On April 16th, 2021, Washington State signed into law the Washington Wage Recovery Act. This law enables employees the opportunity to place a lien upon their employer’s properties to secure unpaid wages from the business. This law gives power back to the employee in the time between filing a wage lien and awaiting resolution to their unpaid wages.
What is the Washington Wage Recovery Act?
Senate Bill 5355, commonly referred to as the Washington Wage Recovery Act, allows employees to put a lien on their employer’s property so they may pursue their unpaid wages. A lien is a claim against assets that you can use as collateral to repay a debt. This act allows employees to hold a security interest in the employer’s property while pursuing a proper legal resolution.
Wage Claims Subject to Wage Liens
In Washington, an employee can obtain a wage lien for unpaid wages and other compensation. These include:
- Interest
- Statutory damages
- Liquidated damages
- Attorney’s fees and costs
- Statutory penalties from a violation of a local, state, or federal wage law
However, there are limitations to what you can use as cause for a wage lien. Vacation pay, severance pay, contributions to a benefits plan, and paid leave outside of what is statutorily mandated are not eligible compensations that you can pursue through a wage lien.
Employees Eligible for a Wage Lien
Whether they are currently employed or formerly employed, almost any employee can make a wage lien against their employer. However, there is an exception to who may establish a lien. If an employee meets any of the criteria below, they are not eligible for establishing a wage lien:
- Has received indexed compensation over 130,000
- Owns at least 5% of the business
Property Subject to a Wage Lien
Properties owned or acquired by your employer may be subject to wage liens in Washington. These properties include:
- Real property in the state
- Goods and tangible chattel paper
- Accounts and payments intangibles
Your employer does not need to be located in Washington for you to obtain a lien on their property, but the physical property to which the lien will be applied must be located in the state of Washington. The following properties are not subject to a wage lien:
- Real property of the state
- Public entities
- Personal property
Exceptions of Who Can Establish a Wage Lien
Highly compensated employees are not eligible for establishing wage liens upon their employers. These employees are defined as employees who own at least 5% of the business or have received indexed compensation over $130,000. The threshold for indexed compensation is defined by the U.S Treasury Department and changes annually. As of 2021, the indexed compensation is $130,000.
Procedure for Recording a Wage Lien
This new statute for establishing wage liens outlines a detailed procedure for recording these liens. First, you must file a wage lien within two years of when the wage was due.
If you place the wage lien is upon real property:
- You must file a notice of the wage lien in the county where the property is located
- You must pay a filing fee
- You must notify the employer or property owner via mail with a copy of the notice
If the wage lien is for personal property and goods:
- You must file a notice with the Department of Licensing
- You must pay a filing fee
- You must notify your employer with a copy of the notice
Any actions upon these wage liens have an eight-month window after filing for you to act upon, after which the lien will be extinguished.
Seek Professional Help from Wage Theft Lawyers
Inevitably with a new law, it is uncharted territory, and there are complexities to it. If you believe you are owed wages and want to establish a wage lien against your employer, it’s in your best interest to speak to a lawyer first. An experienced attorney can walk you through determining your eligibility, quantifying your owed wages, and establishing the lien.
The experienced Seattle Employment attorneys at Rekhi & Wolk can help you navigate this new statute and establish a wage lien upon your employer’s property. Call us today at 206-388-5887 to discuss your case.