Shaken, Not Stirred

2025 Legislative and Board Legal Update

Chris Bishop, Kris Tefft, and Ryan Miller

2025 LEGISLATIVE UPDATES

1. GOOD FAITH AND FAIR DEALING (SENATE BILL 5463)

The duty of good faith and fair dealing applies to all workers’ compensation self- insurers and third-party administrators, rather than only self-insured municipal employers and self-insured private sector firefighter employers and their third-party administrators. L&I’s authority to withdraw a self-insurer’s certification when an employer has been found to have violated the self-insurer’s duty of good faith and fair dealing is modified. If L&I determines that a self-insurer has violated the duty of good faith and fair dealing two or more times within a three-year period, the director must impose corrective action against the self-insurer, which must include a period in probationary status. L&I must impose appropriate restrictions and changes that are necessary for preventing future violations, for which L&I must audit compliance for the term of the applicable corrective action. If the self-insurer is found to have committed a subsequent violation while subject to a corrective action, L&I must withdraw the self-insurer’s certification. Following the corrective action, L&I may withdraw the self-insurer’s certification based on an assessment of whether the self-insurer has complied with the terms of the corrective action or is likely to commit future violations of the duty of good faith and fair dealing. If a self-insurer, who has previously been subject to a corrective action, subsequently commits two or more violations within a two-year period, requiring a corrective action, and such action would occur within ten years of completing a prior corrective action and probationary period, L&I must withdraw the self-insurer’s certification. For purposes of determining the timing of violations, the director must use the date of the L&I’s order. Any subsequent L&I order, Board of Industrial Insurance Appeals, or courts affirming a violation occurred relates back to the date of the L&I’s order. Errors or delays that are inadvertent or minor are not considered violations of good faith and fair dealing.

2. L&I DECERTIFICATION AUTHORITY TO MANAGE CLAIMS (HOUSE BILL 1275) Eff. July 27, 2025

Provides L&I with the authority to administer and pay workers’ compensation injury claims when a self-insured employer has been decertified. It purports to ensure that injured workers still receive benefits, particularly following a recent change to the law directing L&I to decertify employers for violating a duty of good faith and fair dealing.

3. TIME LOSS/PTD MARITAL STATUS (HOUSE BILL 1788) Eff. July 1, 2026

This bill started out as an ambitious proposal to have the value of employer- provided health care benefits, when not otherwise continued by the employer during a period of disability, removed from the calculation of a worker’s wage at time of injury for time loss (TTD) and pension (PTD) purposes, and instead superimposed at 100 percent on top of the TTD and PTD monthly payment amount. Secondarily, the bill proposed to eliminate the differences in the TTD/PTD schedule of benefits between married and unmarried workers with dependents, where current law adds a five percent bump to the benefit rate for married claimants with dependents. Due to its staggering fiscal cost, the health care component of the bill was removed as the bill progressed through the process. At the end of the day, it passed with the marital status issue addressed, creating a new set of TTD/PTD percentages to be applied to married and unmarried claimants alike, depending on the number of dependents they have, ranging from the current 60 percent with no children, to 75 percent with six or more children. The law goes into effect July 1, 2026, and will require updating time loss payment systems in the meantime. It is unlikely the trade unions behind the push for full health care benefits will give up on this pursuit, and a bill reviving the issue is highly likely to return in 2026. In the interim, there are murmurs that the Department may convene a stakeholder group to discuss ways of addressing the coverage of health insurance during a period of workers’ comp disability.

4. PERSONNEL FILE (HOUSE BILL 1308)

Personnel Files. “Personnel file” includes the following records, if the employer creates such records: all job application records; all performance evaluations; all nonactive and closed disciplinary records; all leave and reasonable accommodation records; all payroll records; and all employment agreements.

The bill specifically does not create a retention schedule for records, require an employer to create personnel records, or supersede state or federal privacy laws regarding nondisclosure.

Private Employers. An employer not subject to the PRA, also referred to as a private employer, must provide a copy of a personnel file within 21 calendar days after the employee, former employee, or their designee requests the file. The copy must be provided at no cost to the employee, former employee, or their designee. A private employer must, within 21 calendar days of receiving a written request from a former employee or their designee, furnish a signed written statement to the former employee or their designee stating the effective date of discharge, whether the employer had a reason for the discharge, and if so, the reasons.

