Gov. Bob Ferguson recently signed off on the first legislative session of his first term—passing a $9.4 billion budget, with historic tax increases and programmatic cuts for the 2025-2027 biennium. A batch of new laws are set to go into effect in July, including changes to labor laws, immigration protections, and new taxes.

Employment Law

Reminder: Rent Stabilization

HB 1217, effective May 27, 2025, caps annual rent increases. Rent increases are capped at the lesser of 7% plus Consumer Price Index (CPI) or 10% under the Residential Landlord Tenant Act (RLTA), and 5% under the Manufactured-Mobile Home Landlord Tenant Act (MHLTA). Both laws prohibit increases during the first 12 months of tenancy. Beginning June 1, 2025, the Department of Commerce must calculate and publish the maximum annual rent increase percentage allowed under the RLTA annually. The RLTA rent increase limit does not prohibit a landlord from adjusting the rent after tenancy ends. The RLTA rent increase limit and related provisions expire on July 1, 2040. Please click here to see if you qualify for exemptions.

Washington Equal Opportunity and Employment Act

HB 1905  will go into effect on July 1, 2025, expanding the Washington Equal Pay and Opportunities Act to extend protections to a broader set of protected classes. Protected classes include age, sex, marital status, sexual orientation, race, creed, color, national origin, citizenship or immigration status, veteran or military status, disability, and the use of service animals. Employers must ensure that compensation practices and workplace policies are free from discrimination across this list.

Wage-Payment Act

Effective July 1, 2025, SB 5104 prohibits employers from using immigration status to coerce employees regarding wage payment violations, conditions of labor, or agricultural labor requirements. SB 5104 reinforces protections for immigrant workers and aligns with federal and state anti-retaliation frameworks. If L&I finds a wage payment violation, L&I may order the payment of all wages owed. Willful or intentional violations may result in civil penalties, with a minimum penalty of $1,000 or 10% of the total amount of unpaid wages, whichever is greater, and a maximum of $20,000.

Paid Sick Leave and Paid Family and Medical Leave

HB 1875 expands Washington State’s paid sick leave law to include time off for immigration-related proceedings. If an employer requests verification for an absence exceeding three days, the employer must accept documentation from an advocate, attorney, member of the clergy, or other professional who is assisting the employee or the employee’s family member in the proceeding. This provision includes employees of transportation network companies and goes into effect July 27, 2025.

HB 1213 expands Paid Family and Medical Leave (PFML) protections to employees who have worked at least 180 days with their current employer, provided the employer has at least 25 employees as of January 1, 2026. This threshold will gradually decrease to include employers with at least 8 employees by January 1, 2028. SB 5292 incrementally increases the cap on the total premium rate every two years, from January 1, 2027, to January 1, 2033, until it reaches 2%.

Mini-WARN Act

SB 5525, requires employers with 50+ full-time staff to give 60 days written notice before mass layoffs or closures. Washington’s Mini-WARN Act, effective July 27, 2025, requires most covered employers to provide more notice than federally required and protects employees from layoffs while they are taking PFML. SB 5525 also grants enforcement rights to the Washington State Employment Security Department (ESD), aggrieved employees, and labor unions.

Concerning Access to Personnel Records

Effective July 27, 2025, SHB 1308 requires private employers (not subject to the Public Records Act) to provide employees or former employees with a copy of their personnel file at no cost within 21 days of request. Employers must also provide a written discharge statement upon request from a former employee. Employees can enforce these rights through a private lawsuit after giving at least five days’ notice. Statutory damages range from $250 to $1,000, depending on the delay, plus $500 for other violations, and may include attorney’s fees and equitable relief.

Washington Fair Chance Act

HB 1747 updates Washington’s Fair Chance Act (WFCA), effective July 27, 2025.  Employers may not automatically or categorically exclude applicants with criminal records from any employment position and must make a conditional offer of employment before conducting background checks or rejecting an applicant for failing to disclose a criminal record. Exemptions apply for federal contract positions that prohibit hiring individuals with criminal history.

The Attorney General’s Office (AGO) may waive penalties for first-time or minor violations but can impose fines of $1,500 for a first offense, up to $3,000 for a second, and up to $15,000 for third or subsequent violations. The AGO is no longer required to follow a stepped enforcement process.

Prevailing Wage Laws

HB 1821, effective July 27, 2025, expands the definition of “interested party” in the state’s prevailing wage laws to include joint labor-management cooperation committees and Taft-Hartley trusts. These groups can now request certified payroll records from the Department of Labor & Industries, but may use them only to file prevailing wage complaints and not for union organizing or commercial purposes. Section 2 goes into effect January 1, 2026.

Unemployment for striking workers

SB 5041, effective July 27, 2025, allows employees to collect unemployment insurance (UI) benefits while they are on strike or participating in a lockout under specific conditions. Disqualification ends either when the strike ends or by the second Sunday after it begins, unless a court deems the strike illegal, requiring repayment of benefits. Retroactive wages also trigger repayment. Striking workers may receive up to six weeks of UI benefits. A one-week waiting period applies, and benefits are charged only to the separating employer’s experience rating.

The law removes UI disqualification for employees in multi-employer lockouts, with all strike and lockout provisions expiring December 31, 2035. Sections 1-7 of the bill will go into effect January 1, 2026.

Employee Requirements for Driving

SB 5501, effective July 27, 2025, prohibits employers from requiring a driver’s license as a condition of employment or including such a requirement in a job posting, unless driving is essential to the job or tied to a legitimate business need.

The Department of Labor & Industries will investigate complaints and may order payment of actual damages, statutory damages (whichever is greater: actual damages or $5,000), 1% monthly interest, and investigation costs. Civil penalties include up to $500 for a first violation and up to $1,000 or 10% of damages for repeat offenses.

Business Closing and Mass Layoffs Notification

SB 5525 requires employers of 50+ full-time employees to provide 60 days’ written notice to the Employment Security Department (ESD), affected employees, and unions (if applicable) before a business closing or mass layoff affecting 50+ employees at a single site. If a layoff initially expected to last under three months is extended, employers must provide written notice as soon as the extension becomes foreseeable. In business sales, the seller is responsible for the notice before the sale, and the buyer afterward.

Notices must include:

  • Site address and company contact,
  • Whether the closure/layoff is temporary or permanent,
  • Dates and schedule of job losses,
  • Job titles and names of affected employees (plus addresses for ESD),
  • Whether the action involves relocation or outsourcing.

Updated notice is required if layoffs extend beyond the original timeline. SB 5525 goes into effect July 27, 2025. For more information about exemptions, please click here.

Taxes, Fees, and Tolls

Gas Tax

Washington’s gas tax will increase by another six cents starting in July. It will then continue to increase by 2% each year to account for inflation.

SR-99 Tolling Road

SR-99 tunnel tolls are set to increase on July 1, 2025. This increase is a part of a larger plan to increase tolls every three years to pay the $200 million the state borrowed for transportation construction.

Capital Gains and Estate Taxes

SB 5813 aimed to increase funding for education by creating a more progressive rate structure for the capital gains tax and estate tax. For the estates of decedents dying on or after July 1, 2025, rates for Washington taxable estates are increased. See new rates here.

For additional information, email sarahc@seattlechamber.com.