Washington State has made an immediate change to its unemployment insurance work search requirements for striking workers after the U.S. Department of Labor (USDOL) determined that the state’s existing rule did not conform with federal unemployment insurance law.
This is an important development for employers, and not just those dealing with a strike or other labor dispute.
According to the Washington Employment Security Department (ESD), USDOL advised the state that its current work search rule was out of conformity with federal law and needed to be corrected immediately. Failure to do so could put federal funding used to administer Washington’s unemployment insurance program at risk and could also jeopardize the Federal Unemployment Tax Act (FUTA) tax credits available to Washington employers.
ESD responded by filing an emergency rule on August 21, 2026. The change applies beginning with the unemployment claim week that started August 23.
What was the problem?
The issue involves Washington’s treatment of striking workers who file for unemployment benefits.
Washington changed its unemployment law in 2025 through Engrossed Substitute Senate Bill 5041. Beginning January 1, 2026, certain workers unemployed because of a labor strike became eligible to receive up to six weeks of unemployment benefits after satisfying the applicable disqualification period.
When Washington implemented the law, its rules treated workers unemployed because of a strike as being “attached to an employer.”
That distinction is important.
Under WAC 192-180-010, unemployment claimants generally must actively seek work unless an exception applies. Claimants considered attached to an employer can qualify for an exception to the normal work search requirement.
Because striking workers were considered employer-attached under WAC 192-180-005, they were not required to perform the same work search activities normally required of unemployment claimants.
USDOL determined that this exemption conflicted with federal requirements.
What does federal law require?
Section 303(a)(12) of the Social Security Act requires individuals receiving regular unemployment compensation to be able to work, available for work and actively seeking work.
States have flexibility in how they administer unemployment insurance programs, including how they define acceptable work search activities. However, that flexibility still has to operate within federal unemployment insurance requirements.
USDOL has previously issued guidance explaining that states must ensure their laws, regulations and administrative practices comply with the federal work search requirement.
More importantly for Washington, USDOL has addressed the application of these requirements to workers involved in labor disputes. Federal guidance indicates that states cannot simply create a categorical exemption from the able, available and actively seeking work requirements for claimants because they are participating in a strike.
A striking worker may potentially qualify for unemployment compensation under a state’s law, but that does not automatically eliminate the claimant’s responsibility to satisfy the weekly eligibility requirements that apply under federal law.
That appears to be the issue USDOL identified with Washington’s rule.
Washington’s emergency change
To address the federal conformity issue, Washington ESD filed an emergency rule changing WAC 192-180-005. The rule removes claimants unemployed because of a strike from the definition of workers considered “attached to an employer.” As a result, striking workers claiming unemployment benefits in Washington will now have to meet applicable work search requirements.
ESD states that workers filing weekly claims during a labor dispute must be able and available for work, report wages earned while on strike and complete three approved job search activities each week. ESD also indicates it will contact these claimants to verify their work search activities. The emergency rule became effective August 21, with the updated work search requirements applying to the week beginning August 23, 2026.
ESD has indicated that permanent rulemaking will follow.
Why employers should pay attention
What makes this development particularly important from an employer perspective is the potential consequence of a state being out of conformity with federal unemployment insurance requirements.
The unemployment insurance system is a federal-state partnership. States administer their own programs, but they must continue to satisfy certain federal requirements.
USDOL reviews state unemployment laws and their administration to determine whether they conform with requirements under the Social Security Act and FUTA. These federal requirements are tied to federal administrative funding for state unemployment programs as well as the FUTA tax credit structure applicable to employers.
According to Washington ESD, USDOL warned that if the state’s work search issue was not corrected, Washington could lose federal funding for administration of its unemployment insurance program and employers in the state could lose their FUTA tax credits.
That is a significant consequence for what might otherwise look like a fairly narrow unemployment eligibility issue.
The FUTA statutory tax rate is 6.0% on the first $7,000 of taxable wages paid to each employee. Employers that meet the applicable requirements generally receive a credit of up to 5.4%, resulting in an effective FUTA rate of 0.6% before considering any applicable credit reduction.