An employee or former employee may enforce the requirement for a private employer to disclose a personnel record and/or provide a written discharge statement through a private cause of action, which may include equitable relief, statutory damages, and reasonable attorneys’ fees and costs. Prior to bringing an action, the employee or former employee must give a notice of intent to sue to the private employer. The notice may be provided to the private employer with the initial request for a copy of the personnel file or later on. An employee or former employee may not commence a lawsuit until five calendar days have elapsed since sending the notice.

The statutory damages for each violation are: $250 if the complete personnel file or the statement is not provided within 21 calendar days of the request; $500 if the complete personnel file or the statement is not provided within 28 calendar days of the request; $1,000 if the complete personnel file or the statement is provided later than 35 calendar days of the request; and $500 for any other violations.

Public Employers. An employer subject to the PRA must provide a copy of the personnel file when requested by an employee, former employee, or their designee in accordance with the procedures and requirements set forth in the PRA.

5. UNEMPLOYMENT INSURANCE BENEFITS (SENATE BILL 5041)

If an individual is unemployed due to a strike, the individual may receive weekly benefits for no more than six calendar weeks. Any weekly benefits received unrelated to the individual’s unemployment due to a strike may not be counted toward the six calendar weeks.

6. PAID FAMILY AND MEDICAL LEAVE (HOUSE BILL 1213)

Benefits: The minimum claim period to qualify for benefits is reduced to four consecutive hours.

Premiums: The method by which the ESD calculates the size of an employer for purposes of premium requirements and grant eligibility is modified. On September 30 of each year, the ESD must average the number of employees reported by an employer on the last day of each quarter over the last four completed calendar quarters. The ESD Office of Actuarial Services must submit a report within 10 business days to the PFML Advisory Committee and the Legislature if it projects that a deficit in the Family and Medical Leave Insurance Account will not be recovered through the next quarterly premium collections.

Employment Protection: The standards for employment protection are modified. The employer size threshold is decreased over a three-year period, providing an eligible employee with protection if the employer has: 25 or more employees from January 1, 2026, to December 31, 2026; 15 or more employees from January 1, 2027, to December 31, 2027; and 8 or more employees on or after January 1, 2028.

The minimum hourly threshold for qualifying for employment protection is removed. Instead, to qualify for protection, an employee must have begun employment with their current employer for at least 180 calendar days before taking leave. This applies to both to employers participating in the PFML Program and to those opting to use approved voluntary plans.

Employment protection is extended to any period of unpaid leave protected by the FMLA where the employee was eligible for PFML Program benefits but did not apply for and receive those benefits, so long as the employer provides certain written notices to the employee. The written notices must include certain elements identified in the bill, including that the leave is counting against any permitted period of employment protection under the PFML Program and the FMLA, and that the use of unpaid leave does not affect the employee’s eligibility for benefits in the PFML Program.

Maximum periods of employment protection are established. Except by written agreement between the employer and employee or a bargaining unit, the employee forfeits the right to employment restoration if the employee does not exercise it upon the earlier of the: first scheduled work day following the period of leave; or first scheduled work day following a continuous period of, or combined intermittent periods of a total of, 16 typical workweeks of leave taken during a period of 52 consecutive calendar weeks, except this period is extended to 18 typical workweeks of leave during a period of 52 consecutive calendar weeks if any of the leave was taken as a result of a serious health condition with a pregnancy resulting in incapacity.

For leave extending certain periods, the employer must provide at least five business days advance written notice to the employee regarding the estimated expiration of employment protection and the date of the employee’s first scheduled work day.

Health Care Coverage: The requirement for employers to maintain health care coverage is expanded. Employers must maintain an employee’s health care coverage during any period of leave in the PFML Program in which the employee is also entitled to employment protection.

Enforcement: The ESD may conduct periodic audits of employer files and records for the purposes of assisting with and otherwise enforcing compliance. To that end, the ESD may require the employer to collect and report information on the exercise of employment protection rights.

