The unemployment insurance (UI) system, administered by the Employment Security Department, is designed to provide partial wage replacement for unemployed workers. A worker is eligible to receive UI benefits if he or she: worked at least 680 hours in covered employment in his or her base year, was separated from employment through no fault of his or her own or quit work for good cause, is able to work, and is actively searching for work. Eligible workers can receive up to 26 weeks of UI benefits in a benefit year. The weekly benefit amount is calculated based on the eligible worker's earnings in the prior base year and then adjusted based on a statutory formula. The current maximum weekly benefit amount is $1,152.
The Employment Security Department's rules provide that a worker is considered to have been separated from employment through no fault of his or her own if the worker volunteers to participate in an employer-initiated layoff or reduction in force plan. However, the following steps must be taken:
State courts have found that the requirement for the employer to take the final action in the separation process applies broadly, effectively prohibiting benefits if the employer does not retain final authority to choose which volunteers it ultimately terminates or if an employee is allowed to rescind his or her offer.
The bill modifies the steps required for a worker to retain UI eligibility when voluntarily participating in an employer-initiated layoff or reduction in force plan by removing the requirement that the employer take "the final action" in the separation process. Instead, for claims on or after June 14, 2026, the separating employer need only terminate the person's employment as a result of the employer's layoff or reduction in force plan. The separating employer may allow an employee to rescind an offer, and allowing this option does not disqualify a person from UI benefits.
(In support) This bill is an effort to clarify ambiguous language in an agency rule. While current law and administrative rules allow for workers to receive UI benefits when voluntarily participating in an employer-initiated layoff or reduction in force plan, courts have disqualified workers for benefits on the basis of a worker having the option to rescind their participation. The courts are broadly interpreting the phrase "final action." This has been baffling to both employers and workers, who were operating with the belief that the worker would be eligible for UI benefits. In fact, there have been instances where workers were incentivized to volunteer for a layoff while being told they would qualify for UI benefits, only then to be denied benefits. The personal financial consequences were catastrophic. The bill primarily codifies the existing agency rule while addressing the ambiguity causing these issues. This bill ensure that workers who voluntarily opt in to an employer-initiated layoff plan will receive UI benefits.
(Opposed) None.
(Other) If a worker is receiving severance or retirement, particularly a large payout from an employer, it should be taken into account when determining eligibility and benefit calculations. The state should closely examine impacts of this bill and other bills on the solvency of the UI Trust Fund. The state should ensure that a worker who is laid off as a result of a business closure is properly cared for in the UI system.
(In support) Representative Liz Berry, prime sponsor; Rory O'Sullivan, Washington Employment Benefits Advocates; Timothy Fiser; Anne Paxton, Unemployment Law Project; and Anne Paxton.