This bill amends RCW 74.39A.310 and 74.39A.530 to change how home care agency and consumer directed employer rates are set and used. It requires the department, in each odd-numbered year within 60 days after adjournment sine die, to determine a home care agency labor rate by converting and distributing either negotiated wages/benefits for individual providers or previously established labor rates. The per-quarter-hour labor amount must include (a) total negotiated wages and benefits or prior labor rates, (b) average employer contributions or premiums (FICA, FUTA, state unemployment tax, state paid family medical leave, workers’ compensation), and (c) an adjustment for nonbillable work time and related employer taxes. The labor rate must be used exclusively for wages and benefits of direct care workers and required employer contributions; portions allocated for health benefits or for training may be used only for those specific purposes. The department must prevent duplicate accounting, verify agency compliance, and require each agency to submit either a third-party audit or a written attestation from the exclusive bargaining representative; the department may adopt rules to allow temporary exemptions for extraordinary circumstances. The bill creates and specifies procedures for a rate-setting board when the department contracts with a consumer directed employer. It sets membership, voting rules, quorum, and a process for selecting a chair (including using arbitrator lists from the Federal Mediation and Conciliation Service if needed). If a majority of voting members do not agree on a proposed labor or administrative rate by August 1, the specified escalation procedures apply (for labor rates a majority including the chair decides or, if unresolved by September 1, the chair’s sole vote controls; for administrative rates the department determines the rate). Rates determined must be submitted to the Office of Financial Management by October 1 for certification; if OFM certifies financial feasibility the governor requests funding in the budget and the legislature approves or rejects the request as a whole. The department may not recommend a home care agency administrative rate that exceeds 20 percent of the home care agency vendor rate, and a consumer directed employer administrative rate cannot exceed 20 percent of the sum of the consumer directed employer labor rate and administrative rate. The consumer directed employer labor rate is an hourly rate to be paid to the employer and must be used only for wages, taxes, and benefits of individual providers; it must include specific hourly amounts reserved for health benefits and for training/testing/certification and associated administrative costs. The bill allows the department to modify labor and administrative rates between rate-setting board cycles under limited conditions, with any change not exceeding two percent of the combined labor and administrative rates and any increase contingent on legislative appropriation. Missing or unclear elements in the provided text include the specific name of “the department,” some statutory definitions and cross-references (for example full definitions of “home care agency vendor rate,” “consumer directed employer,” and certain referenced RCW factors), the complete chair-selection fallback procedure where the text ends mid-sentence, and timing details for when agencies must submit audits or attestations.

If enacted, the law would require the state agency in charge to set a biennial home care agency labor rate and to earmark that money so it can only be spent on direct care worker pay, benefits, employer payroll taxes, travel/nonbillable time compensation, and a separately reserved amount for health benefits and for training/testing. Home care agencies and consumer directed employers would be limited in how much of the vendor rate can be used for administrative overhead (generally capped at 20 percent), must prove compliance either by an independent audit or a union attestation, and would face department verification and possible rule-based temporary exemptions; a new rate-setting board and a tight timeline with escalation rules (including the chair’s deciding vote if members don’t agree) will influence proposed rates that must be sent to OFM by October 1 for budget inclusion, so actual higher pay and benefits depend on OFM certification and legislative appropriation. The groups most affected are home care agencies, consumer directed employers, direct care workers, and their bargaining organizations: agencies will have less flexibility in using vendor dollars for overhead, likely higher or more protected funding flows for worker wages/benefits, and new compliance costs for audits or attestations; consumer directed employers get a structured rate-setting process but face caps and deadlines that could shift decision power to a chair or the department, and any rate increases require legislative funding so there is a real risk that rates approved by the board will not result in immediate budgeted increases. The bill text leaves some practical details unclear here, including which specific state agency is “the department,” exact timing for when audits or attestations must be submitted, and full statutory definitions referenced elsewhere.