CERTIFICATION OF ENROLLMENT
SUBSTITUTE HOUSE BILL 1521
Chapter 293, Laws of 2023
68th Legislature
2023 Regular Session
WORKERS' COMPENSATION CLAIMS—DUTIES OF SELF-INSURED EMPLOYERS AND
THIRD-PARTY ADMINISTRATORS
EFFECTIVE DATE: July 1, 2024
Passed by the House April 22, 2023 CERTIFICATE
Yeas 84 Nays 14
I, Bernard Dean, Chief Clerk of the
House of Representatives of the
LAURIE JINKINS State of Washington, do hereby
Speaker of the House of certify that the attached is
Representatives SUBSTITUTE HOUSE BILL 1521 as
passed by the House of
Representatives and the Senate on
the dates hereon set forth.
Passed by the Senate April 20, 2023
Yeas 29 Nays 19
BERNARD DEAN
DENNY HECK Chief Clerk
President of the Senate
Approved May 4, 2023 3:19 PM FILED
May 5, 2023
Secretary of State
JAY INSLEE State of Washington
Governor of the State of Washington
SUBSTITUTE HOUSE BILL 1521
AS AMENDED BY THE SENATE
Passed Legislature - 2023 Regular Session
State of Washington 68th Legislature 2023 Regular Session
By House Labor & Workplace Standards (originally sponsored by
Representatives Bronoske, Stonier, Wylie, Berry, and Pollet)
READ FIRST TIME 02/16/23.
1 AN ACT Relating to industrial insurance self-insured employer and
2 third-party administrator penalties and duties; amending RCW
3 51.48.080, 51.48.017, and 51.14.080; adding new sections to chapter
4 51.14 RCW; creating a new section; prescribing penalties; and
5 providing an effective date.
6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
7 Sec. 1. RCW 51.48.080 and 2020 c 277 s 6 are each amended to
8 read as follows:
9 (1) Every person, firm, or corporation who violates or fails to
10 obey, observe, or comply with any statutory provision of this ((act))
11 title or rule of the department promulgated under authority of this
12 title, shall be subject to a penalty of not to exceed ((one thousand
13 dollars)) $1,000.
14 (2) The department may, for a violation of section 3 of this act,
15 assess a penalty not to exceed three times the penalties provided in
16 subsection (1) of this section, including adjustments pursuant to RCW
17 51.48.095.
18 Sec. 2. RCW 51.48.017 and 2020 c 277 s 2 are each amended to
19 read as follows:
p. 1 SHB 1521.SL
1 (1) Every time a self-insurer unreasonably delays or refuses to
2 pay benefits as they become due, the self-insurer shall pay a penalty
3 not to exceed the greater of ((one thousand dollars)) $1,000 or
4 ((twenty-five)) 25 percent of: (a) The amount due or (b) each
5 underpayment made to the claimant. For purposes of this section, "the
6 amount due" means the total amount of payments due at the time of the
7 calculation of the penalty.
8 (2) In making the determination of the penalty amount, the
9 department shall weigh at least the following factors: The amount of
10 any payment delayed, employer communication of the basis for or
11 calculation of the payment, history or past practice of underpayments
12 by the employer, department orders directing the payment, and any
13 required adjustments to the amount of the payment.
14 (3) The director shall issue an order determining whether there
15 was an unreasonable delay or refusal to pay benefits and the penalty
16 amount owed within ((thirty)) 30 days upon the request of the
17 claimant. Such an order shall conform to the requirements of RCW
18 51.52.050.
19 (4) The penalty shall accrue for the benefit of the claimant and
20 shall be paid to the claimant with the benefits which may be assessed
21 under this title.
22 (5) The department may, for a violation of section 3 of this act,
23 assess a penalty not to exceed three times the penalties provided in
24 subsection (1) of this section, including adjustments pursuant to RCW
25 51.48.095.
26 (6) This section applies to all requests for penalties made after
27 September 1, 2020.
28 NEW SECTION. Sec. 3. A new section is added to chapter 51.14
29 RCW to read as follows:
30 (1) All self-insured municipal employers and self-insured private
31 sector firefighter employers and their third-party administrators
32 have a duty of good faith and fair dealing to workers relating to all
33 aspects of this title. The duty of good faith requires fair dealing
34 and equal consideration for the worker's interests.
35 (2) A self-insured municipal employer or self-insured private
36 sector firefighter employer or their third-party administrator
37 violates its duty to the worker if it coerces a worker to accept less
38 than the compensation due under this title, or otherwise fails to act
p. 2 SHB 1521.SL
1 in good faith and fair dealing regarding its obligations under this
2 title.
3 (3) The department shall adopt by rule additional applications of
4 the duty of good faith and fair dealing as well as criteria for
5 determining appropriate penalties for violations. In adopting a rule
6 under this subsection, the department shall consider, among other
7 factors, recognized and approved claim processing practices within
8 the insurance industry, the department's own experience, and the
9 industrial insurance and insurance laws and rules of this state.
