(1) All self-insured municipal employers and self-insured private sector firefighter employers and their third-party administrators have a duty of good faith and fair dealing to workers relating to all aspects of this title. The duty of good faith requires fair dealing and equal consideration for the worker's interests.

(2) A self-insured municipal employer or self-insured private sector firefighter employer or their third-party administrator violates its duty to the worker if it coerces a worker to accept less than the compensation due under this title, or otherwise fails to act in good faith and fair dealing regarding its obligations under this title.

(3) The department shall adopt by rule additional applications of the duty of good faith and fair dealing as well as criteria for determining appropriate penalties for violations. In adopting a rule under this subsection, the department shall consider, among other factors, recognized and approved claim processing practices within the insurance industry, the department's own experience, and the industrial insurance and insurance laws and rules of this state.

(4) The department shall investigate each alleged violation of this section upon the filing of a written complaint or upon its own motion. After receiving notice and a request for a response from the department, the municipal employer or private sector firefighter employer or their third-party administrator may file a written response within 10 working days. If the municipal employer or private sector firefighter employer or their third-party administrator fails to file a timely response, the department shall issue an order based on available information.

(5) The department shall issue an order determining whether a violation of this section has occurred, in conformance with RCW 51.52.050, within 30 calendar days of receipt of a complete complaint or its own motion. An order finding that a violation has occurred must also order the municipal employer or private sector firefighter employer to pay a penalty of one to 52 times the average weekly wage at the time of the order, depending upon the severity of the violation, which accrues for the benefit of the worker.

(6) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

(a) "Municipal" means any counties, cities, towns, port districts, water-sewer districts, school districts, metropolitan park districts, fire districts, public hospital districts, regional fire protection service authorities, education service districts, or such other units of local government.

(b) "Private sector firefighter employer" means any private sector employer who employs over 50 firefighters, including supervisors, on a full-time, fully compensated basis as a firefighter of the employer's fire department, only with respect to their firefighters.

Application—2023 c 293: "This act applies to all claims regardless of the date of injury." [ 2023 c 293 s 6.]

Effective date—2023 c 293: "This act takes effect July 1, 2024." [ 2023 c 293 s 7.]

(1) All self-insured employers and third-party administrators have a duty of good faith and fair dealing to workers relating to all aspects of this title. The duty of good faith requires fair dealing and equal consideration for the worker's interests.

(2) An employer or third-party administrator violates its duty to the worker if it coerces a worker to accept less than the compensation due under this title, or otherwise fails to act in good faith and fair dealing regarding its obligations under this title.

(3) The department shall adopt by rule additional applications of the duty of good faith and fair dealing as well as criteria for determining appropriate penalties for violations. In adopting a rule under this subsection, the department shall consider, among other factors, recognized and approved claim processing practices within the insurance industry, the department's own experience, and the industrial insurance and insurance laws and rules of this state.

(4) The department shall investigate each alleged violation of this section upon the filing of a written complaint or upon its own motion. After receiving notice and a request for a response from the department, the employer or third-party administrator may file a written response within 10 working days. If the employer or third-party administrator fails to file a timely response, the department shall issue an order based on available information.

(5) The department shall issue an order determining whether a violation of this section has occurred, in conformance with RCW 51.52.050, within 30 calendar days of receipt of a complete complaint or its own motion. An order finding that a violation has occurred must also order the employer to pay a penalty of one to 52 times the average weekly wage at the time of the order, depending upon the severity of the violation, which accrues for the benefit of the worker.

(6)(a) If the department determines that a self-insurer has violated the duty of good faith and fair dealing in this section two or more times within a three-year period, the director must impose corrective action against the self-insurer in accordance with the requirements in this subsection and RCW 51.14.095, which must include a period in probationary status. The department must impose appropriate restrictions and changes that are necessary for preventing future violations, for which the department 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, the department must withdraw the self-insurer's certification under RCW 51.14.080. Following the corrective action, the department may withdraw the self-insurer's certification under RCW 51.14.080 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.

(b) If a self-insurer who has previously been subject to a corrective action under (a) of this subsection subsequently commits two or more violations within a two-year period, requiring a corrective action under (a) of this subsection, and such action would occur within 10 years of completing a prior corrective action and probationary period under this subsection, the department must withdraw the self-insurer's certification under RCW 51.14.080.

(c) For purposes of determining the timing of violations for the requirements in this subsection, the director must use the date of the department's order. Any subsequent order of the department, board of industrial insurance appeals, or courts affirming a violation occurred relates back to the date of the department's order.

(7) Errors or delays that are inadvertent or minor are not considered violations of good faith and fair dealing.

Application—Effective date—2025 c 338: See notes following RCW 51.14.080.

Application—2023 c 293: "This act applies to all claims regardless of the date of injury." [ 2023 c 293 s 6.]

Effective date—2023 c 293: "This act takes effect July 1, 2024." [ 2023 c 293 s 7.]