A bill that would increase penalties for employers engaged in wage theft passed the state Legislature last week.

The legislation strengthens Washington’s wage theft laws regarding “prevailing wage,” which is most common in government contracts. Prevailing wage laws prevent a “race to the bottom” as contractors seek to lower worker pay in order to underbid each other, according to the state attorney general’s office, which requested the legislation.

The Senate passed the legislation March 1 with a vote of 40-7. The House passed the legislation 59-36 on April 10, with minor changes, and the Senate agreed to the changes with a 34-15 vote on April 19.

The legislation increases the maximum penalty for prevailing wage violations from the greater of $1,000 or 20 percent of the violation, to the greater of $5,000 or 50 percent of the violation. The penalties have not increased since 1985. The legislation would also ensure employees who experience wage theft receive at least 1 percent monthly interest in addition to the stolen wages.

The legislation also addresses what the attorney general’s office describes as a “major loophole” that allows “repeat and willful violators” to avoid paying a penalty or receiving a sanction if they return an employee’s stolen pay after a wage complaint has been filed, before the state can take additional legal action. The loophole is a result of the state’s limited authority to file enforcement actions when there are “unpaid wages” — a term that was never defined until now, according to the attorney general’s office.

“This bill ensures that employers who cheat their workers out of hard-earned pay will face consequences, the same as you or I would face if we stole something,” said Attorney General Bob Ferguson in a statement. “Allowing the state to pursue penalties against employers that intentionally rip off their workers protects hardworking Washingtonians and their families.”

Employers that have withheld wages from their workers cannot bid on any public works projects until they pay the penalty and wages with interest in full. If an employer withholds wages from employees more than once in a five-year period, the law bars them from bidding on any public works projects for two years.

Inadvertent filings and reporting errors do not trigger penalties under the law.