Washington Senate Bill 5041 Expands Unemployment Benefits to Striking and Locked-Out Workers

Washington recently became the third state in the nation—joining New York and New Jersey—to offer unemployment benefits to workers on strike or locked out by their employers. Under the newly signed Senate Bill 5041, eligible workers will be able to access up to six weeks of unemployment benefits starting January 1, 2026. The law also addresses how unemployment benefits affect employer experience rating accounts. The law also includes a 10-year sunset clause, requiring lawmakers to revisit the program change in 2036. 

Existing Law

Under existing law, eligible Washington workers may receive unemployment benefits for up to 26 weeks, following a mandatory one-week waiting period. To qualify for these unemployment insurance benefits, workers must have worked at least 680 hours during their base year and earned some wages in Washington within the past 18 months, with limited exceptions (such as recent federal or military employment). In addition, workers must: (1) have lost their job through no fault of their own (e.g., layoffs, certain voluntary quits with good cause); (2) be physically able and available to work; and (3) actively search for work each week they claim benefits, meeting specific job search activity requirements.  

Prior to passage of Senate Bill 5041, however, workers were specifically disqualified from receiving benefits if the unemployment was due to a strike or lockout. 

New Law: Expanded Unemployment Benefits for Striking and Locked-Out Workers

Washington’s Senate Bill 5041 marks a major shift in labor policy, extending unemployment insurance benefits to workers affected by labor disputes—whether they strike or are locked out by their employer. Striking workers and locked out workers are now eligible for unemployment benefits under specific conditions:

Who is Covered?

• Striking Workers: Those who voluntarily stop working as part of a labor dispute.
• Locked-Out Workers: Those who are barred from working by their employer during a labor dispute.
• The other requirements of existing law (being able to work and actively searching for work) are not waived. 

When Do Benefits Start? 

• For striking workers, the disqualification period ends (i.e., benefits become available) on the second Sunday after the strike begins or the date the strike is terminated, whichever is earlier. The standard one-week waiting period applies after the disqualification period ends.
• For locked out workers, the standard one-week waiting period applies (so the disqualification period for striking workers is not applicable).

How Long Do Benefits Last?

• Eligible striking workers can receive up to six weeks of unemployment benefits.
• Eligible locked out workers can receive up to 26 weeks of unemployment benefits. 

How Are Employers Affected?

• Benefits are charged to the employer’s experience rating account, unless they are later deemed improper.
• If a court later rules the strike was unlawful, workers must repay any benefits received. To avoid liability, employers must obtain a final court judgment declaring a strike unlawful—not just a temporary order.
• If the employer provides retroactive wages for weeks when benefits were paid, the Employment Security Department (ESD) will issue an overpayment assessment against the employee to recover those funds as provided in the Revised Code of Washington section 51.20.190. 

Mediation Services

When unemployment benefits are issued due to a strike, ESD is required to inform the employer of mediation services available through the Public Employment Relations Commission.  

Voluntary Contribution Program

If an employer that pays into the unemployment insurance system is charged benefits due to a strike, ESD will assess whether the employer qualifies to make a voluntary payment to the Unemployment Insurance Trust Fund. This option allows employers to reduce the impact on their experience rating by using the voluntary contributions to offset the benefit charges. 

Annual Report

The law requires the ESD to submit an annual report to the legislature with data on the number of strikes occurring in the state and their impact on the Unemployment Insurance Trust Fund, which is funded by a tax on employers. The first report is due by December 31, 2026. 

Sunset Provision

The provisions of this law are set to expire on December 31, 2035. In 2036, the legislature is required to review the policy and determine whether to renew, amend, or allow the law to lapse.

Takeaway for Employers

Employers with union employees in Washington may face increased unemployment insurance costs, especially if strikes become more frequent or prolonged. Employers whose workers strike will see those benefits charged to their accounts, potentially raising their experience rating and future unemployment insurance tax rates—unless they participate in the Voluntary Contribution Program to offset the charges. Employers should consider how this benefit may impact labor negotiations.

Employers should also stay informed about how ESD will implement and interpret the law, especially regarding claimant eligibility (e.g., availability for work, job search requirements), which the law does not fully clarify.