Can small business owners get Washington ESD unemployment benefits?

That's what I was afraid of. I was set up as an LLC and took owner distributions. Does it matter that I had employees before and was paying unemployment taxes for them?

The taxes you paid for employees don't cover you as the owner unfortunately. You would have needed to elect coverage for yourself as an officer or owner, which most small business owners don't do.

I did have a part-time W-2 job for about 6 months last year while trying to build up the business. Would that help my case?

Yes! That W-2 income definitely counts toward your base period wages. You might qualify based on those earnings even if the business income doesn't count.

This is exactly what happened to me. I qualified based on my part-time job earnings even though my main business didn't count.

Have you tried using Claimyr? I found out about it recently and it actually got me through to a real person at Washington ESD. You can check it out at claimyr.com - they have a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works.

Never heard of that before. Is it legit? I'm desperate at this point.

Yeah it's real. They basically handle the calling and waiting for you so you don't have to sit on hold. Saved me hours of frustration.

I definitely didn't elect coverage for myself. I was trying to keep costs down. Do you remember what happened when you applied?

I was denied initially because of the business ownership issue, but I had some W-2 wages from contract work that qualified me for a partial benefit. It was worth applying even though the process was frustrating.

If you had W-2 wages from regular employment, those count toward your unemployment eligibility regardless of any side business you might have had. The business income typically doesn't count unless you specifically elected coverage.

ok good because i had a small etsy shop but worked at a restaurant too until it closed

That's another thing I'm worried about - getting stuck in adjudication limbo. How long are you supposed to wait before calling?

I've been trying to call but like everyone else said, you can't get through. Might try that Claimyr thing someone mentioned.

Adjudication can take 4-6 weeks especially for business ownership issues. They have to verify your work history and determine eligibility. Keep filing your weekly claims in the meantime.

I understand the frustration, but the system is designed around the principle that you pay in to get benefits out. Business owners can elect to pay unemployment taxes on themselves if they want coverage.

Yeah well nobody tells you that when you're starting out and trying to keep costs down. It's a catch-22.

This is why I always recommend new business owners talk to an accountant about all the optional coverages. Most people don't realize unemployment insurance for owners is even an option.

That gives me hope. How long did it take for your claim to be approved?

About 3 weeks total. They had to verify my business closure and look at my wage history. I had to provide some documentation about the business but nothing too crazy.

Are those through Washington ESD too or different agencies?

Different agencies usually. SBA sometimes has programs, and there might be local economic development assistance. Worth checking with your city or county too.

Definitely planning to be completely honest. I don't want to create more problems for myself.

Good call. Unemployment fraud is no joke and they do investigate. Better to be denied legitimately than to have bigger problems later.

That sounds really helpful. Did they charge you for the service?

They do charge but it was worth it to actually talk to someone instead of wasting hours on hold. You can see how it works in their demo video.

If you elected coverage and paid the premiums, you should be eligible just like any other covered worker. The key is that you have to have actually been paying into the system.

Ok that makes sense. I wish I had known about this option when I started my business.

Wait, 1099 income can count toward unemployment? I thought only W-2 wages counted.

That's usually true, but there are some exceptions. Sometimes contract work can be reclassified if it should have been W-2 employment. It's complicated but worth letting them review your case.

That sounds like a lot of paperwork. How long did it take you to get everything together?

About a week to gather everything. The hardest part was getting a formal statement about the business closure from my accountant.

How does that work? Being an employee of your own business?

It's complicated and depends on how your business was structured. Some business owners can legitimately be employees of their corporation and pay unemployment taxes on themselves. An employment attorney would know more about the details.

This is getting pretty technical. I'd recommend talking directly to Washington ESD or maybe getting some legal advice if your situation is complex.