When the Washington State Legislature wrapped up its 2025 session April 27, the state’s labor movement could look back on a season of both wins and disappointments.
Policy legislation mostly took a back seat over the 105-day session as the Democratic-led legislature spent most of its time grappling with a forecasted $16 billion budget shortfall. The solution they crafted combined budget cuts and revenue increases.
The state budget
The legislature rejected Democratic Governor Bob Ferguson’s call for an unpaid one-day-a-month furlough of 75,000 state employees. Washington State Labor Council, the state federation of unions, counts that as a win. But lawmakers still moved forward with $5.9 billion in budget cuts over the next four years, including curtailing the planned expansion of an early childhood education program. Budget writers did reject a proposed one-third budget cut to the Harry Bridges Center for Labor Studies at University of Washington and a threatened cut to the Washington State Labor Education and Research Center. And they appropriated funds to pay for 5% pay increases for state employees that were negotiated with the Washington Federation of State Employees. They also funded increases for their own legislative aides that were negotiated in a first-ever union collective bargaining agreement. But they failed to fund increases that were negotiated by the Washington Public Employees Association for another 5,000 state employees, leaving pay frozen for those workers.
New revenues
On the revenue side, lawmakers shrank from enacting audacious long-term proposals like a wealth tax or a high-earners payroll tax. A proposed wealth tax did pass the state senate but didn’t get a vote in the house. But lawmakers did expand a new capital gains tax. They raised the gas tax 6 cents a gallon as of July 1 to fund road work. They approved extra surcharges for businesses with more than $250 million in taxable state income. And they made modest increases in the business and occupation (B&O) tax. The B&O tax is a gross receipts tax that up to now has ranged from 0.138% to 1.76%, depending on the industry. Taken together the revenue increases will add an estimated $9.3 billion in revenue over the next four years. Bigger fixes for Washington revenues will have to wait for bolder legislators.
“From our view, there’s a structural revenue problem,” said Sarah Tucker, spokesperson for the Washington State Labor Council, the state federation of unions. “Washington state relies heavily on sales tax and property tax. Sales tax is wildly volatile. If people spend less money, we take in significantly less revenue. And it’s a tax code that’s completely out of touch with the actual economy we have now in 2025. It’s a tax code from over 100 years ago. Washington’s economy now is mostly service based, and we don’t have a lot of taxes on that. We don’t tax income, and we do not in a meaningful way tax the ultra wealthy. We don’t tax businesses at a very high rate. And the result is that we have incredibly wealthy individuals and some of the biggest companies, with some of the biggest profits anywhere in the world, but our tax system doesn’t capture those dollars.”
Labor policy wins
Despite the focus on the budget, Democratic majorities did move the ball forward for workers with a handful of policy bills. Here are some of the session’s most important actions on labor issues:
- Make strikers eligible for unemployment benefits Senate Bill 5041 passed the finish line heavily watered down, but it gives unemployment benefits to striking workers and could still be a game changer when it comes to the dynamics of collective bargaining. Up to now, workers on strike haven’t been eligible for unemployment benefits in Washington. But starting January 1, 2026, they’ll be eligible for up to six weeks of benefits after a two-week waiting period. Two weeks of no pay will still be a major sacrifice for workers, so don’t expect the new law to lead to a rash of reckless strikes. Washington’s unemployment benefits replace about 50% of wages. The knowledge that strikers will have that support may restrain employers who might otherwise hope to get concessions by starving out union workers. The bill applies to public sector workers too, but only those whose strikes are deemed “lawful.” Washington state law isn’t totally clear on whether teacher strikes are lawful, so if and when courts order teachers back to work, they would have to repay any employment benefits they received. Despite setbacks, persistent advocacy from State Senator Marcus Riccelli (D-Spokane) helped get the bill across the finish line. One of the concessions advocates made to get the bill passed was that it sunsets in 10 years, but lawmakers will also be able to look at the results of an economic impact study when they discuss renewal.
- Limit rent increases Following Oregon’s lead, Washington passed a statewide limit on the amount residential landlords can raise the rent in any given year — 7% plus inflation, or 10%, whichever is lower. Landlords will also have to give 90 days notice of increases, and can’t raise the rent during the first year of a tenancy. New construction is exempt for up to 12 years from the limit. Owner-occupied properties like duplexes or homes with accessory dwelling units are also exempt.
- Safer jobs for underage workers HB 1644 increases penalties for violating youth labor laws. It requires the Washington Department of Labor and Industries (L&I) to revoke a company’s minor work permit and bar them from public contracting if their actions cause the death or serious injury of an underage worker. And it requires safety inspections on job sites before minors can be employed there. It was motivated in part by the case of a Southwest Washington teen employed by construction contractor Rotschy who lost his legs in a grisly workplace accident in 2023.
- Good faith and fair dealing in workers comp. It’s fairly wonky, but one of the more important new laws passed this session could restrain abuses in Washington’s workers comp system. Washington offers state-sponsored workers compensation insurance to employers, but it also allows certain employers to self-insure. The problem is, worker advocates say, that creates too great an incentive to deny claims. Last year, legislators passed a law requiring self-insured municipal employers to adopt a standard of “good faith and fair dealing” when it comes to claims, and if they violate that duty, for example coercing a worker to accept less than the compensation they’re due, L&I can decertify their right to self-insure. SB 5463, which passed this session, extends that to self-insured private sector employers as well, and gives L&I the authority to look for problems when an employer consistently pays less in claims than a comparable employer that’s not self-insured.
- Union rights for cannabis growers HB 1141 extends collective bargaining rights to workers who cultivate, harvest and process cannabis, to be overseen by the same state agency that administers public employee collective bargaining law. It’s an important win considering that other agricultural workers do not have collective bargaining rights.
A bad idea defeated
Lawmakers rejected a proposal from State Senator June Robinson (D-Everett) to strip state employees of the right to bargain over health coverage.
Better luck next time?
A number of union-backed proposals failed to progress in the legislature this year. Some are likely to come back for consideration in the next legislative session, which starts in January 2026. That’s a short 60-day session, but lawmakers won’t have their attention monopolized by a need to craft a two-year budget. Here are some of the bills that died in committee this year:
- A bill to raise the minimum wage to $25 an hour and mandate paid vacation;
- A bill to streamline permitting and construction of energy transmission lines;
- A bill to rein in the overuse of self-checkout by grocery stores;
- A bill to create a workforce standard board to set minimum compensation and working conditions in the childcare industry.
