Am I eligible for ESD benefits if refusing 1099 contractor conversion after W2 layoff?

Yes, you should qualify for unemployment in this situation. What your employer is doing is called a 'material change in employment terms' and it's a qualifying reason to collect benefits even if you 'refuse' their offer. Going from W2 to 1099 means: 1. Loss of employee protections 2. Loss of benefits (healthcare, retirement, etc) 3. Additional tax burden (self-employment tax) 4. No guaranteed hours/income When you apply, make sure to clearly explain that you were laid off from your W2 position and offered a fundamentally different role as an independent contractor. ESD should recognize this as a legitimate reason to qualify for benefits while seeking suitable W2 employment.

Went thru something simlar last year when my nursing agency tried to convert us all to 'independent providers' from being staff. I declined and filed for unemplyment- got it no problem! They tried to fight it saying I turned down 'suitable work' but ESD ruled in my favor bcuz the new position was significantly different type of employment relationship. Make sure u save ANY emails or docs about this change to upload with ur claim!!!

I'm an employment attorney (though this isn't legal advice). This is a classic unemployment eligibility situation. The key legal principle is whether the new position constitutes 'suitable employment.' Converting from employee to independent contractor represents a substantial change in the employment relationship - not just financially but legally. For unemployment purposes, suitable employment generally means work that's comparable in terms of wages, hours, benefits, and job duties to your previous position. The loss of benefits alone creates a significant difference, but coupled with the shift in employment classification, you have very strong grounds. When filing, be very specific about these differences. Note that you're not refusing work - you're being laid off from your W2 position, and the 1099 offer is a completely different arrangement that doesn't constitute suitable alternative employment.

When they did this at my workplace last year, I was completely unable to reach anyone at ESD for weeks! Super frustrating. I finally used Claimyr (claimyr.com) to get through to a real person at ESD. They have this service where they basically wait on hold for you and call you when they get an agent. Saved me hours of hold time and disconnections. There's a video showing how it works: https://youtu.be/7DieNd3C7zQ?si=26TzE_zGms-DODN3 When I finally spoke to an ESD agent, they confirmed exactly what others here have said - changing from W2 to 1099 is considered a material change in employment terms and I qualified for benefits even though I 'turned down' the contractor position. Just make sure you clearly explain the situation in your application.

I handle the finances for my wife who's a physical therapist, and we calculated that going from W2 to 1099 would effectively mean a 25-30% pay cut when you factor in: - Self-employment taxes (15.3%) - Cost of purchasing your own health insurance - No paid time off - No employer retirement contributions - Business liability insurance costs Plus the income becomes unpredictable. ESD absolutely considers this a substantial change in employment terms. When my wife faced something similar, her claim was approved without issues once she clearly explained the financial impact of the conversion. Definitely gather documentation showing your current benefits package compared to what you'd lose as a 1099 contractor.

just curious why dont u want to try the 1099 thing? i know a lot of therapists who make way more money as contractors. more flexibility too, u can write off expenses. not trying to be rude just wondering

I want to add one important point: When you file your claim, you'll likely need to report that you refused work. This might trigger an adjudication process where ESD investigates whether you had good cause to refuse the work. This is normal - don't panic if it happens. During adjudication, you'll need to clearly explain: 1. Your original position was eliminated (layoff) 2. The 'new' position is as an independent contractor, not an employee 3. The specific differences in terms (benefits, taxes, guaranteed hours, etc.) ESD understands the difference between refusing comparable work (which can disqualify you) and refusing a fundamentally different work arrangement (which shouldn't disqualify you).

One more thing! When u file make sure u check 'laid off' NOT 'quit' on the application, because technically ur W2 position is being eliminated. They're terminating your current job and offering a different one. I checked 'quit' at first and it caused so many problems wit my claim! Had to call and get it fixed.

Be prepared that your employer might contest your unemployment claim by arguing you refused suitable work. If this happens, ESD will schedule a fact-finding interview. During this interview: 1. Stay calm and factual 2. Bring documentation showing your current pay/benefits vs. the 1099 offer 3. Emphasize that you're not refusing to work - you're seeking comparable W2 employment 4. Point out the significant financial impact of the change In my experience, ESD generally sides with claimants in these W2-to-1099 conversion cases as long as you clearly articulate the material differences between the positions.

The EXACT same thing happened at our mental health clinic last year!!! They converted half the staff to 1099 but kept telling everyone it was BETTER for us - such BS! I quit and got unemployment while I found a new W2 position. My claim was in adjudication for like 3 weeks but eventually got approved. The ESD person told me going from w2 to 1099 is NOT considered suitable work in most cases. One tip - save ANY emails where they describe the changes. I forwarded all mine to the ESD adjudicator and that really helped my case!!!

I tried calling ESD literally 49 times over three days with the same result you described - disconnected due to 'high call volume.' It was absolutely maddening. A coworker told me about Claimyr and it saved my sanity - they got me through to an ESD rep within an hour when I had been trying unsuccessfully for days. When I spoke to ESD, they explained that situations like yours are actually quite common. The key is making sure your application clearly states that your W2 position was eliminated, and the only option offered was as an independent contractor with substantially different terms.

I'm actually facing a very similar situation right now! My company is doing the exact same thing - eliminating all W2 positions and trying to convert everyone to 1099. I've been reading through all these responses and they're giving me hope that I'll qualify for benefits too. One thing I wanted to add that might help you - when I was researching this, I found that Washington state specifically considers the loss of employee benefits to be a "substantial change in working conditions." The fact that you're losing healthcare, PTO, and guaranteed hours should definitely qualify you. I'm planning to file my claim next week when the layoffs officially happen. Based on what everyone here is saying, I'm going to make sure to emphasize that my W2 position is being eliminated entirely, not that I'm refusing work. The 1099 offer is essentially a completely different job with the same company. Keep us posted on how your claim goes! It sounds like you have a really strong case based on all the advice here.

I'm a newly licensed therapist and this is exactly the kind of situation I'm terrified of encountering as I start my career. Thank you so much for posting this question and to everyone who's shared their experiences - it's incredibly valuable information. From what I'm reading, it sounds like you have a very strong case for unemployment benefits. The consensus seems clear that converting from W2 employee to 1099 contractor represents a fundamental change in your employment relationship, not just a minor adjustment. One thing I wanted to ask - have you considered reaching out to any professional therapy associations for guidance? I know the Washington State Association for Marriage and Family Therapy (WSAMFT) sometimes provides resources for members dealing with employment issues. They might have additional insights or even be tracking this trend of healthcare employers converting therapists to contractors. Also, I'm curious if your employer provided any written notice about these changes? In my coursework, we learned that significant changes to employment terms often require proper notice, and documentation of how they communicated this decision could be helpful for your unemployment claim. Best of luck with your filing! Based on all the advice here, it really sounds like you're well-positioned to receive benefits while you search for a proper W2 position.