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WashingtonSB 54632025-2026 Regular SessionSenateWALLET

Concerning the duties of industrial insurance self-insured employers and third-party administrators.

Sponsored By: Emily Alvarado (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 1 benefits, 0 costs, 1 mixed.

Fair treatment and penalties for injured workers

Beginning January 1, 2026, Washington’s self-insured municipal employers and their outside claims administrators must deal fairly with workers. They must give workers’ interests equal consideration in all workers’ compensation matters. Pressuring workers to accept less compensation than they are owed violates this duty. The law applies to all claims, regardless of when the injury happened. Workers can file written complaints with the Department of Labor and Industries, which can also investigate on its own. Employers or administrators have 10 working days to submit a written response after receiving notice. Without a timely response, the department can decide using the information available. It must issue a final order within 30 calendar days of receiving a complete complaint or starting action itself. A violation requires a penalty of 1 to 52 times the average weekly wage at the order date, for the worker’s benefit. The department can adopt rules expanding this duty and setting penalties, drawing on claims practices, its experience, and state insurance rules.

Stronger employer oversight, with contract delays

Beginning January 1, 2026, repeat failures to deal fairly with workers trigger stronger oversight of self-insured employers. Two or more violations within three years require corrective action, including probation, preventive restrictions or changes, and a compliance audit. Another violation during corrective action requires the department to take away the employer’s approval to self-insure. After corrective action, the department can also withdraw approval based on compliance and the likelihood of future violations. Withdrawal is required for two or more later violations within two years, occurring within 10 years after earlier corrective action and probation ended. The department’s order date determines when a violation counts; later affirming orders relate back to that date. Minor or inadvertent errors or delays do not count as violations. The law also allows withdrawal for lost qualifications, an inadequate security deposit, or failure to pay an insolvency assessment. Other grounds include intentional or repeated pressure to hide workplace injuries, accept less compensation, or use litigation to obtain compensation. Habitual rule violations and unreasonable hiring refusals or dismissals over nondisabling bodily conditions are also grounds. Failure to follow required corrective action or a withdrawal order is another ground. However, the director can delay withdrawal for a municipal employer with an enforceable contract with a licensed claims administrator that cannot legally be ended. During that delay, the employer cannot renew or extend the contract. These rules apply to all claims, regardless of injury date.

Sponsors & Cosponsors

Sponsor

  • Emily Alvarado

    Democratic • Senate

Cosponsors

  • Annette Cleveland

    Democratic • Senate

  • Bob Hasegawa

    Democratic • Senate

  • Claire Wilson

    Democratic • Senate

  • Derek Stanford

    Democratic • Senate

  • Javier Valdez

    Democratic • Senate

  • Jeff Holy

    Republican • Senate

  • Jesse Salomon

    Democratic • Senate

  • Jessica Bateman

    Democratic • Senate

  • June Robinson

    Democratic • Senate

  • Liz Lovelett

    Democratic • Senate

  • Marko Liias

    Democratic • Senate

  • Mike Chapman

    Democratic • Senate

  • Paul Harris

    Republican • Senate

  • Rebecca Saldaña

    Democratic • Senate

  • Sharon Shewmake

    Democratic • Senate

  • Steve Conway

    Democratic • Senate

  • T'wina Nobles

    Democratic • Senate

  • Yasmin Trudeau

    Democratic • Senate

Roll Call Votes

All Roll Calls

Yes: 121 • No: 72

Senate vote • 4/22/2025

Final Passage as Amended by the House

Yes: 28 • No: 20

House vote • 4/11/2025

Final Passage as Amended by the House

Yes: 64 • No: 32 • Other: 2

Senate vote • 3/5/2025

3rd Reading & Final Passage

Yes: 29 • No: 20

Actions Timeline

  1. Effective date 1/1/2026.

    5/17/2025Senate

  2. Chapter 338, 2025 Laws.

    5/17/2025Senate

  3. Governor signed.

    5/17/2025legislature

  4. Delivered to Governor.

    4/27/2025legislature

  5. Speaker signed.

    4/26/2025legislature

  6. President signed.

    4/25/2025legislature

  7. Passed final passage; yeas, 28; nays, 20; absent, 0; excused, 0.

    4/22/2025Senate

  8. Senate concurred in House amendments.

    4/22/2025House

  9. Third reading, passed; yeas, 64; nays, 32; absent, 0; excused, 2.

    4/11/2025Senate

  10. Rules suspended. Placed on Third Reading.

    4/11/2025Senate

  11. Committee amendment(s) adopted as amended.

    4/11/2025Senate

  12. Rules Committee relieved of further consideration. Placed on second reading.

    4/11/2025Senate

  13. Referred to Rules 2 Review.

    4/8/2025Senate

  14. APP - Executive action taken by committee.

    4/5/2025Senate

  15. Minority; without recommendation.

    4/5/2025Senate

  16. Minority; do not pass.

    4/5/2025Senate

  17. APP - Majority; do pass with amendment(s).

    4/5/2025Senate

  18. Referred to Appropriations.

    3/25/2025Senate

  19. LAWS - Executive action taken by committee.

    3/21/2025Senate

  20. Minority; without recommendation.

    3/21/2025Senate

  21. LAWS - Majority; do pass.

    3/21/2025Senate

  22. First reading, referred to Labor & Workplace Standards.

    3/7/2025Senate

  23. Third reading, passed; yeas, 29; nays, 20; absent, 0; excused, 0.

    3/5/2025Senate

  24. Rules suspended. Placed on Third Reading.

    3/5/2025Senate

  25. Placed on second reading by Rules Committee.

    2/26/2025Senate

Bill Text

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