Wage replacement

AN ACT Relating to creating a wage replacement program for 1
certain Washington workers excluded from unemployment insurance; 2
amending RCW 50.29.041 and 50.24.014; reenacting and amending RCW 3
42.56.410 and 50.29.025; adding a new chapter to Title 50 RCW; 4
creating a new section; and prescribing penalties. 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:6
NEW SECTION. Sec. 1. The legislature finds and declares:7
(1) When unemployment insurance was established by the United 8
States congress and the state legislature, the legislature explicitly 9
recognized that economic insecurity caused by unemployment is the 10
greatest hazard of our economic life that falls with crushing force 11
upon the unemployed worker, which therefore requires the compulsory 12
setting aside of unemployment reserves to reduce the suffering caused 13
by unemployment to a minimum. Unemployment insurance is essential to 14
ensure that individuals who lose income can survive and meet their 15
basic needs during periods they are unable to find stable work.16
(2) Many immigrant workers, however, are not eligible for 17
unemployment insurance and have not received any assistance from this 18
jointly administered state and federal insurance program. RCW 19
50.20.098 provides that unemployment insurance benefits shall not be 20
payable unless the individual was lawfully admitted for permanent 21
H-1022.1
HOUSE BILL 1773
State of Washington 69th Legislature 2025 Regular Session
By Representatives Cortes, Ortiz-Self, Mena, Taylor, Farivar, Berry,
Walen, Ormsby, Thai, Stonier, Ryu, Ramel, Macri, Berg, Gregerson,
Zahn, Simmons, Scott, Parshley, Salahuddin, Fosse, Duerr, Doglio,
Pollet, and Reed
Read first time 01/31/25. Referred to Committee on Labor & Workplace
Standards.
p. 1 HB 1773
residence, was lawfully present for purposes of performing such 1
services, or otherwise was permanently residing in the United States 2
under color of law at the time such services were performed. Title 8 3
U.S.C. Sec. 1621 (d) requires that states wishing to extend benefits 4
beyond a short list of qualified immigrants must affirmatively do so. 5
Those ineligible to receive unemployment benefits include workers 6
without work authorization, workers whose work authorization has 7
expired or is awaiting renewal, and workers who recently regularized 8
their immigration status. 9
(3) Ineligibility for unemployment benefits has devastated 10
immigrant communities during the pandemic economic crisis, 11
particularly immigrants working in low-wage industries. Several of 12
the industries that have experienced the highest rates of job loss in 13
Washington due to the pandemic are low-wage sectors with the highest 14
numbers of immigrant workers including the restaurant, hotel, retail, 15
and construction industries. Economists predict large-scale permanent 16
job loss and long-term unemployment as the effects of the pandemic 17
are similar to the great recession of 2008. Without access to 18
unemployment benefits among other critical safety net programs, 19
Washington's immigrant communities face deep economic devastation for 20
years to come. Prior to the pandemic, the poverty rate of immigrants 21
in Washington was already high, with 18 percent of the state's 22
immigrant residents living in poverty compared to 12 percent of 23
United States born residents. The crisis is expected to significantly 24
expand this disparity. 25
(4) The fiscal policy institute reports that Washington employers 26
have contributed nearly $400,000,000 to national and state 27
unemployment trust funds between the years 2010-2019 on behalf of 28
undocumented workers. 29
(5) To support the survival of Washington's immigrant workers and 30
families during periods of crisis, particularly low-income 31
households, and to provide the safety net that United States born 32
Washington residents can access, the legislature intends to establish 33
a weekly wage replacement state program similar to the state and 34
federal unemployment insurance program for workers who are unemployed 35
and not eligible for the state and federal unemployment insurance.36
NEW SECTION. Sec. 2. The definitions in this section apply 37
throughout this chapter unless the context clearly requires 38
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otherwise. In addition, the definitions in chapter 50.04 RCW apply, 1
except as otherwise provided in this section. 2
(1) "Application for initial determination" has the meaning 3
provided in RCW 50.20.140. 4
(2) "Benefit" or "benefits" means the compensation payable to a 5
claimant, as provided in either this title or this chapter with 6
respect to the claimant's unemployment. 7
(3) "Claimant" means an individual applying for benefits under 8
this chapter. 9
(4) "Department" means the employment security department.10
(5)(a) "Employment" has the meaning provided in RCW 50.04.100, 11
subject to the provisions of RCW 50.04.110, 50.04.120 through 12
50.04.205, and 50.04.210 through 50.04.280. The provisions of RCW 13
50.04.206 do not apply to the definition of "employment" for this 14
chapter. 15
(b) "Employment" does not include service that is performed by a 16
nonresident for the period the nonresident is temporarily present in 17
the United States as a nonimmigrant under subparagraph (F), (H)(ii), 18
(H)(iii), or (J) of 8 U.S.C. Sec. 1101 (a)(15) of the immigration and 19
nationality act, as amended as of the effective date of this section, 20
and that is performed to carry out the purpose specified in the 21
applicable subparagraph of the immigration and nationality act.22
(6)(a) "Resident of the state of Washington" means a claimant who 23
takes actions indicating they intend to live in Washington state on 24
more than a temporary or transient basis throughout the duration of 25
