Substitute Senate Bill 5874 amends RCW 50.12.220 to revise reporting penalties and procedures for employers who fail to file timely or properly formatted tax and wage reports required by RCW 50.12.070. It creates a tiered penalty scheme: a $25 penalty per violation for untimely reports (subject to waiver or subsection exceptions); a warning letter for the first incomplete or incorrectly formatted report with instructions and technical assistance; and escalating penalties for subsequent occurrences within five years. If no contributions are due, the penalties are $75 for a second occurrence, $150 for a third, and $250 for a fourth and subsequent occurrences. If contributions are due, the second and third occurrences are assessed at 10% of quarterly contributions due (second occurrence minimum $75, third occurrence minimum $150, both capped at $250), and $250 for the fourth and subsequent occurrences. The bill also authorizes specific waivers and enforcement actions: the commissioner may waive penalties for minor or insignificant reporting errors (example: software failures to produce standard occupational classification or job title fields), and an incomplete-report penalty for missing occupational classification or job title applies only if the employer knowingly failed to report that information. Employers who knowingly misrepresent payroll are liable for up to ten times the difference in contributions plus reasonable auditing and collection costs, payable and enforceable by the department. Penalties for late payment of contributions are set at 5% for the first month or part, 10% total for the second month or part, and 20% total for the third month or part (with a minimum $10 penalty), and these are in addition to interest under RCW 50.24.040. The bill clarifies that penalties do not accrue on contributions from estates in the hands of receivers, executors, administrators, trustees in bankruptcy, common law assignees, or other liquidating officers after the date such a person qualifies as such, although contributions for employment by those persons become due and are subject to penalties like other employers. Decisions to assess penalties are made by the chief administrative officer of the tax branch or their designee, and employers retain the right to appeal under RCW 50.32.030. The extracted facts do not include the specific filing requirements in RCW 50.12.070, definitions of "commissioner," "department," or "tax branch," or the bill’s effective date or final gubernatorial action.

If enacted, employers who file late, incomplete, or incorrectly formatted unemployment tax and wage reports will face a clearer and more predictable penalty system: a warning for a first incomplete filing, then escalating fines for repeat offenses within five years (small fixed fees or a percentage of owed contributions with caps), fixed monthly penalties for unpaid contributions that grow to 20 percent, and very large liability (up to ten times the underreported amount plus audit and collection costs) for knowingly misstating payroll. That means most employers will face higher financial risk for repeat or deliberate errors, but will usually get a first-warning for formatting mistakes and can sometimes avoid penalties if errors were minor (for example caused by software) or if the department failed to act after adequate information was provided. The Employment Security Department gains clearer authority to assess, waive, and enforce these penalties through its tax branch, and employers retain the right to appeal assessments. Important details not shown here include the exact filing duties that trigger these rules, the formal definitions of “commissioner” and the department in this context, and the bill’s effective date, so timing and some administrative responsibilities remain uncertain.