Requires the department of labor and industries to: (1) Implement an improvement plan to continuously improve the state's workers' compensation system;

(2) Apply to the Washington state quality award or a similar Baldrige assessment organization for a full Baldrige assessment;

(3) Develop a statewide worker safety and workers' compensation performance improvement plan and a performance dashboard grading program; and

(4) Recognize annually with the governor's workplace safety award the employers, by industry, that are the safest and the most improved with respect to safety and cost.

Requires the state auditor to conduct an audit of the department of labor and industries' workers' compensation and occupational safety and health performance measures, strategic plan, government management and accountability performance, lean implementation plan, and other major processes.