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CERTIFICATION OF ENROLLMENT SUBSTITUTE SENATE BILL 5874 Chapter 43, Laws of 2026 69TH LEGISLATURE 2026 REGULAR SESSION UNEMPLOYMENT COMPENSATION—EMPLOYER REPORTING ERROR PENALTY WAIVER EFFECTIVE DATE: June 11, 2026 Passed by the Senate February 4, 2026 Yeas 49 Nays 0 DENNY HECK President of the Senate Passed by the House February 28, 2026 Yeas 94 Nays 0 LAURIE JINKINS Speaker of the House of Representatives CERTIFICATE I, Sarah Bannister, Secretary of the Senate of the State of Washington, do hereby certify that the attached is SUBSTITUTE SENATE BILL 5874 as passed by the Senate and the House of Representatives on the dates hereon set forth. SARAH BANNISTER Secretary Secretary Approved March 14, 2026 11:16 AM FILED March 16, 2026 BOB FERGUSON Governor of the State of Washington Secretary of State State of Washington SUBSTITUTE SENATE BILL 5874 Passed Legislature - 2026 Regular Session State of Washington 69th Legislature 2026 Regular Session By Senate Labor & Commerce (originally sponsored by Senator MacEwen) READ FIRST TIME 01/26/26. AN ACT Relating to employers' information reporting for purposes of unemployment compensation; and amending RCW 50.12.220. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON: Sec. 1. RCW 50.12.220 and 2020 c 334 s 3 are each amended to read as follows: (1) If an employer fails to file a timely report as required by RCW 50.12.070, or the rules adopted pursuant thereto, the employer is subject to a penalty of ((twenty-five dollars ))$25 per violation, unless the penalty is waived by the commissioner or subsection (2)(c)(ii) of this section applies. (2) An employer who files an incomplete or incorrectly formatted tax and wage report as required by RCW 50.12.070 must receive a warning letter for the first occurrence. The warning letter will provide instructions for accurate reporting or notify the employer how to obtain technical assistance from the department. Except as provided in subsections (3) and (4) of this section, for subsequent occurrences within five years of the last occurrence, the employer is subject to a penalty as follows: (a) When no contributions are due: For the second occurrence, the penalty is ((seventy-five dollars ))$75 ; for the third occurrence, the penalty is ((one hundred fifty dollars ))$150 ; and for the fourth occurrence and for each occurrence thereafter, the penalty is ((two hundred fifty dollars ))$250 . (b) When contributions are due: For the second occurrence, the penalty is ((ten ))10 percent of the quarterly contributions due, but not less than ((seventy-five dollars ))$75 and not more than ((two hundred fifty dollars ))$250 ; for the third occurrence, the penalty is ((ten ))10 percent of the quarterly contributions due, but not less than ((one hundred fifty dollars ))$150 and not more than ((two hundred fifty dollars ))$250 ; and for the fourth occurrence and each occurrence thereafter, the penalty is ((two hundred fifty dollars ))$250 . (c)(i) The commissioner may waive penalties for minor or insignificant reporting errors. For purposes of this section, "minor or insignificant reporting errors" includes, but is not limited to, inadvertent errors caused by the failure of any electronic software to properly produce a tax and wage report with the standard occupational classification or job title of each worker. (ii) An employer whose tax and wage report is incomplete due to a failure to report the standard occupational classification or job title of each worker must pay an incomplete report penalty under this subsection only if the employer knowingly failed to report the standard occupational classification or job title of each worker. (3) If an employer knowingly misrepresents to the employment security department the amount of his or her payroll upon which contributions under this title are based, the employer shall be liable to the state for up to ((ten ))10 times the amount of the difference in contributions paid, if any, and the amount the employer should have paid and for the reasonable expenses of auditing his or her books and collecting such sums. Such liability may be enforced in the name of the department. (4) If contributions are not paid on the date on which they are due and payable as prescribed by the commissioner, there shall be assessed a penalty of five percent of the amount of the contributions for the first month or part thereof of delinquency; there shall be assessed a total penalty of ((ten ))10 percent of the amount of the contributions for the second month or part thereof of delinquency; and there shall be assessed a total penalty of ((twenty ))20 percent of the amount of the contributions for the third month or part thereof of delinquency. No penalty so added shall be less than ((ten dollars ))$10 . These penalties are in addition to the interest charges assessed under RCW 50.24.040. (5) Penalties shall not accrue on contributions from an estate in the hands of a receiver, executor, administrator, trustee in bankruptcy, common law assignee, or other liquidating officer subsequent to the date when such receiver, executor, administrator, trustee in bankruptcy, common law assignee, or other liquidating officer qualifies as such, but contributions accruing with respect to employment of persons by a receiver, executor, administrator, trustee in bankruptcy, common law assignee, or other liquidating officer shall become due and shall be subject to penalties in the same manner as contributions due from other employers. (6) Where adequate information has been furnished to the department and the department has failed to act or has advised the employer of no liability or inability to decide the issue, penalties shall be waived by the commissioner. Penalties may also be waived for good cause if the commissioner determines that the failure to file timely, complete, and correctly formatted reports or pay timely contributions was not due to the employer's fault. (7) Any decision to assess a penalty as provided by this section shall be made by the chief administrative officer of the tax branch or his or her designee. (8) Nothing in this section shall be construed to deny an employer the right to appeal the assessment of any penalty. Such appeal shall be made in the manner provided in RCW 50.32.030. Passed by the Senate February 4, 2026. Passed by the House February 28, 2026. Approved by the Governor March 14, 2026. Filed in Office of Secretary of State March 16, 2026.
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