BIIA 2024 SIGNIFICANT AND 2025 TENTATIVE DECISIONS

1. AGGRAVATION EVIDENCE REQUIREMENT (RCW 51.32.160)

In re Didier Lappin, BIIA Dec., 23 11489 (2024): Citing Price v. Dep’t of Labor & Indus., 101 Wn.2d 520, 528 (1984), and 6A Wash. Prac., WPI 155.09 (7th ed.), the Board held that because post-concussive syndrome is a psychiatric condition, a worker need not present objective evidence of worsening to prove a claim must be reopened.

a. “Because post-concussive syndrome only rarely lasts beyond two years and never gets worse, Dr. Panos’ opinion carries less weight when compared to the other testifying experts.”

b. “[B]ecause psychiatric conditions manifest through patient reports and behavior, workers cannot show worsening through objective 6 For that reason, a worker isn’t required to show mental health disability by objective medical evidence.7 Concussions are defined as brain injuries indetectible by imaging or other objective measures. So, post-concussive syndrome is a psychiatric condition with no objective means of validation.”

c. “Mr. Lappin’s claim-related post-concussive disorder has been stable or improved through the aggravation Both Mr. Lappin and his father believe that Mr. Lappin’s post-concussive disorder symptoms have been consistently bad since before the claim closed July 9, 2018.”

2. APPEALABLE ORDERS (INTERLOCUTORY ORDERS)

In re Karen Brawner, Order Granting Motion for Reconsideration in Part, and Granting Relief on the Record, BIIA Dec., 24 15585 (2024): The Department may pay benefits on a temporary basis only when it has issued no order in accordance with RCW 51.52.050. Where the Department has already issued an order allowing a claim, it cannot pay time-loss compensation on a temporary basis after that date.

a. “By law the Department may pay benefits on a temporary basis only so long as it has issued no order in accordance with RCW 51.52.050.” In re Kristen G. Rice, Dckt. No. 23 18828 (December 18, 2023), and In re Michael D. Johnson, Dckt. No. 23 24640 (May 7, 2024).

b. “The Department issued its first order in accordance with RCW 52.050 on January 5, 2023, when it allowed the claim. Accordingly, the Department lacked the authority to pay time-loss compensation on a temporary basis after January 5, 2023.”

3. ATTORNEY FEES AND COSTS RCW 51.32.185(9)(a) PTSD PRESUMPTION CASES

In re David James, Order Awarding Attorney Fees and Costs, BIIA Dec., 23 18856 (2023): When a determination involving the presumption established in RCW

51.32.185 is appealed to the Board and the final decision allows the claim for benefits, the Board shall order that all reasonable costs of the appeal, including attorney fees and witness fees, be paid to the firefighter, fire investigator, or law enforcement officer, or his or her beneficiary by the opposing party. In determining the attorney’s fee in such cases, there must be a nexus between the work and the appeal. The Board will use the date of the Department’s order as the trigger date for starting the attorney’s fee time attributable to the appeal. The Board will not order attorney’s fees for work performed before the date of the Department order on appeal.

a. “Although there is logic to this argument, we are confined by the Christiansen prohibition of attributing an attorney fee to activities before the Department. That prohibition prevents the type of analysis recommended by Mr. James. We decline the invitation to perform the analysis of which activities may have prompted the Department to issue the order from which the appeal was taken. We continue to use the date of the Department’s issuance of the relevant order that eventually prompted the appeal as the line of demarcation for awarding attorney fees.” Christiansen v. Dep’t of Labor & Indus., 26 Wn. App. 2d 560, 568 (2023).

b. “The employer essentially asserts an interpretation of ‘work performed before the Board’ as excluding any work prior to the filing of a notice of appeal. This restrictive interpretation is not required by the Christiansen decision. The court did not specifically define ‘work performed before the Board.’ We adhere to our holding that any work after the Department issues the order with content that is ultimately appealed can and should be considered ‘work before the Board.’”

