Senate bill would let ESD waive minor payroll-reporting penalties for employers
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Summary
Substitute SB 58-74 would let the Employment Security Department waive penalties for minor or inadvertent errors in quarterly unemployment-insurance payroll reports, a change sponsors say would protect small businesses that have been assessed fines tied to job-coding errors.
A Washington Senate committee heard testimony on substitute Senate Bill 58-74 on Feb. 18, which would permit the Employment Security Department to waive penalties for minor or inadvertent errors on employers’ quarterly unemployment-insurance payroll reports. The change is aimed at small businesses that prosecutors and sponsors say have paid disproportionate fines for administrative mistakes.
Sen. Drew McKeown (35th District), the bill’s prime sponsor, told the Labor and Workplace Standards Committee the proposal grew from a constituent complaint and is intended to give small employers a way to correct job-coding or other technical errors without automatic fines. "A lot of small businesses will do it early ... and if you make a small administrative error ... there's no way to go back and fix that error," McKeown said, adding the fines had totaled roughly $2,500,000 through the third quarter last year.
Staff briefing materials explained current law requires employers to file quarterly reports with ESD listing employee names, wages, hours worked and standard occupational classifications; penalties ranging from $75 to $250 apply for second or subsequent violations, with higher penalties when the error appears on a report tied to contribution payments. The staff summary said a penalty applies for failing to report a standard occupational classification or job title only if the employer committed the violation knowingly.
Under substitute SB 58-74, ESD would have authority to waive penalties for minor or insignificant reporting errors, including inadvertent errors resulting from software failures that incorrectly produce required job-classification fields. Committee members did not take a vote; the public hearing closed after sponsor remarks and there was no testimony in opposition on record.
The bill now awaits further committee action; if advanced by the committee, it would move to subsequent floor consideration and fiscal review as needed.