Since 2009, for public work projects costing $35,000 or more, the law has required public agencies to withhold 5% of the contract amount until it is demonstrated that all the contractors on the project have paid the appropriate prevailing wages and state taxes, including workers’ compensation and unemployment insurance premiums. The state Department of Revenue (DOR), Employment Security Department (ESD), and L&I all approve release of the retainage separately.
The Contract Release Unit with L&I reviews these contracts to ensure all contractors on the project have paid the appropriate premiums for worker’s compensation. Once the project is final, the public agency involved must file a Notice of Completion (NOC) with L&I, DOR, and ESD for all projects costing $35,000 or more, less taxes.
We use the Affidavit of Wages Paid submitted by the contractors as a tool to verify the type of work performed and how many hours were worked on the project. We work with the contactors to resolve any issues as quickly as possible. Once all contactors are cleared, we then issue our Certificate of Release to the public entity as well as the general contractor for the contract to release our hold on the retainage. (For more information see Background)
Program Changes Effective April 1, 2013
If all of the affidavits are not listed on the NOC, the NOC will be returned to the public agency.
Previously, if L&I received a NOC and could not find an Affidavit of Wages Paid on file for all contractors, L&I would attempt to reach the contractors and remind them to file. This time-consuming effort caused significant delays for other customers.
In an effort to speed the process, L&I will change its practice on April 1, 2013, and return any NOC that does not list all corresponding affidavit numbers for the project. L&I will notify the public agency and provide information as to what the problem is, how to resubmit the NOC, and request they inform the general contractor of the issue.
Download the latest version of the Notice of Completion.
Questions?
Please review our list of Frequently Asked Questions. If
you still have questions, please contact L&I directly:
Phone: 360-902-5772
Email: ContractRelease@Lni.wa.gov
The 2009 Washington State Legislature added industrial insurance to the retainage and release laws for public works projects (HB 1555). The change was made to help combat the serious impacts of the underground construction economy.
RCW 60.28.011 allows L&I to collect industrial insurance debt owed by contractors who are working on public works projects valued over $35,000. Enforcement by L&I began October 1, 2009.
Contractors are already required to file an Affidavit of Wages Paid when work on a public improvement contract is complete. The Affidavit is a significant source of information for the contract release function. The Affidavit shows the hours worked and wages paid, by occupation, on the contract. Addendum B to the Affidavit also lists all subcontractors. Thus, the General Contractor’s Affidavit lists all subcontractors with whom the general contractor contracted. Any Affidavits filed by the first level subcontractor lists any second level subcontractors with whom they contracted, and so on. The public entity cannot release retainage without an approved Affidavit from all contractors involved with the project.
By law, public agencies must now also withhold final payment (or retainage) on a public works contract until they receive proof that all taxes and industrial insurance premiums due for the work have been paid.
Public agencies must not pay any retained funds to the contractor without an approved release from the Department of Labor & Industries (L&I) Industrial Insurance Program. (Contracts less than $35,000 are excluded from this requirement.)
NOTE: The prevailing wage Affidavit of Wages Paid form continues to be required from all contractors and subcontractors prior to release of project retainage. See RCW 39.12.040.
When the awarding agency receives L&I’s Industrial Insurance Program approved release (in conjunction with the approvals from the Department of Revenue [DOR] and the Employment Security Department [ESD]), and all the prevailing wage Affidavit of Wages Paid requirements of RCW 39.12.040 have been met, they may pay retained funds according to the instructions provided by each approving agency, L&I included.
Questions?
Please review our list of Frequently Asked Questions. If you still have questions, please contact L&I directly:
Phone: 360-902-5772
Email: ContractRelease@Lni.wa.gov
Requests for L&I’s approval for release of retained funds
Immediately after acceptance of work, complete L&I form, “Notice of Completion of Public Works Contract” [F215-038-000] and submit it to L&I for review and approval. The form is also available in multiple formats.
Department of Labor & Industries
Contract Release
PO Box 44274
Olympia, WA 98504-4274
Fax
360-902-6897
Can we complete this process online?
Not yet. For now, L&I will review the printed forms manually. An effort is underway to create an online process that will make it easier for you to do business with all the approving state agencies for retainage release. When the online process is ready, access will be provided via this web page.
Questions?
Please review our list of Frequently Asked Questions. If you still have questions, please contact L&I directly:Phone: 360-902-5772
Email: ContractRelease@Lni.wa.gov
Resources
Public Works Basics – Prevailing Wage
Find out what a "public works" job is, what "prevailing wages" are and how they are determined. Also, learn about filing requirements, contract amount and when to file Intents and Affidavits for paying prevailing wage on public works projects.
Workers' Compensation Basics – Register and Report
What is workers' compensation (industrial insurance) and how do you get signed up for it? What do you have to pay and how is it calculated?
Awarding Agencies
Information for agencies awarding contracts for public works projects. File Intents and Affidavits or view approved Intents and Affidavits posted here on the Internet for public agencies, contractors, and the general public to view and print.
Contractor Information
What are the responsibilities of contractors who perform work that requires a contractor license?
Questions?
Please review our list of Frequently Asked Questions. If you still have questions, please contact L&I directly:
Phone: 360-902-5772
Email: ContractRelease@Lni.wa.gov