4. COMMUNICATION OF DEPT. ORDER TO ATTENDING PROVIDER

In re Zachariah Roetcisoender, BIIA Dec., 23 14840 (2024): The Department issued an order in which it determined that it couldn’t reconsider its closing order because the worker’s protest was untimely. On appeal, the worker contended that the order never became final because it had not been mailed to a psychologist who treated him six times. Held: The psychologist wasn’t the worker’s attending provider. Citing Shafer v. Dep’t of Labor & Indus., 166 Wn.2d 710 (2009), the Board held that the order was properly communicated to the attending provider, Matthew Brown, D.O., and became final and binding when no protest or appeal was filed within 60 days of communication.

a. “We do not agree with the argument that the order was not properly communicated because the Department did not mail the order to Dr. Poppe, a psychologist who had six visits with Mr. Roetcisoender in 2020 and, as conceded by Mr. Roetcisoender, was not his attending physician.”

b. “RCW 52.050(1) requires the Department to ‘serve the worker, beneficiary, employer, or other person affected thereby,’ and the Department complied with this requirement when it mailed the 2021 closing order in this claim.”

5. VOCATIONAL REHABILITATION DETERMINATIONS AND PTD APPEALS (RCW 51.08.160)

In re Tesfai Ukbagergis, BIIA Dec., 09 20737 (2011): The worker filed an appeal from a Department order that closed the claim with a permanent partial disability award. The worker was seeking an industrial insurance pension. The Board found on the evidence that the worker was unemployable without formal vocational retraining.

Held: After the Department has determined that the worker is not permanently totally disabled, the worker’s “occupational retraining prognosis” is no longer a factor in determining whether the worker is permanently totally disabled. The worker’s burden doesn’t include proving that they wouldn’t be employable even if retrained. His burden was to prove that due to the industrial injury, he is permanently unable to obtain and perform any gainful employment on a reasonable continuous basis, in consideration of his age, education, and transferable skills.

a. “Mr. Ukbagergis was unable to participate in vocational services at that time because of subsequent, unrelated medical conditions, primarily a gastrointestinal condition. Dryden, who was then an intern, submitted a closing report with a code designating that vocational services should be closed because the worker was unable to benefit due to unaccepted conditions that arose after the industrial injury. . . In Ms. Dryden’s opinion, Mr. Ukbagergis was not employable when she closed vocational services in October of 2008, and it remained her opinion that he was not employable when the claim was closed in the absence of further vocational assistance.”

b. “Mr. Ukbagergis’ burden here did not include proving that he would not be employable even if retrained. His burden was to prove that due to the industrial injury he is permanently unable to obtain and perform any type of gainful employment on a reasonably continuous basis, in consideration of his age, education and transferrable skills.” Leeper v. Department of Labor & Indus., 123 Wn.2d. 803 (1994).

c. “Although Ukbagergis has the physical ability to work at a sedentary or light level, because of the industrial injury he has lost the ability, without some vocational retraining, to obtain or perform any type of gainful employment on a reasonably continuous basis.”

6. VOCATIONAL REHABILITATION DETERMINATIONS- STANDARD OF REVIEW

(RCW 51.08.160) In re Kaleo Neil, Order Vacating Proposed Decision and Order,

BIIA Dec., 23 10636 (2024): A decision about whether a worker turned down a return-to-work job offer isn’t a vocational decision subject to the abuse of discretion standard of review. The Director’s decision to assign a vocational counselor is subject to the abuse of discretion standard of review.

a. “To be sure, the decision to assign a vocational rehabilitation counselor to assess Mr. Neil’s ability to work was a vocational benefits determination as contemplated by RCW 51.32.095. But the determination as to the validity of the employer’s return-to-work offer must be reviewed on a preponderance of the evidence standard of review. The abuse of discretion standard was improperly applied in this case. To the extent this decision is inconsistent with In re Peter E. Reeves and In re Thomas L. Brantley Jr. they are overruled.”

b. “Because the parties argued the summary judgment motion and presented evidence within the parameters of an ‘abuse of discretion’ standard, and our judge applied this incorrect standard, the parties are entitled to an opportunity to supplement the record. We cannot conclude that the Department’s partial summary judgment motion was properly decided.”

