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Mateusius Townsend

How does an unemployment claim affect the employer - Washington ESD employer liability questions

I'm wondering about the employer side of things when someone files for unemployment with Washington ESD. My company recently had to let someone go due to budget cuts and they filed for UI benefits. I'm trying to understand what this means for us as the employer. Do we have to pay into the system? Will our rates go up? What happens if we want to contest the claim? I've heard that Washington ESD charges employers based on claims filed against them but I'm not sure how this works exactly. Any employers here dealt with this process before?

Yes, as a Washington employer you pay into the unemployment insurance system through payroll taxes. When someone files a claim against your company, it can affect your future tax rates depending on your experience rating. The more claims filed against you, the higher your rates typically become.

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Thanks for the info. Is there a way to see what our current rating is? I want to make sure we're not getting hit with higher rates than we should be.

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You can check your account through the Washington ESD employer portal. They send quarterly statements showing your tax rate and any claims activity.

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If you terminated the employee for misconduct, you can contest the claim. Washington ESD will investigate and determine if the person is eligible for benefits. If they find misconduct, the claim won't be charged to your account.

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It wasn't misconduct, just layoffs due to budget issues. So I assume we can't contest it then?

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Correct, layoffs due to lack of work are typically eligible claims. You'll likely be charged for this one unless there are other factors involved.

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Been dealing with this for years as a small business owner. The key is to respond quickly when Washington ESD sends you notices about claims. You usually have 10 days to provide information or contest.

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What kind of information do they usually ask for? I want to be prepared when the notice comes.

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Employment dates, reason for separation, final wages paid, any disciplinary actions. Keep good records of everything.

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This is so important! I missed a deadline once and couldn't contest a claim that should have been denied. Cost us thousands in higher rates.

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The Washington ESD system can be really frustrating to navigate as an employer. When I needed to get through to clarify some claim details, I couldn't reach anyone for weeks. Finally found claimyr.com which helped me get connected to an actual agent who could explain the process. They have a demo video at https://youtu.be/7DieNd3C7zQ that shows how it works.

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Interesting, I didn't know there were services to help with getting through to Washington ESD. Might be worth looking into if I run into issues.

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Yeah the phone system is terrible. I've spent hours on hold only to get disconnected. Anything that can help cut through that is valuable.

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Your unemployment tax rate is based on your experience rating, which looks at the ratio of benefits paid out to former employees versus your total taxable wages over the past few years. New employers start at a standard rate.

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We've been in business for about 5 years, so I guess we're past the new employer phase. Is there a way to improve our rating?

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Yes, by having fewer successful claims against you over time. Good hiring practices and proper documentation of any terminations help.

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Also pay attention to voluntary separations vs involuntary. If someone quits without good cause, that usually doesn't count against you.

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Make sure you understand the difference between base period employers and most recent employer. The most recent employer is usually the one that gets charged for the claim, even if the person worked other places during their base period.

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We were definitely their most recent employer, so sounds like we'll be on the hook for this one.

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Right, but if they worked somewhere else during their base period, those wages might be used to calculate their benefit amount even though you get charged.

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One thing to watch out for is if the person files an appeal or you contest and lose. There can be additional costs and your account gets charged regardless. Washington ESD is pretty employee-friendly in their decisions.

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Good to know. Since this was a clear layoff situation, probably not worth contesting anyway.

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Smart thinking. Pick your battles carefully with Washington ESD contests.

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The rates can vary quite a bit depending on your industry too. Some industries have higher baseline rates because they historically have more claims. Construction, hospitality, and seasonal work tend to have higher rates.

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We're in professional services, so hopefully that works in our favor rate-wise.

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Yeah, professional services typically have lower rates since layoffs are less common. You should be okay.

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Don't forget that you can also be liable for benefits if someone is on standby status. If you have seasonal workers who might be called back, they can collect unemployment while waiting.

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We don't have seasonal workers, but that's good to know for the future.

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Just something to keep in mind if your business model ever changes.

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Another thing - make sure you respond to any wage verification requests promptly. Washington ESD needs to verify the person's wages to calculate their benefit amount, and delays can cause issues.

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How do they usually request wage information? Mail, email, or through their online system?

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Usually through mail or their online employer portal. Sometimes they'll call if there are questions, but good luck getting through to them. That's where Claimyr really helped me out.

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Keep in mind that even if you contest a claim and win, you might still be liable for benefits if the person appeals and wins at a higher level. The appeals process can drag on for months.

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Sounds like a complex system. Glad we have a straightforward layoff situation.

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Yes, it can get complicated quickly. Documentation is key if you ever need to contest.

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Also be aware that if you have employees in multiple states, each state has different rules. Washington ESD only covers Washington employees, so if you have workers elsewhere, you'll deal with those states separately.

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We're Washington only right now, but that's useful to know for expansion.

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Multi-state compliance can be a nightmare. Stick to one state as long as possible!

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One last thing - make sure your payroll system is calculating and paying the correct unemployment taxes. The rate changes annually and there's both state and federal portions.

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We use a payroll service, so hopefully they're handling that correctly.

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Good idea. But still worth double-checking their work, especially if your rate changes due to claims experience.

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Payroll companies make mistakes too. I've seen incorrect rates applied for months before anyone noticed.

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The bottom line is that unemployment claims are a cost of doing business. Build it into your budget and focus on good hiring and management practices to minimize claims over time.

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That's a good perspective. I was worried this would be a huge financial hit, but it sounds manageable.

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Exactly. One claim won't break you, but multiple claims can add up. Just be prepared and respond promptly to any notices.

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If you're really concerned about the impact, you might want to consult with an employment attorney who specializes in unemployment law. They can review your policies and procedures.

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Good suggestion. Might be worth it as we grow and have more employees.

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Prevention is always cheaper than dealing with problems after they arise.

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For what it's worth, most employees who file for unemployment after layoffs are just trying to get by until they find new work. It's not personal against the employer.

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You're right. I don't blame them at all for filing. We just had to make tough decisions due to budget constraints.

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That's the right attitude. These systems exist for a reason.

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Make sure you understand what constitutes 'suitable work' for your former employee. If they turn down a job offer that Washington ESD considers suitable, their benefits can be suspended and you won't be charged for those weeks.

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Interesting. How would we know if they turned down suitable work?

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Washington ESD investigates if there are reports of refused work. Sometimes employers will notify them if they offer a job that gets refused.

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The whole system is designed to be temporary support while people look for work. Most people don't want to be on unemployment long-term.

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That makes sense. The person we laid off was a good employee, so I hope they find something quickly.

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With the job market being decent right now, hopefully they'll be back to work soon.

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Just remember that the unemployment system is insurance - you pay premiums (taxes) and sometimes you have claims. It's similar to workers' comp or any other business insurance.

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That's a helpful way to think about it. Takes some of the sting out of the cost.

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Exactly. And unlike some insurance, you can actually influence your rates through good employment practices.

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One more tip - keep detailed records of any separation agreements or severance packages. These can sometimes affect unemployment eligibility or benefit amounts.

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We didn't do a formal separation agreement, but we did pay out accrued vacation time.

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That's fine - vacation payouts usually don't affect unemployment eligibility. Just good to document everything.

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