Do business owners qualify for unemployment benefits in Washington state?

That's what I was afraid of. Are there any other programs available for business owners who are struggling?

You might want to look into other assistance programs through the state or federal government, but they're not administered through Washington ESD's unemployment system.

I was taking business profits, not paying myself a W-2 wage. So I guess that means I'm out of luck?

Most likely yes, but it's worth checking with Washington ESD directly to be sure about your specific situation.

This is so confusing. I had no idea the way you pay yourself matters so much for unemployment eligibility.

That's exactly what I'm worried about. How did you finally get through to someone?

I actually found this service called Claimyr that helped me get through to an actual Washington ESD agent. You put in your info at claimyr.com and they call you back when they get an agent on the line. There's even a video demo at https://youtu.be/7DieNd3C7zQ showing how it works. Made it so much easier than the endless calling.

Wait, is that legit? Sounds too good to be true honestly.

I understand the frustration, but the UI system is insurance-based. You have to pay in to be eligible to collect, just like any other insurance.

Tell that to my tax bill every year. We pay plenty into the system through business taxes.

Business taxes and unemployment insurance are separate things though. UI is specifically funded by payroll taxes on employee wages.

Were you paying yourself as an employee or just taking profits? I'm trying to figure out if there's any way I might still qualify.

just profits. i looked into it and we're screwed basically

If you're paying yourselves W-2 wages and paying unemployment taxes on those wages, you should be eligible. You'd need to have your employment terminate though - you can't collect while still actively running the business.

Oh interesting. So we'd have to actually close or sell the restaurant first?

Exactly. You can't be unemployed if you're still employed by your own business, even if it's not making money.

Hindsight is 20/20 I guess. I was trying to save money on taxes when I started out.

Totally understandable. Most new business owners don't think about unemployment until they need it.

Easy to say now but when you're starting out every dollar counts. The tax savings can make or break a new business.

Those programs like PUA ended in 2021. There's no federal self-employment unemployment assistance available anymore.

Darn. Those programs were a lifesaver for so many small business owners during COVID.

Yeah but they were emergency measures. The regular UI system has always been employee-focused.

I used it and it worked great. They don't do anything magical - they just keep calling until they get through and then conference you in. Saved me tons of time and frustration.

Interesting. Might be worth trying if I ever need to reach Washington ESD about something.

My sister used them too when her claim got stuck in adjudication. Got through to an agent the same day.

Because there are so many different business structures and situations. LLC, corporation, sole proprietor, partnership - they all have different implications for unemployment eligibility.

I guess that makes sense but it's still frustrating when you're trying to figure out if you qualify.

Good point. I'd probably need to look for regular employment rather than trying to start another business right away.

Exactly. And you'd need to be available for work, which means you couldn't be spending all your time on business activities.

The job search requirement is 3 employer contacts per week in Washington, just like any other claimant.

Don't be embarrassed! It's a legitimate question that lots of business owners probably have.

Always worth asking. The worst that happens is you get a no, but at least you know for sure.

Yeah, that seems to be the consensus. I guess I need to accept that I don't qualify and look at other options.

Don't give up without talking to Washington ESD directly though. There might be nuances to your situation that change things.

Agreed. And if you need to reach them, that Claimyr service seems legit based on what people are saying here.

Smart accountant. I wish I had thought about that when I was setting up my business structure.

Live and learn. Maybe for your next business venture you'll set it up differently.

That's outside my expertise with unemployment insurance, but I'd suggest checking with the Washington State Department of Commerce or SBA for business assistance programs.

Thanks, I'll look into those options.

Same here. Even if I can't get unemployment, maybe there are other resources available.

That's probably the smart way to do it if you can manage both. I jumped in full time right away.

It's definitely harder to grow a business when you're only working on it part-time, but the security is nice.

Agreed. This has been really informative even though it's not the answer I was hoping for.

Good luck with whatever you decide to do next. The entrepreneurial spirit is admirable even when things don't work out.

Definitely. Starting a business takes guts and most people never even try.

I'm sorry you're going through this too. The distinction between distributions and salary really does matter for UI eligibility, which is something I wish I had known when I started my business. From what others have mentioned in this thread, you might want to check with the Washington State Department of Commerce or the SBA for other business assistance programs. Also, if you need to speak with someone at Washington ESD directly to confirm your situation, several people here have mentioned success with using Claimyr to actually get through to an agent. Even though the UI news isn't great for us, there might be other resources available that we haven't discovered yet.

I feel your pain - the whole system seems designed around traditional employment relationships. Self-employment taxes going toward Social Security and Medicare but not unemployment insurance is such a frustrating gap. You might also want to look into whether Washington has any small business emergency assistance funds or if there are local nonprofit organizations that help displaced entrepreneurs. Sometimes cities or counties have their own programs that aren't well-publicized. It's worth making some calls even if it feels like a long shot.

@Aiden Chen I m'really sorry you had to close your business too. It s'such a tough situation when you ve'put years of work into something. Have you looked into whether you might qualify for any SNAP benefits or other basic assistance programs while you re'transitioning back to traditional employment? I know it s'not the same as unemployment insurance, but it might help bridge the gap. Also, since you were doing freelance design work, you probably have a portfolio and client relationships that could help you find contract or permanent positions with agencies or companies. The skills transfer even if the business structure didn t'work out.

I'm really sorry to hear about your design business closing - that must be incredibly difficult after putting three years into it. You're absolutely right that the self-employment tax situation is frustrating since it feels like you were paying into the system, just not the right part of it for unemployment purposes. I've been researching other options myself since realizing I won't qualify for regular UI benefits either. One thing I discovered is that some local workforce development boards have special programs for displaced business owners or entrepreneurs transitioning back to traditional employment. They sometimes offer job search assistance, retraining opportunities, or even temporary financial support that's separate from the regular unemployment system. It might be worth reaching out to WorkSource Washington to see if they have any programs specifically for people in our situation. Also, since you mentioned you were doing freelance design, have you considered reaching out to temp agencies that specialize in creative services? They might have contract opportunities that could provide some income while you're figuring out your next steps.