The Industrial Welfare Act and Local Governments

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On May 20, Governor Locke signed SHB 6054 (Chapter 401, Laws of 2003), which, because it contains an emergency clause, takes effect immediately. This bill clarifies that most sections of the "Industrial Welfare Act" ("Act"), chapter 49.12 RCW, were not intended to apply to public employers, relieving the state and local governments of potential liability for additional wages for meal and break periods over the last three years (the applicable statute of limitations). However, under this legislation, public employers will in the future be subject to the Act, unless one of the three exceptions discussed below apply.

The purpose of this article is to outline the reasons why this legislation came about, explain the provisions of the Industrial Welfare Act that now may apply to local governments, and provide guidance to cities and counties on complying with the new law.

Why was this legislation needed?

The state and its political subdivisions had long understood that the meal and break period provisions of the Industrial Welfare Act did not apply to public sector employers. However, recent court decisions called this interpretation into question.

The state is currently facing two major class action lawsuits challenging the "straight eight" work shifts traditionally used by the institutional staffs of the Department of Social and Health Services and the Department of Corrections. Even though these employees collectively bargained to work straight eight-hour shifts, without designated rest and meal periods, instead of a nine-hour shift that includes designated break times, the lawsuits claim the employees were denied their statutory rest and meal periods guaranteed in chapter 49.12 RCW and WAC 296-126-092. The state argued, among other things, that the Industrial Welfare Act, including the WAC regulations on meal and break periods, did not apply to public employers. The trial court rejected this argument, finding that the state was not excluded from these regulations. The state appealed this decision to state court of appeals, and that appeal is pending. With just these two cases, the state faces $229 million in back pay liability. Additional litigation is pending, including a recent suit filed by Snohomish County corrections officers.

This unexpected judgment forced the legislature to take immediate action to clarify that most of the provisions of the Industrial Welfare Act were not intended to apply to the state and local governments. Of utmost concern to legislators and state and local policy makers was the potential for significant liability if the cases against the state were upheld. That could have opened up the floodgates of litigation - any public employer whose practices, policies, or collective bargaining agreement language did not conform exactly to the wording of WAC 296-126-092 could have been subject to liability for back overtime pay for meal and break periods.

As originally introduced, SHB 6054 simply stated that most provisions of the Act did not apply to public employers. Labor interests succeeded in having the bill amended so that the Act will apply to the state and to local governments in the future, though language was also added to ensure that employers and employees could agree to meal and break period provisions that varied from those specified in WAC 296-126-092. This legislation should serve to relieve public employers from potentially significant liability for back pay for rest and meal periods.

What are the major provisions of the Industrial Welfare Act that now apply to local governments?

Previously, only a few of the provisions of this Act, contained in chapter 49.12 RCW and implemented by Department of Labor and Industry (L&I) regulations in chapters 296-125 and 296-126 WAC, applied to local governments. Those provisions that had previously applied are the rules regarding sick leave to care for family members (RCW 49.12.270-.295), parental leave (RCW 49.12.350-.370), compensation for required employee apparel (RCW 49.12.450), and employer duties relating to volunteer fire fighters (RCW 49.12.460).

The major provisions of the Act now additionally apply to local governments can be summarized as follows:

Requirements concerning rest and meal periods;
Restrictions concerning the employment of minors, including the requirement that employers obtain minor work permits;
Requirements concerning employee access to their personnel records.

Note that the Fair Labor Standards Act (FLSA) has rules regulating the employment of minors that apply to local governments, but these vary somewhat from the state rules and do not include a minor work permit requirement. Where the rules under the FLSA and the state Industrial Welfare Act differ, the most stringent ones should be applied.

WAC 296-126-080 requires that employers post in each work site a current copy of the L&I regulations "in a form provided by the department." This form provides a good summary of the Industrial Welfare Act implementing regulations.

The Industrial Welfare Act also contains other requirements and standards that may perhaps be considered "minor" in comparison to the above requirements. These include certain recordkeeping requirements (RCW 49.12.050 and WAC 296-126-050), which are essentially identical with requirements under the Minimum Wage Act, and a prohibition on wage discrimination based on sex (RCW 49.12.175), which is also prohibited by the law against discrimination, specifically RCW 49.60.180(3).

What exceptions are provided in the new legislation?

The new legislation provides two basic exceptions, although one applies only to the rest and meal period rules. First, the provisions of the Industrial Welfare Act that now apply as a result of SSB 6054 do not apply to the extent they conflict with "any local resolution, ordinance, or rule" adopted by a local legislative body before April 1, 2003. So, if a city council or board of county commissioners or county council had in place by April 1 personnel policies addressing employee access to their personnel files or rest and meal periods that are different than what is contained in chapter 49.12 RCW and L&I's implementing regulations in chapters 296-125 and 296-126 WAC, that local policy would control. It is unlikely, however, that a city or county has in place any rules regarding employment of minors, as this is already regulated by federal law in the FLSA.

The other exception, limited to the rules adopted by L&I concerning rest and meal periods, allows public employers to vary from or supersede those rules in collective bargaining agreements or in "other mutually agreed to employment agreements." This exception will be discussed further below.

What are the requirements for rest and meals periods that now apply to local governments?

