New Penalty Increases in Washington in Effect as of July 1, 2026
In 2020, the Legislature enacted a law increasing the statutory penalties for violations of workers’ compensation laws and providing for periodic adjustments for inflation, which are currently set to occur every (3) years. The first adjustment went into effect July 1, 2023 and therefore the next adjustment went into effect as of July 1, 2026. The new adjustment is set at 12.11%.
On the topic of penalties, penalty requests are typically submitted by a worker or their representative; however, it is important to note that the Department can review any claim for a penalty request without an external request. If you receive correspondence from the Department regarding consideration of a penalty assessment, there are ten (10) working days to respond to the Department. Once a response is submitted to the Department of Labor and Industries, an order will be issued within thirty (30) days.
If a penalty is assessed, the Department allows 14 calendar days to make payments. Additionally, proof of payment must be submitted to the Department in a timely manner and should be immediately submitted once paid. In submitting proof of payment, it is recommended to submit a copy of the Order and Notice with a copy of the payment ledger that clearly identifies the amount paid and the date remitted to ensure all necessary information is conveyed to the adjudicator. Please note, failure to pay an assessed penalty within 14 calendar days will be considered untimely. If a penalty is not paid timely, this may result in an additional penalty assessment pursuant to RCW 51.48.017 and WAC 296-15-266.
To review the updated Department chart that lists all penalties that have an inflationary adjustment along with the current penalty amount and the adjustments, please visit: Penalty Assessment Chart Effective July 1, 2026. Notably, the penalty for a self-insured employer delaying or refusing to pay benefits has increased from the greater of $1,161 or 25% of the amount due or each underpayment made to the claimant to the greater of $1,301 or 25% of the amount due or each underpayment made to the claimant. Therefore, it is crucial to review the inflationary adjustments and ensure compliance accordingly.
In determining the penalty calculation, pursuant to RCW 51.48.017 and WAC 296-15-268, the Department weighs at least the following factors:
- The amount of any payment delayed;
- Employer communication of the basis for/or calculation of the payment;
- History or past practice of underpayments by the employer;
- Whether the Department has issued an Order directing the payment;
- Any required adjustments to the amount of the payment;
- Number of unaddressed requests for action to be taken by the employer or third-party administrator made by the Department, worker/beneficiary, or provider.
If you have any questions regarding the new adjustments effective July 1, 2026 or if a penalty is assessed and you need assistance in reviewing the Department Order and/or filing a dispute to an assessed penalty, please do not hesitate to contact our office. You can contact me at (503) 595-6106 or .
Posted by Allison Harper.
