Currently, striking workers are ineligible for unemployment insurance (UI) benefits in Washington. SB 5777 would make striking workers eligible for UI at the earlier of the Sunday following the first day of the strike or the date the strike ends. Additionally, under current law, employees who are represented by a multi-employer bargaining unit are ineligible for UI in the event of a lockout (under certain circumstances). SB 5777 would make those employees eligible as well.

SHB 1893 is the same as SB 5777, except striking workers would be eligible for UI at the earlier of the second Sunday following the beginning of the strike.

Unfortunately, the fiscal notes for these bills downplay the potential economic impact of these provisions. With UI, the cost is not to general government coffers but to the dedicated UI trust fund and the payroll tax that is paid by employers. The fiscal notes are silent about how these provisions could impact the UI trust fund and UI taxes.

The UI system is funded by a payroll tax, which applies to wages up to $68,500 in 2024. (This taxable wage base is adjusted annually based on the state average wage and it is the highest in the country.) The tax rate for an employer is the sum of the experience tax, the social tax, and the solvency tax. The experience tax is based on the UI benefits that are charged to the employer’s account. The social tax covers benefits that are not charged to a specific employer. The solvency tax is in place only when the UI trust fund balance cannot cover seven months of benefits. (Legislation in 2021 suspended the solvency surcharge for 2021 through 2025.)

If striking workers are made eligible for UI, it would be a significant change from current practice. First, the UI statute, adopted in 1937, specifies that the system is “to be used for the benefit of persons unemployed through no fault of their own.” Contrary to that, it is a choice to go on strike. Second, to be eligible for UI one must be unemployed, but striking workers return to their jobs when the strike is over. Third, generally one has to be actively looking for work to receive benefits, but the fiscal notes for these bills note that they are not clear about whether work searches would be required for striking employees.