receiving benefits under this chapter. Under this chapter, a claimant 26
is a resident of the state of Washington if the claimant:27
(i) Maintains a residence in Washington for personal use with a 28
utility bill showing their full name and Washington state address;29
(ii) Lives in a motor home or vessel that is not permanently 30
attached to any real property if the claimant previously lived in 31
this state and does not have a permanent residence in any other 32
state; 33
(iii) Is attending school in this state and paying tuition as a 34
Washington resident, is a custodial parent with a child attending a 35
public school in this state, or has correspondence from a school in 36
this state showing their full name and Washington state address;37
(iv) Has a Washington state identification card showing their 38
full name and Washington state address; 39
(v) Has a current library card issued in this state;40
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(vi) Has correspondence from a community or faith-based 1
organization in this state showing their full name and Washington 2
state address; or 3
(vii) Has a medical document showing their full name and 4
Washington state address. 5
(b) The actions and documentation outlined in this subsection (6) 6
are a nonexhaustive list, and the third-party administrator may adopt 7
additional methods by which a claimant may prove they are a resident 8
of the state of Washington. 9
(7) "Third-party administrator" means an entity with which the 10
department contracts to administer payments to eligible individuals 11
under this chapter. 12
(8) "Week of unemployment" means any week during which a 13
claimant, including a self-employed claimant: 14
(a) Performs no services and with respect to which no 15
remuneration is payable to the claimant; or 16
(b) Performs less than full-time work if the remuneration payable 17
to the claimant with respect to such week is less than one and one-18
third times the individual's weekly benefit amount plus $5.00.19
NEW SECTION. Sec. 3. (1) The Washington wage replacement 20
account is created in the custody of the state treasurer. Revenues to 21
the account must consist of appropriations and transfers by the 22
legislature and all other funding directed for deposit into the 23
account. Expenditures from the account may be used only for providing 24
benefits under this chapter to eligible and qualified claimants, 25
contracting with community-based organizations to notify individuals 26
who may be eligible for benefits under this chapter, administration 27
of the advisory committee of this act, the department's 28
administrative costs, and third-party administrators under this 29
chapter. The account is subject to the allotment procedures under 30
chapter 43.88 RCW, but an appropriation is not required for 31
expenditures.32
(2)(a) The department shall select a third-party administrator by 33
July 1, 2026. At a minimum, the third-party administrator must have 34
experience building and operating financial benefit systems that are 35
proven to be accessible and responsive to the target population and 36
demonstrated mechanisms to prevent disclosure of confidential or 37
private information. The department may adopt rules for selecting and 38
replacing the third-party administrator. 39
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(b) Each quarter, to the extent allowed by the United States 1
department of labor, employment and training administration, the 2
department shall allocate the money in the wage replacement account 3
to one or more third-party administrators for the purpose of 4
providing benefits to eligible and qualified claimants and for 5
contracting with community-based organizations to notify individuals 6
who may be eligible for this program. 7
(c) The third-party administrator selected pursuant to (a) of 8
this subsection shall, within one year after the contract is awarded 9
after the effective date of this section: 10
(i) Contract with community-based organizations to provide 11
outreach to unemployed individuals who may be eligible for benefits 12
under this chapter; 13
(ii) Screen each applicant for benefits to determine if the 14
applicant is an eligible individual; 15
(iii) Pay benefits to eligible individuals; and16
(iv) Establish an appeal process for benefit denials, 17
suspensions, or terminations. 18
NEW SECTION. Sec. 4. (1) The department must appoint an 19
advisory committee to review issues and topics of interest related to 20
this chapter.21
(2) The committee is composed of 11 members: 22
(a) Three members representing immigrants' interests;23
(b) Two members representing workers' interests in unemployment, 24
each of whom must be appointed from a list of names submitted by a 25
recognized statewide organization of employees; 26
(c) Two members representing employers' interests in 27
unemployment, each of whom must be appointed from a list of names 28
submitted by a recognized statewide organization of employers;29
(d) Three ex officio members, without a vote, representing the 30
state commission on African American affairs, the state commission on 31
Hispanic affairs, and the state commission on Asian Pacific American 32
affairs; and 33
(e) One ex officio member, without a vote, representing the 34
department and who will serve as the chair. 35
(3) The advisory committee must provide comment on implementation 36
of this chapter, utilization of benefits under this chapter, 37
selection and performance of the third-party administrator, and study 38
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issues the advisory committee determines to require its 1
consideration. 2
(4) The members must serve without compensation but are eligible 3
for reimbursement of travel expenses as provided in RCW 43.03.050 and 4
