At midnighton April 29th, the Washington
legislature adjourned, pursuant to the Constitution’s limit of 105 days for the session this year. During the session, the legislature succeeded in adopting the three most important measures for the 2009-2011 biennium: the operating (general fund), capital and transportation budgets. In 2009, 2,584 bills were introduced, along with 1,783 amendments. Of these bills, 301 new laws were passed. Several of these new laws have a direct impact on
ABC members and the construction industry. Below is a brief summary of bills of particular interest to ABC members that passed the legislature and are now law.
Engrossed Substitute Senate Bill 5873: Apprenticeship Utilization
This bill requires public works contracts awarded by state four-year institutions of higher education to include apprentice utilization provisions. The apprentice utilization requirements are phased in over a three-year period. For all four-year institution of higher education, projects estimated to cost three million dollars or more, this bill requires ten percent of the labor hours be performed by apprentices.
For all projects estimated to cost two million dollars or more, 12 percent of the labor hours must be performed by apprentices. For projects estimated at one million dollars or more, 15 percent of the labor hours must be performed by apprentices.
A bidder on a public works project subject to apprenticeship utilization requirements will be disqualified if the bidder was found out of compliance in the one-year period preceding the date of the bid solicitation for working apprentices out of ratio, without appropriate supervision, or outside their approved work processes.
An additional violation is added to the list of violations for which a contractor can be barred from bidding on a public works contract if the contractor commits any combination of two violations in a five-year period.
The Washington State Apprentice and Training Council must adopt rules addressing due process protections for all parties and must strengthen the accountability for apprenticeship committees approved under chapter 49.04 RCW in enforcing the apprenticeship program standards adopted by the council. This law comes into effect
July 26, 2009.
Substitute Senate Bill 5613: Dept. of L&I Stop Work Orders
If the director of the Department of Labor and Industries determines after an investigation that a general or specialty contractor or a general or specialty electrical contractor has failed to secure payment of industrial insurance, this bill allows the director to issue a stop-work order against the employer.
A stop work order may be served on a worksite by posting a copy in a conspicuous location, in which case the order is effective as to the employer’s operations on that worksite. A stop-work order may be served on the employer, in which case the order is effective for all worksites which that the employer is found not in compliance. Business operations of the employer must cease immediately upon service. An employer who violates a stop-work order is subject to $1,000 penalty for each day not in compliance.
The stop-work order remains in effect until the director releases the order upon finding that the employer has come into compliance and all penalties have been paid, or the director issues an order of conditional release if the employer has complied with the coverage requirements and has agreed to pay penalties through a payment schedule. If the terms are not met, the stop-work order may be reissued.
The Department of Labor and Industries may adopt rules to carry out the provisions of this bill. It takes effect on
July 26, 2009.
Substitute House Bill 1402: Ex-parte Contacts
This bill restricts contact by employers, workers, and the Department of Labor and Industries with medical providers at specified stages after an appeal has been received in industrial insurance cases. After receipt of a notice of appeal, an employer may not have contact to discuss the issues in question in the appeal with any medical provider who examined or treated the worker unless the worker provides written authorization for the contact.
Contact is permitted for the ongoing management of the claim, including communication regarding the workers’ treatment needs and the provider’s treatment plan, vocational and return-to-work issues and assistance, and certification of the worker’s inability to work, unless these issues are in question in the appeal. This bill takes effect July 26, 2009.
House Bill 1195: Payment of Undisputed Claims
Contractors performing extra work on public works projects should bill the owner upon completion of such work. The public owner is now obligated to issue a change order for the amount of extra work within 30 days. If the owner disputes the amount of the extra work, the owner can no longer hold the entire amount due, but must instead pay the undisputed portion of the extra work invoice. If the owner fails to make prompt payment as required, the contractor is entitled to interest and likely, entitled to its attorneys’ fees in accordance with RCW 39.76.040 (the Prompt Payment Act). General contractors are similarly bound to pay their subcontractors and suppliers. This law comes into effect July 26, 2009.
Senate Bill 6173: Sales Tax Compliance/Seller’s Permit
The requirement for a resale certificate to make purchases for resale exempt of the sales tax is eliminated and replaced with a seller’s permit. The seller’s permit will be issued by the Department of Revenue to businesses registered with the Department of Revenue if the business makes wholesale purchases. Businesses that do not make wholesale purchases as part of their business will not be issued a seller’s permit.
In it’s original form, this bill required contractors and subcontractors to pay sales tax on their purchases of materials and services if they are going to be resold, and claim a credit against the sales and use taxes from the Department of Revenue.
This bill was amended so contractors no longer have to pay sales tax at the time of the purchase; instead, it requires a seller’s permit in order for construction contractors to make tax exempt wholesale purchases. This law comes into effect January 1, 2010.
Substitute Senate Bill 5042: Paperwork Violation Penalty Waiver
Agencies must waive fines, civil penalties or administrative sanctions for first time paperwork violations by small businesses under certain circumstances. A paperwork violation is defined as a failure to comply with any statute or regulation requiring an agency to collect data or a business to collect, post or retain data. In the event of a second violation or failure to correct the first violation, the agency may reinstate the previously waived penalty and impose a new penalty. Violations that present a direct danger to the public health, result in a loss of income or benefits to an employee, pose a potentially significant threat to human health or the environment, or cause serious harm to the public interest will not be waived. This law comes to effect July 26, 2009.
Substitute Senate Bill 5963: Unemployment Insurance Conformity
A state provision that governs the way unemployment benefits are paid and charged back to the employer was found to be out of conformity with federal unemployment laws. Benefits are charged to the employer based on the workers’ wages in all four quarters of the base year, not just the two quarters in which the claimant earned the most money, which is the system Washington uses. Under this system, the amount of benefits paid out doesn’t necessarily match the amount of benefits charged back to an employer. Federal law requires that unemployment tax rates reflect actual benefits paid. Unemployment insurance benefits are now charged back to employers in the same amount that benefits are paid out.
For more information on any of these bills, contact Vice President of Government & Labor Affairs Aran Buchan at (800) 640-7789, (425) 646-8000.