These requirements, of the provisions of the Industrial Welfare Act that now apply as a result of SHB 6054, have potentially the greatest significance for local governments. They are adopted by L&I under the authority given to it by the Industrial Welfare Act and are stated in WAC 296-126-092 as follows:

WAC 296-126-092 Meal periods -- Rest periods. (1) Employees shall be allowed a meal period of at least 30 minutes which commences no less than two hours nor more than five hours from the beginning of the shift. Meal periods shall be on the employer's time when the employee is required by the employer to remain on duty on the premises or at a prescribed work site in the interest of the employer.
(2) No employee shall be required to work more than five consecutive hours without a meal period.
(3) Employees working three or more hours longer than a normal work day shall be allowed at least one 30-minute meal period prior to or during the overtime period.
(4) Employees shall be allowed a rest period of not less than 10 minutes, on the employer's time, for each 4 hours of working time. Rest periods shall be scheduled as near as possible to the midpoint of the work period. No employee shall be required to work more than three hours without a rest period.
(5) Where the nature of the work allows employees to take intermittent rest periods equivalent to 10 minutes for each 4 hours worked, scheduled rest periods are not required. (Emphasis added.)

To evaluate the impact of these requirements, take a look at your work force, your working conditions, etc. If your operations would not be impacted by following the WAC language (or if you already follow it), then you need do nothing other than to inform employees about the rest and meal period requirements and, of course, to allow them those periods. Keep in mind that paragraph 5 above makes it very clear that scheduled rest periods are not required if employees are allowed to take intermittent rest periods throughout the work day. This is likely the case with most of your office employees, and probably your field employees as well.

Section 3 of SHB 6054 provides for an exception to the rest and meal period requirements:

Employees of public employers may enter into collective bargaining contracts, labor/management agreements, or other mutually agreed to employment agreements that specifically vary from or supersede, in part or in total, rules adopted under this chapter regarding appropriate rest and meal periods.

If you have already bargained meal and rest period provisions with your unionized employees, then this bill will have little impact on you. If your bargaining agreements are silent on the issue, your unionized employees may want to bargain new provisions that differ from the requirements in WAC 296-126-092.

What about management and non-represented employees? Again, if you are content to comply with the provisions of the WACs for these employees, you need take no further action other than to ensure compliance. However, if you want to implement different meal and rest period provisions for non-represented employees, the bill requires a "mutually agreed to employment agreement." AWC has heard that the state intends to have all non-represented employees (including supervisors and managers) sign individual employment agreements regarding meal and break periods. This seems quite cumbersome, but would certainly satisfy the requirement in the legislation.

"Mutually agreed to" is not defined in the bill, and there is no requirement that the employment agreement be in writing. There is a school of thought that continuing to work under the employer's existing meal and rest period policies constitutes "agreement" with the provisions. Written acknowledgment of receipt of personnel policies outlining meal and break provisions might also satisfy the requirement. Obviously, the cautious approach would be to obtain written agreements with each employee. You should consult with your own legal counsel before making a decision on how to proceed.

What are the state rules regarding employment of minors?

When employing a minor (a person under 18 years of age), a local government employer must now obtain from L&I a minor work permit. See RCW 49.12.121. The Department of Labor and Industries implements this requirement through a simplified process adopted in 1999 that requires a minor work permit endorsement on an employer's Master Business License and also individual parent/school authorization forms. See chapter 296-125 WAC.

The Department of Labor and Industries also has rules restricting the hours a minor may work (WAC 296-027), identifying what jobs are prohibited for minors (WAC 296-125-030 and WAC 296-125-033), and concerning rest and meal periods for minors that are different from those that apply to other employees (WAC 296-125-0285 and WAC 296-125). There are separate rules for 14 and 15-year olds and for 16 and 17-year olds. Minors under 14 may not be employed.

Cities and counties that have employed minors should already be familiar with the FLSA requirements, which are, for the most part, the same as those under L&I regulations. See 29 C.F.R. Part 570 (Child labor regulations, orders, and statements of interpretation).

The following on-line resources on this issue are available from L&I:

What are the requirements concerning employee access to their personnel records?

The Industrial Welfare Act gives employees certain rights regarding inspection of their personnel files and correction of those files, and these rights are now extended to public employees under SSB 6054. RCW 49.12.240 gives employees the right to inspect their own personnel files at least annually, and RCW 49.12.250 gives them the right to request their employer to determine if there is any "irrelevant or erroneous information" in their personnel files and to remove such information. It also gives employees the right to include in their files a statement of "rebuttal or correction" regarding the employer's determination. See L&I Administrative Policy - ES.C.7 (Employee Access to Personnel File).

The requirement that the employer, upon request, remove information from personnel files it determines to be "irrelevant or erroneous" may cause a problem for local government employers who are subject to state records retention requirements that prohibit the destruction of public records within certain specified time periods. See Local Government General Records Retention Schedules. So, it may be that irrelevant or erroneous information contained in records that are removed from an employee's personnel file must be kept elsewhere and not destroyed until expiration of the applicable retention period.

What are the penalties for violation of the Industrial Welfare Act?

The Department of Labor and Industries has enforcement authority with respect to compliance with the Industrial Welfare Act.

Serious or repeated violations of the child labor laws will subject an employer to a civil penalty up to $1000 for each day the violation continues. An employer will be given a reasonable time, without penalty, to correct a violation of the minor work permit rules. Also, L&I may establish a specific period of time for abatement of "nonserious violations" of the child labor laws in lieu of a penalty for first time violations. See RCW 49.12.390. An employer who "knowingly or recklessly" violates the child labor laws is guilty of a gross misdemeanor. RCW 49.12.410.

Violations of other standards established under the Act is a misdemeanor punishable by a fine of $25 to $1000. RCW 49.12.170.