43.03.060, and for stipends provided by the department under RCW 5
43.03.220. All expenses of the advisory committee must be paid by the 6
Washington wage replacement account created in section 3 of this act.7
(5) The department must comply with the requirements of RCW 8
43.18A.020 in making appointments provided in this section. The 9
department must provide the report required in RCW 43.18A.020.10
NEW SECTION. Sec. 5. (1) Beginning January 1, 2027, a claimant 11
may apply for benefits under this chapter with respect to any week of 12
unemployment in the claimant's benefit year if the claimant provides 13
the department with sufficient evidence that the claimant is 14
ineligible for benefits under Title 50 RCW.15
(2) The claimant must meet the eligibility and qualification 16
requirements under sections 6 and 7 of this act. 17
NEW SECTION. Sec. 6. (1) To be eligible for benefits under this 18
chapter, a claimant, who has provided sufficient evidence to the 19
department as provided in section 5 of this act, must satisfy the 20
steps in this section.21
(2) The claimant must file an application for benefits under this 22
chapter with the third-party administrator, which includes 23
information or documentation verifying the claimant:24
(a) Is a resident of the state of Washington and has sufficient 25
photographic identification confirming their identity;26
(b) Worked 680 hours in employment in the claimant's base year or 27
earned wages during the claimant's base year equal to 680 times the 28
minimum wage set by RCW 49.46.020 in effect during the first quarter 29
of the claimant's base year; 30
(c) Is unemployed through no fault of their own; and31
(d) Has been unemployed for a waiting period of one week.32
(3) If the claimant's wages are not verified by employer reports 33
provided by the claimant to the third-party administrator under 34
subsection (2)(b) of this section, the third-party administrator must 35
request additional information or documentation from the claimant 36
verifying the claimant earned wages during the claimant's base year 37
equal to 680 times the minimum wage set by RCW 49.46.020 in effect 38
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during the first quarter of the claimant's base year. If, after the 1
third-party administrator's request, the claimant fails to provide 2
sufficient information or documentation, the claimant may be denied 3
benefits under this chapter. 4
(4) The third-party administrator may contract with a community-5
based organization to assist claimants in gathering information or 6
documentation required under this section. Such assistance shall not 7
include communication with employers regarding applicant eligibility.8
(5) The third-party administrator must make the final decision on 9
whether the claimant is eligible for benefits under this chapter. The 10
third-party administrator may utilize information or documentation 11
provided by the claimant or any third-party, community-based 12
organization contracted under this section. 13
NEW SECTION. Sec. 7. (1) If the third-party administrator 14
determines the claimant is eligible for benefits under this chapter, 15
the claimant may qualify for weekly benefits by self-attesting that 16
the claimant meets the following requirements for each week of 17
unemployment in which the claimant is applying for benefits under 18
this chapter:19
(a) The claimant must be actively seeking work in any trade, 20
occupation, profession, or business for which the claimant is 21
reasonably fitted; and 22
(b) The claimant must report to the third-party administrator any 23
wages or remuneration the claimant received. 24
(2) For the purposes of this section, "actively seeking work" 25
means participating in job search, educational, or professional 26
development activities. 27
(3) The third-party administrator may take reasonable steps to 28
confirm the claimant's job search, educational, or professional 29
development activities, and current unemployment status.30
NEW SECTION. Sec. 8. (1) A claimant who is eligible and 31
qualified for benefits under this chapter must receive a weekly 32
benefit amount equal to the weekly benefit amount calculated in RCW 33
50.20.120 by the third-party administrator.34
(2) Benefits must be payable to any eligible and qualified 35
claimant during the claimant's benefit year in a maximum amount equal 36
to the lesser of 26 times the weekly benefit amount, as determined 37
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under subsection (1) of this section, or one-third of the claimant's 1
base year wages under this chapter. 2
NEW SECTION. Sec. 9. If waiting period credit or the payment of 3
benefits under this chapter are denied to any claimant for any week 4
or weeks, the claimant must be promptly issued written notice of the 5
denial and reasons for such denial by the third-party administrator.6
NEW SECTION. Sec. 10. (1) A claimant is disqualified for 7
benefits under this chapter:8
(a) If the third-party administrator finds that a claimant:9
(i) Left the claimant's most recent work voluntarily without good 10
cause; 11
(ii) Was discharged for misconduct or gross misconduct connected 12
with the claimant's most recent work; or 13
(iii) Knowingly made a false statement or representation 14
involving a material fact or knowingly failed to report a material 15
fact and, as a result, has obtained or attempted to obtain any 16
benefits under this chapter; or 17
(b) For any week a claimant has received, is receiving, or will 18
receive compensation, under: 19
(i) Chapters 50.01 through 50.36 RCW; 20
(ii) Title 50A RCW; 21
(iii) RCW 51.32.060; 22
(iv) RCW 51.32.090; or 23
(v) Any other applicable federal unemployment compensation, 24
industrial insurance, or state disability insurance laws.25
