Liability for Double Damages
In Washington State, employers can be liable for double damages when they fail to pay their employees, whether you’re an employer or employee, it is important to know if the employer is liable for double damages as it can fundamentally alter the amount of damages in the matter.
Under RCW 49.52.070, employers are generally liable for double damages in wage and hour disputes. There are two exemptions to the willfulness element of the double damages provision of RCW 49.52.070 for wage and hour dispute; firstly, that the employer was not willful if the failure to make the payment was because “the employer was careless or erred in failing to pay, or [secondly] a ‘bona fide’ dispute existed between the employer and employee regarding the payment of wages.” Morgan v. Kingen, 166 Wn.2d 526, 534, 210 P.3d 995, 998 (2009), (citing Schilling v. Radio Holdings, 136 Wash.2d 152, 160, 961 P.2d 371 (1988)). Whether or not an act was willful or is exempt is a fact determination. Zimmerman v. W8LESS Products, LLC, 160 Wn. App. 678, 695, 248 P.3d 601, 609 (2011).
An employer is merely careless and therefore not willful, when their failure to make the payment is the result of “errors in bookkeeping or other conduct of an accidental character.” Allen v. Dameron, 187 Wn.2d 692, 709, 389 P.3d 487, 495 (2017)709 (citing Schilling, 136 Wn.2d at 161). Additionally, courts will examine whether the employer “knows what he is doing, intends to do what he is doing, and is a free agent” Morrison v. Basin Asphalt Co., 131 Wn. App. 158, 163, 127 P.3d 1, 2 (2005) (quotations omitted) (citing Flower v. T.R.A. Indus., 127 Wash.App. 13, 37, 111 P.3d 1192 (2005)).
Courts use a two-part test for establishing whether or not an employer has a bona fide wage and hour dispute which negates the willfulness element of the double-damages provision of RCW 49.52.070, firstly whether the employer has a subjective belief that there is a dispute (this is fact determination generally reviewed under a substantive evidence standard), and secondly whether there is an objective “fairly debatable” element present which is a legal question focusing on the “reasonableness or frivolousness of an argument.” Hill v. Garda CL Nw., Inc., 191 Wn.2d 553, 562, 424 P.3d 207, 212 (2018) (quotations and citations omitted); Schilling,136 Wash.2d at 167 (Alexander, J., dissenting); Pope v. Univ. of Washington, 121 Wn.2d 479, 490, 852 P.2d 1055, 1061 (1993); Lillig v. Becton-Dickinson, 105 Wash.2d 653, 660, 717 P.2d 1371 (1986). Whether or not a bona fide dispute exists is a question of fact, “[b]ut where reasonable minds could not differ, the court may decide the question as a matter of law.” Moore v. Blue Frog Mobile, Inc., 153 Wn. App. 1, 8, 221 P.3d 913, 916 (2009) (citing Dice v. City of Montesano, 131 Wash.App. 675, 687–88, 128 P.3d 1253 (2006)).
Delays in payment may give rise to employer liability under 49.52.070 (WRA), if it exceeds the timeframe set forth in WAC 296-128-035 or other related WACs, however it is still conditioned on the delayed payment being a willful withholding. Champagne v. Thurston Cnty., 163 Wn.2d 69, 73, 178 P.3d 936, 939 (2008). Delays of payment do not themselves constitute or indicate willfulness. Clairmont v. Genuity Inc., C02-1876L, 2005 WL 8172671, at *6 (W.D. Wash. Mar. 24, 2005) (unreported). In Allstot, the court held that the if the employer “could have determined” sooner that the employee was owed delayed (unpaid) wages, “then delaying payment of that amount for four years might indicate willful withholding of wages.” Allstot v. Edwards, 114 Wn. App. 625, 635, 60 P.3d 601, 605 (2002). In Brandt, the court held that because the employer allowed a “substantial portion” of the employee’s wages to “accumulate unpaid” for three years, and that there was sufficient evidence that the employer never attempted to remedy this issue resulting in a falsified W2, the delayed payments were indicative of willfulness. Brandt v. Impero, 1 Wn. App. 678, 680-81, 463 P.2d 197, 198-99 (1969).
Employers’ continuous and repeated delays in payment to employees have been upheld as a result of carelessness. Taber v. Cascade Designs, Inc., 2:20-CV-01633-TL, 2023 WL 8543702, at *8 (W.D. Wash. Dec. 11, 2023) (currently unreported, but Westlaw indicates it will be reported). In Taber, the court held that Defendant presented sufficient evidence to defeat the Plaintiff’s motion for summary judgment. Id. The Defendant had failed to pay the Plaintiff on time at 16 separate occasions over a four-month period “including four times after learning [Defendant] was withholding [Plaintiff’s] wages, and [Defendant] did not make any reimbursement payments until nine months after the first failure.” Id. However, the court denied the Plaintiff’s motion for summary judgment because a reasonable jury could believe Defendant’s explanation that “[T]he delay in transferring the HSA contributions to [Plaintiff's] HSA was inadvertent and caused by administrative and banking problems.” Id.
The Supreme Court of Washington has affirmed that as a matter of law, there cannot be a willful withholding, and a bona fide dispute exists, if the employer withholds wages to offset a debt owed by the employee. Allstot, 114 Wn. App. at 634 (citing Pope, 121 Wn.2d at 490) (holding there was no willful withholding because the University of Washington withheld social security deductions (wages) to pay the government on behalf of the employee); See Cameron v. Neon Sky, Inc., 41 Wn. App. 219, 222, 703 P.2d 315, 317 (1985), rev. denied, 104 Wash.2d 1026 (1985) (holding there was no willful withholding because the employer had been overpaying the employee – which the employee acknowledged – and the employer was therefore withholding wages to offset the debt owed by the employee); See Toliver v. Convenient Physicians Servs., 107 Wn. App. 1044 (2001) (unreported) (holding there was no willful withholding because the employer withheld wages to offset the employee’s debt to the employer).
Courts find no bona fide dispute where the employers refuse to comply with courts orders, make allegations without evidence, lack the funds to pay employees, or have a consensus that the withheld payments are properly owed. See Cronin v. Cent. Valley Sch. Dist., 12 Wn. App. 2d 123, 132, 456 P.3d 857, 861 (2020) (court rejected employers bona fide dispute when the employer refused to comply with court ordered payments), See Failla v. FixtureOne Corp., 181 Wn.2d 642, 657, 336 P.3d 1112, 1119 (2014) (court rejected employers bona fide dispute because the employer disputed the amount of commission payments owed to the employee without evidence), See Schilling, 136 Wash.2d at 160 (court rejected employers bona fide dispute because the employer lacked the funds to pay the employee), See Duncan v. Alaska USA Fed. Credit Union, Inc., 148 Wn. App. 52, 81, 199 P.3d 991, 1005 (2008) (court rejected employers bona fide dispute justification because the employee has provided evidence of consensus amongst the employer executives regarding their duty to pay the withheld wages).