On Feb. 8, Gov. Jay Inslee signed Senate Bill 5061, a bill that will bring much needed unemployment insurance relief to both employers and employees in Washington state. This bipartisan legislation, among other things, will lower unemployment tax payments and broaden eligibility of benefits during a public health emergency.

How Does This Legislation Help Me as an Employer?

The bill will reduce employers’ unemployment taxes due this April. The legislation accomplishes this through a variety of measures:

• The unemployment insurance (UI) tax increase that was scheduled for 2021-2025 is now postponed;
• The usual four-year period used to calculate benefit ratios is extended to five years;
• Certain benefits are not charged to employer experience rating accounts;
• The social tax rate, which would usually be higher and included in an employer’s UI tax payment, is capped to lower tax costs; and
• The solvency tax, which would usually be applied due to the low balance of the UI trust fund, is waived through 2025.

The bill also prevents certain benefits, including any benefits that were paid out during last spring’s “Stay Home, Stay Healthy” order (running from March 22, 2020 to May 30, 2020), from being charged to an employer’s experience rating account. This will help lower UI tax payments due in April for employers. Other benefits no longer charged to employers’ experience rating accounts include benefits paid out to high-risk individuals who are not able to work from home and who leave work due to a public health emergency, as well as, upon request, benefits paid if the employer closes a business worksite due to COVID-19.

Additionally, employers who have moved up at least eight tax rate classes can now take advantage of the voluntary contribution program to reduce their tax rate class. This means that employers have until March 31, 2021 to make a voluntary contribution to cancel out part of the UI benefits charged in the two most recent years. They will then receive a lower benefit ratio that is at least two rate classes lower than the original. The usual surcharge applied to this program is suspended.

How Does This Legislation Help Me as an Employee?

For employees, eligibility for UI benefits during a public health emergency is widened to include those who are considered high-risk individuals for COVID-19, or those living with high-risk individuals, when they leave work and cannot perform their job working from home. These benefits paid out will not be charged to employers’ experience rating accounts under this bill.

Additionally, after July 1, 2021, the minimum weekly benefit amount for employees will be increased from 15% to 20% of the average weekly wage.

For more information on unemployment insurance, please visit the Employment Security Department unemployment benefits web page.

While WSDA recognizes that more needs to be done for employers and employees impacted by the pandemic, we believe this bill is a good starting point. WSDA will continue to advocate for COVID-19 relief throughout the 2021 legislative session.

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