(2) Cessation of operations by an employer for the purpose of 26
granting vacations, whether by union contract or other reasons, must 27
not be construed to be a voluntary quit or a voluntary unemployment 28
on the part of the claimant. 29
(3) For purposes of determining good cause, the third-party 30
administrator may consider the reason provided in this title.31
NEW SECTION. Sec. 11. (1) Benefits are due and payable under 32
this chapter only to the extent provided in this chapter and to the 33
extent that moneys are available in the funds distributed to the 34
third-party administrator from the Washington wage replacement 35
account created in section 3 of this act.36
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(2) The third-party administrator nor the department nor the 1
state are liable for any amount exceeding such sums.2
NEW SECTION. Sec. 12. (1) If information provided to the 3
department or the third-party administrator by another governmental 4
agency is held private and confidential by state or federal laws, 5
neither the department nor the third-party administrator may release 6
such information.7
(2) Information provided to the department or the third-party 8
administrator by another governmental entity conditioned upon the 9
privacy and confidentiality is to be held private and confidential 10
according to the agreement between the department or the third-party 11
administrator and other governmental entity. 12
NEW SECTION. Sec. 13. Any information or records concerning a 13
claimant or employing unit obtained by the department or the third-14
party administrator pursuant to the administration of this chapter 15
must be private and confidential, except as otherwise provided in 16
this chapter. This chapter does not create a rule of evidence. 17
Information or records may only be released by the department or the 18
third-party administrator when the release is:19
(1) To the person who is the subject of such records or an 20
authorized representative; 21
(2) Necessary to comply with a lawful court order, judicial 22
warrant signed by a judge appointed pursuant to Article III of the 23
United States Constitution, or judicial subpoena for specific records 24
issued pursuant to the criminal procedure law or the civil practice 25
law and rules; or 26
(3) Disclosed in a manner that could not be used to determine the 27
identities of the claimants or employers to whom the data pertains, 28
alone or in combination with other data. 29
NEW SECTION. Sec. 14. (1) In administering the program under 30
this chapter, the department and the third-party administrator are 31
prohibited from taking any of the following actions:32
(a) Soliciting from the claimant, orally or in written form, a 33
claimant's nationality, race, ethnicity, place of birth, citizenship, 34
or immigration status; 35
(b) Indicating in its records which documents the claimant used 36
to prove the claimant's age or identity; 37
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(c) Compelling a claimant to admit in writing whether the 1
claimant has proof of lawful presence in the United States or to 2
explain why the claimant is ineligible for a social security number;3
(d) Contacting a claimant's current, former, or prospective 4
employers including, but not limited to, for the purposes of 5
verifying employment status; and 6
(e) Attempting to ascertain a claimant's immigration or 7
citizenship status, except to determine whether a claimant is 8
excluded from benefits under chapters 50.01 through 50.36 RCW and 9
potentially eligible for benefits under this chapter.10
(2) The third-party administrator must destroy all records 11
containing information that were provided by a claimant or collected 12
by the department to verify eligibility for the program within 15 13
days of a claimant no longer using the program. 14
(3) As provided in RCW 42.56.410, any information under this 15
chapter is not a public record and must not be disclosed or otherwise 16
made accessible in response to any request for records except:17
(a) To the person who is the subject of such records or an 18
authorized representative; 19
(b) Where necessary to comply with a lawful court order, judicial 20
warrant signed by a judge appointed pursuant to Article III of the 21
United States Constitution, or judicial subpoena for individual 22
records issued pursuant to the criminal procedure law or the civil 23
practice law and rules; or 24
(c) If disclosed in a manner that could not be used to determine 25
the identities of the claimants or employers to whom the data 26
pertains, alone or in combination with other data.27
(4) For the purposes of this section, whenever a lawful court 28
order, judicial warrant, or judicial subpoena for individual records 29
properly issued pursuant to the criminal procedure law or the civil 30
practice law and rules is presented to a court, only those records, 31
documents, and information specifically sought by such court order, 32
warrant, or subpoena may be disclosed. 33
(5) Notwithstanding any other law, information and records 34
containing information that are collected or obtained by the state, 35
any state agency, or any subdivision of the state, including agents 36
of the state universities and community colleges, in addition to any 37
private persons contracted to administer public services or programs, 38
must only be collected, used, and retained for the purpose of 39
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assessing eligibility for and providing those public services and 1
programs created by this chapter. 2
(6) No information collected under this chapter may be used for 3
purposes of investigating, locating, or apprehending claimants for 4
immigration-related violations including, but not exclusive to, 5
queries or inquiries under 8 U.S.C. Secs. 1324, 1325, and 1326.6
