Although federal contractors were able to breathe a sigh of relief after the current administration put a stop to President Obama’s “Blacklisting” executive order, employers in the state of Washington must now comply with their own “blacklisting” law. On May 8, Washington state signed into law Senate Bill 5301 (“SB 5301”), which bans employers from competing for state and local contracts if they have “willfully” violated select wage statutes in the past three years. Employers with such violations are deemed not to be “responsible bidders” and are disqualified from obtaining public works projects. SB 5301 passed with bi-partisan support.
The good news for Washington employers is that this law lacks many of the problematic elements contained in the more ambitious executive order. For example, SB 5301 requires employers to report willful violations of only three statutes, commonly known as Washington’s “wage theft” statutes (Revised Code of Washington §§ 49.46, 49.48, and 49.52). The executive order, however, required that federal contractors report violations of more than 14 different federal labor and safety laws, as well as their state equivalents.
A significant issue with the executive order—and one of its most controversial elements—was that it required federal contractors to report even mere allegations of misconduct. This requirement drew concern from a federal judge who stated that the executive order would disqualify contractors based on “nothing more than allegations of fault asserted by agency employees.” In contrast, SB 5301 only requires employers to report on actual findings of willful violations, made by either a court or the state Department of Labor and Industries. Employers must report any violations within the three-year period prior to the date of the bid solicitation.
If you are an employer hoping to obtain state and local contracts in Washington, now is a good time to review your payroll practices and your compliance with Washington’s wage theft statutes, which include Washington’s paid sick leave policy. Employers in the neighboring state of Oregon should also be aware of SB 5301 because it is not uncommon for these two states to follow one another when it comes to employment legislation.