7. POST-PENSION TREATMENT (RCW 51.36.010(4))

In re Kirtley Gardiner, BIIA Dec., 23 22640 (2024): The Board held that pursuant to RCW 51.36.010(4), only the supervisor of industrial insurance, and not the supervisor’s designee, may decide requests for post-pension treatment. A Department determination in writing without protest or appeal rights language is valid, but effectively has no deadline by which it must be challenged.

a. “Under the statute, the general rule is that treatment is not available after a worker is placed on a However, there is an exception that gives the supervisor of industrial insurance discretion to authorize continued treatment for industrially related conditions to protect a worker’s life and for non-narcotic pain relief. This exception only applies if the supervisor authorizes such continued treatment in writing and in advance. In In re Edward Green, we interpreted this language in RCW 51.36.010(4) to mean that treatment may only be authorized prospectively, not retrospectively.”

b. “[W]hile a pension adjudicator may indeed be considered the director’s designee, that does not mean a pension adjudicator has any authority under RCW 51.36.010(4). RCW 51.36.010(4) only refers to the ‘supervisor of industrial insurance.’ There is no language indicating that the supervisor can delegate that authority to anyone else, including a designee.”

c. “In strictly interpreting the exception contained RCW 36.010(4), we conclude that the phrase “supervisor of industrial insurance, solely in his or her discretion’ means that only the supervisor of industrial insurance, and not his or her designee, has the authority to make the decision whether or not to authorize continued medical treatment once a worker has been placed on the pension rolls.”

d. “[A] Department letter that does not contain protest or appeal language may be protested or appealed at any time. Here, the omission of the protest language in the Department letter has the effect of removing the 60-day deadline within which to protest or appeal the letter in order to avoid ”

8. GENERAL PROTESTS/REQUESTS FOR RECONSIDERATION (RCW 51.52.050)

In re Richard Ballard, BIIA Dec., No. 23 14950 (2024): The worker’s attorney filed a notice of appearance and protest to “any adverse orders” within 60 days. More than seven months after it issued a claim allowance order, the Department issued an order affirming claim allowance. The employer appealed. Held: The worker’s general protest didn’t reasonably put the Department on notice that the worker was requesting action inconsistent with claim allowance. And the Industrial Insurance Act doesn’t permit the Department to issue an affirming order five months after the claim allowance order had become final and binding.

a. Question: “Did the protest reasonably put the Department on notice that Ballard was seeking action inconsistent with the Department’s decision?”

b. “[T]he Department had authority to issue a further order only if one of the following circumstances existed: (1) a protest or request for reconsideration has been filed within 60 days of the date the order was communicated; (2) the Department, before the appeal deadline, asks for more evidence or further investigation; or (3) the Department, within the time limited for appeal, or within 30 days after receiving a notice of appeal, decides to change or reverse an order or to hold it in abeyance.”

c. “We find that Mr. Ballard’s generic protest did not reasonably put the Department on notice that its allowance order was being protested. Mr. Ballard filed the claim, and it is inconsistent that he would protest allowance of his claim.”

9. DEPARTMENT ORDER PROTESTS- TIME LOSS vs. WAGE ORDER

In re David Gheorghita, Dckt. No. 24 12743 (February 3, 2025): The employer’s protests to 14 time loss orders did not act as a protest to a wage order issued around the same time. The employer’s protests never indicated the employer was disagreeing with the wage information, nor did the employer list the date of the wage order as the date of the orders being protested. The wage order became final and binding because it was not timely protested or appealed by either the employer or the worker.

a. “In Boyd v. City of Olympia, [1 Wn. App. 2d 17, 30 (2017)] the court determined that if the Department receives a written document from a party that reasonably puts the Department on notice that the party is requesting an action that is inconsistent with the Department’s decision, then it is considered a Under Boyd, the content and the context of the written communication must be considered, but not the intent of the filing party.”

b. “The communications from the employer were not generic or blanket protests, but were very specific as to the dates of the time-loss compensation orders None of the protests mentioned the date of the wage order, July 19, 2023. Also, the thrust of each of the protests was a specifically dated payment/time-loss compensation order. The fact that the protests mention payment orders does not make them protests to the wage order.”