NEW SECTION. Sec. 15. The third-party administrator must create 7
a process by which claimants can notify the administrator of payment 8
errors and for collection and forgiveness of such overpayments.9
NEW SECTION. Sec. 16. Any assignment, pledge, or encumbrance of 10
any right to benefits under this chapter which are or may become due 11
or payable under this chapter must be void. Such rights to benefits 12
under this chapter must be exempt from levy, execution, attachment, 13
or any other remedy whatsoever provided for the collection of debts. 14
Benefits under this chapter received by any individual, so long as 15
they are not commingled with other funds of the recipient, must be 16
exempt from any remedy whatsoever for collection of all debts except 17
debts incurred for necessaries furnished to such individual or their 18
spouse or dependents during the time when such individual was 19
unemployed. Any waiver of any exemption provided for in this section 20
must be void. Any agreement by an individual to waive, release, or 21
commute their rights to benefits or any other rights under this 22
chapter must be void.23
NEW SECTION. Sec. 17. The department may adopt rules as 24
necessary to implement this chapter.25
NEW SECTION. Sec. 18. The legislature reserves the right to 26
amend or repeal all or any part of this chapter at any time; and 27
there must be no vested private right of any kind against such 28
amendment or repeal. All the rights, privileges, or immunities 29
conferred by this chapter or by acts done pursuant thereto must exist 30
subject to the power of the legislature to amend or repeal this 31
chapter at any time.32
Sec. 19. RCW 42.56.410 and 2019 c 81 s 10 and 2019 c 13 s 68 are 33
each reenacted and amended to read as follows: 34
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The following information related to employment security is 1
exempt from disclosure under this chapter: 2
(1) Records maintained by the employment security department and 3
subject to chapter 50.13 or 50A.25 RCW if provided to another 4
individual or organization for operational, research, or evaluation 5
purposes ((are exempt from disclosure under this chapter)); ((and))6
(2) Any inventory or data map records created under RCW 7
50.13.120(1)(b) that reveal the location of personal information or 8
the extent to which it is protected; and9
(3) Any information or records maintained by the employment 10
security department or third-party administrator pursuant to chapter 11
50.--- RCW (the new chapter created in section 23 of this act) 12
except:13
(a) To the person who is the subject of such records or an 14
authorized representative;15
(b) Where necessary to comply with a lawful court order, judicial 16
warrant signed by a judge appointed pursuant to Article III of the 17
United States Constitution, or judicial subpoena for individual 18
records issued pursuant to the criminal procedure law or the civil 19
practice law and rules; or20
(c) If disclosed in a manner that could not be used to determine 21
the identities of the claimants or employers to whom the data 22
pertains, alone or in combination with other data.23
Sec. 20. RCW 50.29.025 and 2022 c 61 s 1 and 2022 c 17 s 1 are 24
each reenacted and amended to read as follows: 25
(1) The contribution rate for each employer subject to 26
contributions under RCW 50.24.010 shall be the sum of the array 27
calculation factor rate and the graduated social cost factor rate 28
determined under this subsection ((, and the solvency surcharge 29
determined under RCW 50.29.041, if any)). 30
(a) The array calculation factor rate shall be determined as 31
follows: 32
(i) An array shall be prepared, listing all qualified employers 33
in ascending order of their benefit ratios. The array shall show for 34
each qualified employer: (A) Identification number; (B) benefit 35
ratio; and (C) taxable payrolls for the four consecutive calendar 36
quarters immediately preceding the computation date and reported to 37
the employment security department by the cut-off date.38
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(ii) Each employer in the array shall be assigned to one of forty 1
rate classes according to his or her benefit ratio as follows, and, 2
except as provided in RCW 50.29.026, the array calculation factor 3
rate for each employer in the array shall be the rate specified in 4
the rate class to which the employer has been assigned:5
6
7
Benefit Ratio Rate
Class
Rate
(percent)
8 At least Less than
9 0.000001 1 0.00
10 0.000001 0.001250 2 0.11
11 0.001250 0.002500 3 0.22
12 0.002500 0.003750 4 0.33
13 0.003750 0.005000 5 0.43
14 0.005000 0.006250 6 0.54
15 0.006250 0.007500 7 0.65
16 0.007500 0.008750 8 0.76
17 0.008750 0.010000 9 0.88
18 0.010000 0.011250 10 1.01
19 0.011250 0.012500 11 1.14
20 0.012500 0.013750 12 1.28
21 0.013750 0.015000 13 1.41
22 0.015000 0.016250 14 1.54
23 0.016250 0.017500 15 1.67
24 0.017500 0.018750 16 1.80
25 0.018750 0.020000 17 1.94
26 0.020000 0.021250 18 2.07
27 0.021250 0.022500 19 2.20
28 0.022500 0.023750 20 2.38
29 0.023750 0.025000 21 2.50
30 0.025000 0.026250 22 2.63
31 0.026250 0.027500 23 2.75
32 0.027500 0.028750 24 2.88
33 0.028750 0.030000 25 3.00
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1 0.030000 0.031250 26 3.13
2 0.031250 0.032500 27 3.25
3 0.032500 0.033750 28 3.38
4 0.033750 0.035000 29 3.50
5 0.035000 0.036250 30 3.63
6 0.036250 0.037500 31 3.75
7 0.037500 0.040000 32 4.00
8 0.040000 0.042500 33 4.25
9 0.042500 0.045000 34 4.50
10 0.045000 0.047500 35 4.75
11 0.047500 0.050000 36 5.00
12 0.050000 0.052500 37 5.15
13 0.052500 0.055000 38 5.25
14 0.055000 0.057500 39 5.30
15 0.057500 40 5.40
(b) The graduated social cost factor rate shall be determined as 16
follows: 17
(i)(A) Except as provided in (b)(i)(B) and (C) of this 18
