Following the recommendations by the Wage Recovery Workgroup, created in 2024, the Legislature has created a Wage Recovery Account and Wage Recovery Program (HB 2479) under the Department of Labor & Industries (L&I). All civil penalties collected by L&I will go into the new account instead of the Supplemental Pension Account. Funds in the account will then be disbursed by the Wage Recovery Program to supplement low-wage employees who would suffer immediate economic harm from nonpayment during the period L&I works to rectify the wage violation and collect penalties.

The program will start account disbursements beginning July 1, 2028, or when the account reaches $130,000, whichever is later. Eligible employees may receive up to 85% of anticipated wages owed, capped at $2,500.

The bill grants L&I discretion in determining when to waive or reduce penalties in certain circumstances and when disbursement of account funds is needed based on the bill’s outlined criteria.

In cases of willful violations, L&I may seek civil penalties. The existing penalty cap of $20,000 has been repealed. Instead, L&I may collect penalties up to the total amount of unpaid wages plus interest owed to the employee.