This is why federal conformity matters to employers. State unemployment insurance policy can have implications that go well beyond the payment of an individual unemployment claim.
Work search does not necessarily mean accepting strike replacement work
There is another distinction employers should understand. Requiring a striking worker to actively seek employment does not necessarily mean that worker must accept any job offered.
FUTA contains protections regarding the refusal of new work when a position is vacant directly because of a strike, lockout or other labor dispute. Section 3304(a)(5) provides circumstances under which unemployment compensation cannot be denied to an otherwise eligible claimant for refusing such work.
So, there are two separate issues.
A claimant may be required to actively search for work to remain eligible for unemployment benefits while still having protections regarding certain employment associated with an ongoing labor dispute.
Washington’s law anticipated a possible federal conflict
There is another interesting part of Washington’s 2025 legislation that is worth noting.
When lawmakers expanded unemployment eligibility for striking workers, they included language addressing the possibility of a conflict with federal unemployment requirements.
The law provides that if any part of the legislation conflicts with federal requirements that are a condition of federal funding or employer eligibility for federal unemployment tax credits, the conflicting provision becomes inoperative to the extent of that conflict. The law also directs ESD to adopt rules consistent with applicable federal requirements.
In other words, the possibility of a federal conformity problem was contemplated when the legislation was enacted.
That issue has now become a reality, at least with respect to Washington’s work search exemption.
What should employers do?
Washington employers should continue to watch this issue as ESD moves from the emergency rule to permanent rulemaking.
Employers experiencing a strike or other labor dispute should also carefully review unemployment claim notices, benefit determinations and benefit charge statements associated with affected employees.
This is particularly important because Washington’s law contains specific provisions concerning how benefits paid in connection with labor disputes affect employer experience-rating accounts.
More broadly, employers with operations in multiple states should pay attention to this development.
The federal requirement at the center of the Washington dispute—Section 303(a)(12) of the Social Security Act—is not unique to Washington. It is a federal requirement applicable to state unemployment insurance programs generally.
Other states considering unemployment benefits for striking workers will have to take the same federal requirements into account when determining how those claims are administered.
What this means going forward
Washington can continue to provide unemployment benefits to qualifying striking workers under its state law. What it cannot do, based on USDOL’s interpretation, is automatically excuse those claimants from a federal eligibility requirement simply because they are participating in a strike.
That distinction is important.
Whether someone can potentially receive unemployment benefits is one question. Whether that person satisfies the weekly eligibility requirements to actually receive those benefits is another.
Beginning with the week of August 23, striking workers claiming unemployment benefits in Washington must satisfy the state’s applicable work search requirements, including completing approved job search activities.
For employers, this is also a good example of why unemployment insurance changes need to be looked at from more than just the state level. State statutes, state agency regulations, federal unemployment law and USDOL interpretations can all affect how a new unemployment provision ultimately works in practice.
And in this case, the federal conformity issue carried consequences that potentially extended to every employer subject to unemployment taxes in Washington.
Wayne Rottger is an accomplished professional with over 30 years of experience in the unemployment management and consulting industry. His expertise spans claims administration, client onboarding and management, customer success, tax account auditing and modeling, and consulting on complex corporate structure changes. Wayne’s ability to guide clients through the intricacies of unemployment tax statutes and regulations has been instrumental in helping them make critical decisions.
In 2020, Wayne joined Experian Employer Solutions as the Vice President of Unemployment Tax. His deep understanding of the industry led to the creation of his current role as Product Intelligence Manager, in which he monitors and reports on state and federal legislative changes, conducts informative webinars related to unemployment claims and tax, and provides thought leadership for various HR and Payroll Associations across the country. Prior to Experian, Wayne worked with other third-party agents, including Equifax Workforce Solutions and TALX Corporation to name a few.
Wayne’s strength lies in presenting complex, industry-specific intel in an understandable manner. He has successfully assisted clients across various industries, providing clarity and insights. Wayne holds a Bachelor of Science Degree in Public Relations from the University of Central Missouri.