subsection, the commissioner shall calculate the flat social cost 19
factor for a rate year by dividing the total social cost by the total 20
taxable payroll. The division shall be carried to the second decimal 21
place with the remaining fraction disregarded unless it amounts to 22
five hundredths or more, in which case the second decimal place shall 23
be rounded to the next higher digit. The flat social cost factor 24
shall be expressed as a percentage. 25
(B)(I) If, on the cut-off date, the balance in the unemployment 26
compensation fund is determined by the commissioner to be an amount 27
that will provide more than ten months of unemployment benefits, the 28
commissioner shall calculate the flat social cost factor for the rate 29
year immediately following the cut-off date by reducing the total 30
social cost by the dollar amount that represents the number of months 31
for which the balance in the unemployment compensation fund on the 32
cut-off date will provide benefits above ten months and dividing the 33
result by the total taxable payroll. However, the calculation under 34
this subsection (1)(b)(i)(B) for a rate year may not result in a flat 35
social cost factor that is more than four-tenths lower than the 36
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calculation under (b)(i)(A) of this subsection for that rate year. 1
For rate year 2011 and thereafter, the calculation may not result in 2
a flat social cost factor that is more than one and twenty-two one-3
hundredths percent except for rate year 2021 the calculation may not 4
result in a flat social cost factor that is more than five-tenths 5
percent, for rate year 2022 the calculation may not result in a flat 6
social cost factor that is more than five-tenths percent, for rate 7
year 2023 the calculation may not result in a flat social cost factor 8
that is more than seven-tenths percent, for rate year 2024 the 9
calculation may not result in a flat social cost factor that is more 10
than eighty-five one-hundredths percent, and for rate year 2025 the 11
calculation may not result in a flat social cost factor that is more 12
than nine-tenths percent. 13
(II) If, on the cut-off date, the balance in the unemployment 14
compensation fund is determined by the commissioner to be an amount 15
that will provide ten months of unemployment benefits or less, the 16
flat social cost factor for the rate year immediately following the 17
cut-off date may not increase by more than fifty percent over the 18
previous rate year or may not exceed one and twenty-two one-19
hundredths percent, whichever is greater. 20
(III) For the purposes of this subsection (1)(b), the 21
commissioner shall determine the number of months of unemployment 22
benefits in the unemployment compensation fund using the benefit cost 23
rate for the average of the three highest calendar benefit cost rates 24
in the twenty consecutive completed calendar years immediately 25
preceding the cut-off date or a period of consecutive calendar years 26
immediately preceding the cut-off date that includes three 27
recessions, if longer. 28
(C) The minimum flat social cost factor calculated under this 29
subsection (1)(b) shall be six-tenths of one percent, except that if 30
the balance in the unemployment compensation fund is determined by 31
the commissioner to be an amount that will provide:32
(I) At least ten months but less than eleven months of 33
unemployment benefits, the minimum shall be five-tenths of one 34
percent; or 35
(II) At least eleven months but less than twelve months of 36
unemployment benefits, the minimum shall be forty-five hundredths of 37
one percent; or 38
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(III) At least twelve months but less than thirteen months of 1
unemployment benefits, the minimum shall be four-tenths of one 2
percent; or 3
(IV) At least thirteen months but less than fifteen months of 4
unemployment benefits, the minimum shall be thirty-five hundredths of 5
one percent; or 6
(V) At least fifteen months but less than seventeen months of 7
unemployment benefits, the minimum shall be twenty-five hundredths of 8
one percent; or 9
(VI) At least seventeen months but less than eighteen months of 10
unemployment benefits, the minimum shall be fifteen hundredths of one 11
percent; or 12
(VII) At least eighteen months of unemployment benefits, the 13
minimum shall be fifteen hundredths of one percent through rate year 14
2011 and shall be zero thereafter. 15
(ii) The graduated social cost factor rate for each employer in 16
the array is the flat social cost factor multiplied by the percentage 17
specified as follows for the rate class to which the employer has 18
been assigned in (a)(ii) of this subsection, except that the sum of 19
an employer's array calculation factor rate and the graduated social 20
cost factor rate may not exceed six percent or, for employers whose 21
North American industry classification system code is within "111," 22
"112," "1141," "115," "3114," "3117," "42448," or "49312," may not 23
exceed five and four-tenths percent: 24
(A) Rate class 1 - 40 percent; 25
(B) Rate class 2 - 44 percent; 26
(C) Rate class 3 - 48 percent; 27
(D) Rate class 4 - 52 percent; 28
(E) Rate class 5 - 56 percent; 29
(F) Rate class 6 - 60 percent; 30
(G) Rate class 7 - 64 percent; 31
(H) Rate class 8 - 68 percent; 32
(I) Rate class 9 - 72 percent; 33
(J) Rate class 10 - 76 percent; 34
(K) Rate class 11 - 80 percent; 35
(L) Rate class 12 - 84 percent; 36
(M) Rate class 13 - 88 percent; 37
(N) Rate class 14 - 92 percent; 38
(O) Rate class 15 - 96 percent; 39
(P) Rate class 16 - 100 percent; 40
p. 16 HB 1773
(Q) Rate class 17 - 104 percent; 1
(R) Rate class 18 - 108 percent; 2
(S) Rate class 19 - 112 percent; 3
(T) Rate class 20 - 116 percent; and 4
