Does a company pay for unemployment benefits in Washington ESD?

So I don't pay anything into it myself? That seems weird that I can collect benefits without contributing.

Correct, you don't pay anything directly. The employer contributions are based on their experience rating - companies with more layoffs pay higher rates.

That makes sense from a policy standpoint - gives employers incentive to keep people employed rather than constantly laying off.

my old company was always complaining about their unemployment tax rate going up after they had massive layoffs in 2023

Thanks for the suggestion! I might need that if I have more questions about the system.

Never heard of that service before - does it actually work or is it just another scam?

It's legit - they basically call on your behalf and conference you in when they get through. Saved me hours of trying to call Washington ESD myself.

Wow that's a pretty big range! So a company that never lays anyone off pays way less than one that's constantly firing people?

Exactly. It's designed to make employers think twice about layoffs since it directly affects their tax rate. Companies with stable employment histories get rewarded with lower rates.

Generally yes - you need to be unemployed through no fault of your own. Quitting usually disqualifies you unless there's good cause like unsafe working conditions or harassment.

Damn I had no idea. Good thing I haven't quit my crappy job yet then!

There are some exceptions for quitting with good cause but you'd need to prove it to Washington ESD during the adjudication process.

This is getting complicated. So there's both state and federal unemployment insurance?

Yes, but as an employee you only deal with the state system (Washington ESD). The federal part is mainly administrative funding.

That's a lot of money! No wonder employers try to avoid layoffs when possible.

Yeah and if you have to lay people off, you're basically paying for their unemployment benefits twice - once in severance and then through higher tax rates later.

Oh good point - so it's more like insurance where everyone pays in and claims are paid out of the pool?

Exactly! It's a pooled insurance system, though individual employer rates are still based on their claims history.

That happened during COVID right? Lots of states had to borrow money from the federal government.

Yes, Washington actually borrowed federal funds during the pandemic to cover the massive increase in unemployment claims.

I'll definitely keep that in mind if I need to contact them. Thanks everyone for explaining how this all works!

This thread was super helpful! I never understood the employer tax part either.

Right, makes sense. Just because it's "free" to me doesn't mean there aren't rules about getting it.

Exactly - you still have to do your weekly claims and job search activities even though you didn't pay into the system directly.

Interesting! I didn't know other states did it differently.

Yeah we're lucky in Washington that way - no payroll deduction for unemployment insurance.

Perfect summary! Thanks to everyone who explained this - I feel much more informed about how the system works now.

This was a great thread. I learned a lot about the funding side of unemployment insurance.