Form revised: December 14, 2010

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	CBO Analyst/Phone:
Legislative	Nate Van Duzer/206-684-8806	N/A

Legislation Title: AN ORDINANCE relating to wage theft; amending Seattle Municipal Code sections 5.55.230 and 12A.08.060; clarifying the definition of theft as it relates to theft of wages; providing a list of circumstances that may be considered in determining whether a person intends to commit wage theft; clarifying the City’s jurisdiction in such cases; and allowing the City to refuse to issue, revoke, or refuse to renew business licenses from employers found guilty of wage theft.

Summary of the Legislation:

The ordinance would add the following elements to the Seattle Municipal Code:

• Under SMC 12A.08.060 (Theft), a new subsection (A4) clarifies that knowingly securing services for payment and intentionally avoiding full payment for these services is an element of the crime of theft, a gross misdemeanor.
  
  
• A list of specific circumstances is added to the SMC that may be considered in determining whether a defendant intended to commit wage theft. Similar lists of circumstances are used in the SMC sections for prostitution loitering (12A.10.010) and drug-traffic loitering (12A.20.050).
  
  
• An additional clarification is added to the SMC so that it is clear that wage theft can occur either at the place where the agreement for service was made or at the location where the services are performed, a change necessary to make the City law applicable in those cases where an offer of employment is made and accepted inside the city limits of Seattle yet the work is performed outside the City, or vice versa.
  
  
• Under SMC 5.55.230 (Business licenses), the City’s Director of Finance and Administrative Services would be empowered to refuse to issue, revoke or withhold a Seattle business license to individuals who
  
  
• are convicted of wage theft under new section 12A.08.060A4, or
• are subject to a final and binding citation and notice of assessment for wage violations from the State Department of Labor and Industries AND have not satisfied the judgment within 30 days, or
• have been assessed civil liability by a court under Washington state wage laws in RCW 49.46, 49.48 or 49.52 AND have not satisfied the judgment within 30 days.

Background:

In Washington State, claims of wage theft are handled under the civil processes of the State Department of Labor and Industries. While many citations are issued for violations of state wage laws and regulations and 615 sustained claims sent to collections in fiscal year 2009, the department lacks sufficient resources to actively collect lost wages on behalf of victimized workers. If employers do not pay voluntarily, they often never pay. Improvements to state law and processes were adopted in 2010, but these changes, while certainly appropriate, have not changed the reality for many of the workers who are taken advantage of by their employer. The problem of wage theft is significant enough to warrant enhanced City efforts to recover wages for these workers and to deter other employers from committing wage theft.

Please check one of the following:

_X _ This legislation does not have any financial implications.

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It is expected that any criminal enforcement and prosecutions under the amended law would be handled within existing resources.

____    This legislation has financial implications. (Please complete all relevant sections that follow.)