(U) Rate classes 21 through 40 - 120 percent. 5
(iii) For rate year 2023, for any employer with 10 or fewer 6
employees as reported on the employer's fourth quarter report to the 7
department for 2021 and whose rate class is greater than rate class 8
7, the employer's rate class, only for purposes of the rate classes 9
in (b)(ii)(A) through (U) of this subsection (1), is rate class 7.10
(iv) For the purposes of this section: 11
(A) "Total social cost" means the amount calculated by 12
subtracting the array calculation factor contributions paid by all 13
employers with respect to the four consecutive calendar quarters 14
immediately preceding the computation date and paid to the employment 15
security department by the cut-off date from the total unemployment 16
benefits paid to claimants in the same four consecutive calendar 17
quarters. 18
(B) "Total taxable payroll" means the total amount of wages 19
subject to tax, as determined under RCW 50.24.010, for all employers 20
in the four consecutive calendar quarters immediately preceding the 21
computation date and reported to the employment security department 22
by the cut-off date. 23
(c) For employers who do not meet the definition of "qualified 24
employer" by reason of failure to pay contributions when due:25
(i)(A) For an employer who does not enter into an approved 26
agency-deferred payment contract as described in (c)(i)(B) or (C) of 27
this subsection, the array calculation factor rate shall be the rate 28
it would have been if the employer had not been delinquent in payment 29
plus an additional one percent or, if the employer is delinquent in 30
payment for a second or more consecutive year, an additional two 31
percent; 32
(B) For an employer who enters an approved agency-deferred 33
payment contract by September 30th of the previous rate year, the 34
array calculation factor rate shall be the rate it would have been if 35
the employer had not been delinquent in payment; 36
(C) For an employer who enters an approved agency-deferred 37
payment contract after September 30th of the previous rate year, but 38
within thirty days of the date the department sent its first tax rate 39
notice, the array calculation factor rate shall be the rate it would 40
p. 17 HB 1773
have been had the employer not been delinquent in payment plus an 1
additional one-half of one percent or, if the employer is delinquent 2
in payment for a second or more consecutive year, an additional one 3
and one-half percent; 4
(D) For an employer who enters an approved agency-deferred 5
payment contract as described in (c)(i)(B) or (C) of this subsection, 6
but who fails to make any one of the succeeding deferred payments or 7
fails to submit any succeeding tax report and payment in a timely 8
manner, the array calculation factor rate shall immediately revert to 9
the applicable array calculation factor rate under (c)(i)(A) of this 10
subsection; and 11
(ii) The social cost factor rate shall be the social cost factor 12
rate assigned to rate class 40 under (b)(ii) of this subsection.13
(d) For all other employers not qualified to be in the array:14
(i) The array calculation factor rate shall be a rate equal to 15
the average industry array calculation factor rate as determined by 16
the commissioner, multiplied by the history factor, but not less than 17
one percent or more than the array calculation factor rate in rate 18
class 40; 19
(ii) The social cost factor rate shall be a rate equal to the 20
average industry social cost factor rate as determined by the 21
commissioner, multiplied by the history factor, but not more than the 22
social cost factor rate assigned to rate class 40 under (b)(ii) of 23
this subsection; and 24
(iii) The history factor shall be based on the total amounts of 25
benefits charged and contributions paid in the three fiscal years 26
ending prior to the computation date by employers not qualified to be 27
in the array, other than employers in (c) of this subsection, who 28
were first subject to contributions in the calendar year ending three 29
years prior to the computation date. The commissioner shall calculate 30
the history ratio by dividing the total amount of benefits charged by 31
the total amount of contributions paid in this three-year period by 32
these employers. The division shall be carried to the second decimal 33
place with the remaining fraction disregarded unless it amounts to 34
five one -hundredths or more, in which case the second decimal place 35
shall be rounded to the next higher digit. The commissioner shall 36
determine the history factor according to the history ratio as 37
follows: 38
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1
2
3

History
Ratio
History
Factor
(percent)
4 At least Less than
5 (A) .95 90
6 (B) .95 1.05 100
7 (C) 1.05 115
(2) Assignment of employers by the commissioner to industrial 8
classification, for purposes of this section, shall be in accordance 9
with established classification practices found in the North American 10
industry classification system code. 11
Sec. 21. RCW 50.29.041 and 2021 c 2 s 19 are each amended to 12
read as follows: 13
(1) Except for ((contributions assessed for )) rate years 2021, 14
2022, 2023, 2024, and 2025, ((the contribution rate of )) each 15
employer subject to contributions under RCW 50.24.010 shall 16
((include)) pay a solvency surcharge determined as follows:17
(((1))) (a) This section shall apply to employers ((' 18
contributions)) for a rate year immediately following a cut-off date 19
only if, on the cut-off date, the balance in the unemployment 20
compensation fund is determined by the commissioner to be an amount 21
that will provide fewer than seven months of unemployment benefits.22
(((2))) (b) The solvency surcharge shall be the lowest rate 23
necessary, as determined by the commissioner, but not more than two-24