10 (4) The department shall investigate each alleged violation of
11 this section upon the filing of a written complaint or upon its own
12 motion. After receiving notice and a request for a response from the
13 department, the municipal employer or private sector firefighter
14 employer or their third-party administrator may file a written
15 response within 10 working days. If the municipal employer or private
16 sector firefighter employer or their third-party administrator fails
17 to file a timely response, the department shall issue an order based
18 on available information.
19 (5) The department shall issue an order determining whether a
20 violation of this section has occurred, in conformance with RCW
21 51.52.050, within 30 calendar days of receipt of a complete complaint
22 or its own motion. An order finding that a violation has occurred
23 must also order the municipal employer or private sector firefighter
24 employer to pay a penalty of one to 52 times the average weekly wage
25 at the time of the order, depending upon the severity of the
26 violation, which accrues for the benefit of the worker.
27 (6) The definitions in this subsection apply throughout this
28 section unless the context clearly requires otherwise.
29 (a) "Municipal" means any counties, cities, towns, port
30 districts, water-sewer districts, school districts, metropolitan park
31 districts, fire districts, public hospital districts, regional fire
32 protection service authorities, education service districts, or such
33 other units of local government.
34 (b) "Private sector firefighter employer" means any private
35 sector employer who employs over 50 firefighters, including
36 supervisors, on a full-time, fully compensated basis as a firefighter
37 of the employer's fire department, only with respect to their
38 firefighters.
p. 3 SHB 1521.SL
1 Sec. 4. RCW 51.14.080 and 1986 c 57 s 7 are each amended to read
2 as follows:
3 (1) Certification of a self-insurer shall be withdrawn by the
4 director upon one or more of the following grounds:
5 (((1))) (a) The employer no longer meets the requirements of a
6 self-insurer; or
7 (((2))) (b) The self-insurer's deposit is insufficient; or
8 (((3))) (c) The self-insurer intentionally or repeatedly induces
9 employees to fail to report injuries, induces claimants to treat
10 injuries in the course of employment as off-the-job injuries,
11 persuades claimants to accept less than the compensation due, or
12 unreasonably makes it necessary for claimants to resort to
13 proceedings against the employer to obtain compensation; or
14 (((4))) (d) The self-insurer habitually fails to comply with
15 rules and regulations of the director regarding reports or other
16 requirements necessary to carry out the purposes of this title; or
17 (((5))) (e) The self-insurer habitually engages in a practice of
18 arbitrarily or unreasonably refusing employment to applicants for
19 employment or discharging employees because of nondisabling bodily
20 conditions; or
21 (((6))) (f) The self-insurer fails to pay an insolvency
22 assessment under the procedures established pursuant to RCW
23 51.14.077; or
24 (g)(i) For a self-insured municipal employer, the self-insurer
25 has been found to have violated the self-insurer's duty of good faith
26 and fair dealing three times within a three-year period.
27 (ii) For purposes of determining whether there have been three
28 violations within a three-year period, the director must use the date
29 of the department's order. Any subsequent order of the department,
30 board of industrial insurance appeals, or courts affirming a
31 violation occurred relates back to the date of the department's
32 order.
33 (iii) Errors or delays that are inadvertent or minor are not
34 considered violations of good faith and fair dealing for purposes of
35 this subsection (1)(g).
36 (2) The director may delay withdrawing the certification of the
37 self-insured municipal employer while the employer has an enforceable
38 contract with a licensed third-party administrator that may not be
39 legally terminated. However, the self-insured municipal employer may
40 not renew or extend the contract.
p. 4 SHB 1521.SL
1 (3) For the purposes of this section, "municipal" has the same
2 meaning as defined in section 3 of this act.
3 NEW SECTION. Sec. 5. A new section is added to chapter 51.14
4 RCW to read as follows:
5 Nothing in this act shall be interpreted as allowing a private
6 cause of action outside of the original jurisdiction of the
7 department to assess penalties and rights to appeal as provided in
8 this title.
9 NEW SECTION. Sec. 6. This act applies to all claims regardless
10 of the date of injury.
11 NEW SECTION. Sec. 7. This act takes effect July 1, 2024.
Passed by the House April 22, 2023.
Passed by the Senate April 20, 2023.
Approved by the Governor May 4, 2023.
Filed in Office of Secretary of State May 5, 2023.
--- END ---
p. 5 SHB 1521.SL
Statutes affected: Original Bill: 51.48.080, 51.48.017
Substitute Bill: 51.48.080, 51.48.017
Bill as Passed Legislature: 51.48.080, 51.48.017, 51.14.080
Session Law: 51.48.080, 51.48.017, 51.14.080