How do companies pay for unemployment benefits in Washington - confused about employer taxes

So if I lay someone off and they collect unemployment, my tax rate will definitely go up?

Not necessarily immediately, but it can affect your experience rating over time. New employers start at a standard rate and then it adjusts based on your claim history.

Your boss is probably referring to how his future tax rates might increase. Employers do get charged back for benefits paid to their former employees through the experience rating system.

ohh ok that makes more sense. he made it sound like he was writing checks directly to people lol

That's a huge range! What would cause someone to hit that 5% rate?

Usually high turnover with lots of employees collecting benefits. Construction companies and seasonal businesses often have higher rates.

Is there any way to contest charges if you think they're wrong?

Thanks, I'll check that out. The Washington ESD website is not very helpful for employer questions.

I've heard of Claimyr for claimants but didn't know they helped employers too. Good to know!

So even if I never have anyone file for unemployment, I still have to pay the taxes?

Exactly. It's required for all employers with employees in Washington. Think of it like any other insurance - you pay premiums even if you never file a claim.

Generally, if someone quits without good cause, they won't qualify for benefits, so it wouldn't be charged to your account. But if they quit for a qualifying reason (like unsafe working conditions), they might still get benefits.

What if they quit and then later file for benefits claiming it was constructive dismissal or something?

That's where it gets complicated. Washington ESD will investigate and make a determination. You can contest it if you disagree with their decision.

What kind of documentation specifically? Like performance reviews and stuff?

Performance reviews, disciplinary actions, resignation letters, attendance records, any communication about job abandonment or policy violations. Basically anything that shows why employment ended.

Trust me, there are days I miss just clocking in and out!

Three years seems like a long time to be paying for past mistakes.

It is, but it also means one bad year won't destroy you if you have good practices overall.

Nonprofits can choose to reimburse Washington ESD directly for benefits paid instead of paying regular unemployment taxes. It's called the reimbursement method.

Is that usually better for nonprofits?

Depends on your turnover. If you rarely have claims, reimbursement can be cheaper. If you have regular claims, the tax method is more predictable.

How long did it take to get through? I've been trying to call for weeks.

With Claimyr it was pretty quick. Without it, I never got through on my own after trying dozens of times.

What happens if you miss the deadline?

The charges become final and count against your experience rating. Much harder to fix after that.

Any tips for prevention besides good documentation?

Clear policies, consistent enforcement, progressive discipline when needed, and honest exit interviews. Also make sure you understand what qualifies as 'good cause' for quitting in Washington.

Not a bad idea, especially if you're planning to grow. Employment law gets complicated fast.

Yeah, I'm realizing there's a lot I don't know that I don't know, if that makes sense.

Potentially yes, especially if it's a pattern. Mass layoffs do get reported to Washington ESD and would definitely impact experience rating.

that seems kinda harsh if it's due to economic conditions beyond their control

The system is designed to encourage employment stability, but you're right that economic downturns can be unfair to employers.

It shouldn't stop you from making necessary business decisions, but it's definitely something to factor in.

Right, just want to make sure I'm doing it right and documenting everything properly.

Good plan. And don't hesitate to contest charges if you think they're wrong. The system isn't perfect.

And remember Claimyr if you need to actually talk to someone at Washington ESD. Sometimes you just need a real person to explain things.