How are unemployment benefits funded in Washington state?

Unemployment benefits in Washington are funded through payroll taxes that employers pay. It's called the State Unemployment Tax (SUTA) and it's based on their payroll and experience rating. Workers don't pay into it directly - it all comes from employer contributions to the Washington ESD trust fund.

wait i thought it was like social security where they take money out of your paycheck?? i've been worried about paying it back

The funding system is actually pretty smart. Employers who lay off more workers pay higher rates, so there's an incentive to keep people employed. The Washington ESD adjusts the tax rates annually based on the trust fund balance.

I've been trying to get through to Washington ESD for weeks about my claim status and it's impossible to reach anyone. If you need to actually talk to someone there, I discovered this service called Claimyr (claimyr.com) that helps you get through their phone system. They have a video demo at https://youtu.be/7DieNd3C7zQ showing how it works. Made such a difference for me!

During the pandemic the federal government also contributed money for extended benefits like PEUC, but that's all ended now. Regular state unemployment is just employer-funded through Washington ESD.

I work in HR and can confirm - we pay quarterly reports to Washington ESD with our unemployment taxes. The rate depends on our industry and claims history. New employers pay a standard rate until they build up experience.

The Washington state unemployment fund is actually in pretty good shape compared to some other states. During recessions they sometimes have to borrow from the federal government but Washington has been managing well.

so basically employers fund unemployment benefits as a cost of doing business, and it protects workers when they lose jobs through no fault of their own. seems fair to me

The rates vary by industry too. Construction and hospitality tend to have higher rates because of seasonal layoffs, while stable industries like healthcare have lower rates.

Question - if I'm self-employed can I pay into the unemployment system? I've heard some states allow this now.

I had to appeal a disqualification last year and when I finally got through to Washington ESD, the representative explained that the funding comes entirely from employer taxes. It was actually helpful to understand that I wasn't taking money from other taxpayers.

The trust fund also earns interest when it's invested, so that helps supplement the employer contributions. Washington ESD manages the fund pretty conservatively.

Thanks everyone for the explanations! I feel much better knowing this is employer-funded and not something I need to worry about paying back. The system makes a lot more sense now.

One more thing - the federal government does provide some administrative funding to help states run their unemployment offices, but the actual benefit payments come from state employer taxes.

My adjudication has been pending for 6 weeks now and I really need to speak with someone at Washington ESD about the status. Has anyone else tried that Claimyr service mentioned earlier?

The employer funding system also creates accountability - if Washington ESD approves inappropriate claims, it costs employers money, so there's built-in oversight of the system.

This is really helpful information! I had no idea that Washington's unemployment system was entirely employer-funded. I've been collecting benefits for about a month now and honestly felt a bit guilty about it, thinking it was coming from taxpayers. Knowing that my previous employers already paid into this system through their quarterly taxes makes me feel much better about using the benefits I'm entitled to. It's actually pretty clever how they tie the tax rates to each company's layoff history - gives businesses a real incentive to try to keep people employed when possible.