested relief should not be granted. In addition, employers cannot require their employees to waive their rights to obtain a wage lien in any employment contracts or agreements.

The law can be read here.

An article on the new law can be found here.

What do employers need to do?
Employers should review the law in order to familiarize themselves with it prior to it going into effect so that they are aware of the process and what it provides. The law firm, Perkins Coie LLP, encourages employers to review the law as it has specific provisions setting out procedures on how to foreclose on a lien, the priority a wage lien is given over other types of liens, and form notices of wage liens.