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News / Business

Boeing pays record $11.5M in wages wrongly withheld from WA workers

By Patrick Malone, The Seattle Times
Published: May 31, 2024, 7:28am

SEATTLE — Nearly 500 Boeing employees received a combined $11.5 million in wrongfully withheld travel pay, the Washington Department of Labor & Industries announced Thursday.

The settlement marks the largest amount of back pay returned to workers in the agency’s history, vastly eclipsing the previous record of $2 million restored to employees of two rental car companies in 2017.

The last individual payouts to the Boeing workers were made March 24, and ranged from a few hundred dollars to more than $90,000. Employees who were shorted wages belong to Boeing’s Aircraft on Ground traveling work teams of technical experts who help return grounded planes to service. The payments stemmed from uncompensated travel that was required for work between October 2019 and August 2023.

“This is a positive development for our members,” Jon Holden, president of the Machinists union, District 751, that represents the affected employees, said through a spokesperson.

A 2021 Washington Court of Appeals ruling affirmed workers in the state must be compensated for out-of-town business travel. The appeals court ruling held that eligible employees must be paid for all out-of-town, business-related travel time, which had long been the policy of the Washington Department of Labor & Industries.

Under both that policy and the appellate ruling, out-of-town travel time for work must be paid if it meets three criteria: an employee being authorized or required by the employer to be at the destination, if the employee is on duty and the work takes place at a prescribed location.

The legal test that set that precedent, Port of Tacoma v. Sacks, involved travel to China by Port of Tacoma employees. The port paid them for eight hours a day, ignoring the time spent traveling to the work assignment. The court ruled that the employees were entitled to compensation for their travel time as well.

The ruling underscored that all travel time related to work is considered work time under Washington law, which differs from the federal Fair Labor Standards Act that excludes compensation for certain aspects of travel time, according to a compliance agreement between the Department of Labor & Industries and Boeing.

The department found that Boeing had not paid or accounted for all overtime and for paid sick leave associated with workers’ time spent going to out-of-town worksites.

“The workers’ time was in their employer’s hands, from when they [are] required to be in the hotel lobby to being transported to an aircraft hangar — and that’s time that must be paid,” Brian Templeton, manager of L&I’s Employment Standards program responsible for wage complaints.

In response to the precedent-setting Court of Appeals ruling in 2021, Boeing reviewed its travel pay policies, revised them to comply with the decision and then began issuing some corrective payments to employees, according to the compliance agreement.

After payments began, some Boeing employees filed complaints with L&I seeking unpaid travel wages. Some overstated what they were owed, and others understated the amount they were due. Boeing officials worked with L&I’s Proactive Investigations and Enforcement Unit, which was formed in 2018 to respond to precisely this type of case — complex matters involving large numbers of workers — to verify and correct travel payments to all employees who were due them.

“As Washington has clarified the state’s travel pay policies in the past several years, we also aligned our pay practices to reflect those requirements,” Boeing spokesman Connor Greenwood said in a written statement. “We also went a step further and provided back pay for eligible employees in 2021 and more recently provided back pay earlier this year for another group of employees that did not originally record all of their travel time. We are pleased the state has agreed to close an audit into Boeing pay practices.”

Labor & Industries alleges that Boeing violated Washington law failing to treat out-of-town travel as hours worked, failing to pay time and a half for overtime when workers exceeded 40 hours worked in a week and failing to accrue employee hours toward paid sick leave. The department did not deem Boeing’s violations to be willful. L&I released Boeing from the employee claims related to withheld travel pay as part of the compliance agreement.

Boeing took steps to avoid similar errors in the future, according to L&I. The company developed a new process for employees to submit travel-related time aimed at ensuring proper payment. The company also pledged to consult with L&I when future questions about what constitutes hours worked, should any arise. And Boeing agreed not to retaliate against employees who report they’ve been denied wages, which already is illegal under Washington law.