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Retainage release for public works contracts

Frequently Asked Questions

Q.

Who completes and files the Notice of Completion of Public Works Contract form?

A.

The awarding agency must fill out the Notice of Completion form and submit it. The form serves as a request for the Employment Security Department to review whether the contractor has any outstanding tax liabilities.


Q.

What is the difference between a Contractor Bid Letter and a Contractor Release of Retainage?

A.

Government entities can only accept bids for Public Works Contracts from bidders who have an Employment Security account number. Bidders and subcontractors must verify that they are registered with Employment Security and have an Employment Security account number before they begin the bidding process on a Public Works Contract. Potential bidders may request a letter to be sent to them electronically by clicking on the following link: Bid Letter or by faxing a request to 360-902-9287.

The Contractor Release of Retainage comes when a contractor completes a Public Works Contract. The public entity, awarding the contract will request permission to release funds by the Employment Security Department. The public entity must request permission by sending a copy of the Notice of Completion form. Services performed by a contractor under a Public Works Contract in the State of Washington must be investigated to determine if a liability to the Department exists. When the employer has paid their account in full, the Employment Security Department will issue a Certificate of Payment and Contribution, Penalties and Interest on Public Works Contract to the public entity and send a copy to the employer.


Q.

How should the Employment Security Department be notified?

A.

The awarding public entity sends the Notice of Completion directly to the Employment Security Department. There are three ways to submit this form. Email is the perferred is the preferred submission method.

Email the request to: publicworks@esd.wa.gov

Fax the request to: 360-902-9287

Mail the form to:

Employment Security Department
Tax and Wage Administration
Attn: Public Works
PO Box 9046
Olympia, WA 98507-9046


Q.

What forms does the Employment Security Department accept?

A.

The Department of Revenue, Labor and Industries and The Employment Security Department will accept the approved forms that are published on the Labor and Industries website located at http://www.lni.wa.gov/FormPub/Detail.asp?DocID=2404.


Q.

What does the Employment Security Department do with the requests?

A.

The Employment Security Department verifies that all unemployment insurance taxes have been paid by the contractor. If the taxes have been paid by the contractor, we authorize release of retainage. If taxes are not properly reported or paid, we may contact the contractor directly for collection and possibly the awarding entity of the contractor fails to respond.


Q.

Does the Employment Security Department require a Request for Release on all Public Works Projects?

A.

Due to a change in the law, effective July 26, 2009, public entities must submit a request for release of retainage from the Employment Security Department on public works contracts over $35,000.

Public entities may choose to request a release of funds on a contract between $20,000 and $35,000 from Employment Security. Employment Security will process their request but public entities are not required to submit the request for these smaller projects.

Employment Security can request payment out of the retained funds on a Public Works Contract between $20,000 and $35,000, if we know of the contract and there is a balance due during the project period.

For more information, please see RCW 60.28.040(3) and RCW 60.28.051


Q.

When should the Notice of Completion form be submitted?

A.

After completion of all work on the contract and the public entity has issued a notice of final acceptance.


Q.

When can the public entity release retainage?

A.

After the public entity has received approval to release retainage from Department of Revenue, Department of Labor and Industries and the Employment Security Department. The public entity must also ensure that they have on file an approved Affidavit of Wages paid for the contractor and every subcontractor listed on the Public Works contract.


Q.

What things are most likely to cause a delay in obtaining the release from the Employment Security Department?

A.

Failure to pay unemployment insurance taxes may cause a delay.

Another common reason for delay is when work for a public works contract is completed in the current quarter and the current quarter’s report and taxes are not yet due. The agency must ensure the taxes have been paid during the period of the contract. We cannot send authorization to release funds until the employer has filed all of their tax reports and paid all of their taxes during the contract period. The employer can help us by filing their tax reports and paying their taxes as soon as the quarter ends.




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