tenths of one percent, to provide revenue during the applicable rate 25
year that will fund unemployment benefits for the number of months 26
that is the difference between nine months and the number of months 27
for which the balance in the unemployment compensation fund on the 28
cut-off date will provide benefits. 29
(((3))) (c) The basis for determining the number of months of 30
unemployment benefits shall be the same basis used in RCW 31
50.29.025(1)(b)(i)(B). 32
(d) Funds collected under this subsection (1) shall be deposited 33
into the unemployment compensation fund.34
(2) Each employer subject to contributions under RCW 50.24.010 35
shall pay a wage replacement program surcharge determined as follows:36
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(a) For rate years 2026 and 2027, the rate shall be one one-1
hundredths of one percent;2
(b) For rate years beginning in 2028 and thereafter, the 3
commissioner shall determine the wage replacement program surcharge 4
at the lowest rate necessary to provide revenue during the applicable 5
rate year that will fund administration and benefits of the program 6
provided in sections 1 through 18 of this act; however, the total 7
combined rate of (b) of this subsection (2) and the rate provided in 8
RCW 50.24.014(1)(a) may not exceed eight one-hundredths of one 9
percent;10
(c) Funds collected under this subsection (2) must be deposited 11
into the Washington wage replacement account created under section 3 12
of this act.13
Sec. 22. RCW 50.24.014 and 2023 c 475 s 934 are each amended to 14
read as follows: 15
(1)(a) A separate and identifiable account to provide for the 16
financing of special programs to assist the unemployed is established 17
in the administrative contingency fund. All money in this account 18
shall be expended solely for the purposes of this title and for no 19
other purposes whatsoever, except as provided in subsection (4) of 20
this section. Contributions to this account shall accrue and become 21
payable by each employer, except employers as described in RCW 22
50.44.010 and 50.44.030 who have properly elected to make payments in 23
lieu of contributions, taxable local government employers as 24
described in RCW 50.44.035, and those employers who are required to 25
make payments in lieu of contributions, at a basic rate of ((two)) 26
one one-hundredths of one percent. The amount of wages subject to tax 27
shall be determined under RCW 50.24.010. 28
(b) A separate and identifiable account is established in the 29
administrative contingency fund for financing the employment security 30
department's administrative costs under RCW 50.22.150 and 50.22.155 31
and the costs under RCW 50.22.150(11) and 50.22.155 (1)(m) and 32
(2)(m). All money in this account shall be expended solely for the 33
purposes of this title and for no other purposes whatsoever. 34
Contributions to this account shall accrue and become payable by each 35
employer, except employers as described in RCW 50.44.010 and 36
50.44.030 who have properly elected to make payments in lieu of 37
contributions, taxable local government employers as described in RCW 38
50.44.035, those employers who are required to make payments in lieu 39
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of contributions, those employers described under RCW 1
50.29.025(1)(d), and those qualified employers assigned rate class 20 2
or rate class 40, as applicable, under RCW 50.29.025, at a basic rate 3
of one one-hundredth of one percent. The amount of wages subject to 4
tax shall be determined under RCW 50.24.010. Any amount of 5
contributions payable under this subsection (1)(b) that exceeds the 6
amount that would have been collected at a rate of four one-7
thousandths of one percent must be deposited in the account created 8
in (a) of this subsection. 9
(2)(a) Contributions under this section shall become due and be 10
paid by each employer under rules as the commissioner may prescribe, 11
and shall not be deducted, in whole or in part, from the remuneration 12
of individuals in the employ of the employer. Any deduction in 13
violation of this section is unlawful. 14
(b) In the payment of any contributions under this section, a 15
fractional part of a cent shall be disregarded unless it amounts to 16
one-half cent or more, in which case it shall be increased to one 17
cent. 18
(3) If the commissioner determines that federal funding has been 19
increased to provide financing for the services specified in chapter 20
50.62 RCW, the commissioner shall direct that collection of 21
contributions under this section be terminated on the following 22
January 1st. 23
(4) During the 2023-2025 fiscal biennium, moneys in the account 24
in subsection (1)(a) of this section may be appropriated for poverty 25
reduction programs that coordinate employment, training, education, 26
and other existing systems designed to assist low-income individuals 27
attain self-sufficiency. 28
NEW SECTION. Sec. 23. Sections 1 through 18 of this act 29
constitute a new chapter in Title 50 RCW.30
NEW SECTION. Sec. 24. If any part of this act is found to be in 31
conflict with federal requirements that are a prescribed condition to 32
the allocation of federal funds to the state or the eligibility of 33
employers in this state for federal unemployment tax credits, the 34
conflicting part of this act is inoperative solely to the extent of 35
the conflict, and the finding or determination does not affect the 36
operation of the remainder of this act. Rules adopted under this act 37
must meet federal requirements that are a necessary condition to the 38
p. 21 HB 1773
receipt of federal funds by the state or the granting of federal 1
unemployment tax credits to employers in this state.2
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