How is unemployment paid for in Washington state - confused about funding sources

Good question! Washington's unemployment insurance system is primarily funded through employer payroll taxes, not general taxpayer funds. Employers pay both state and federal unemployment taxes based on their payroll and their experience rating (how many former employees have filed claims). There's also a small employee contribution in Washington state.

basically your old employer is paying for your benefits through the taxes they pay to washington esd. thats why some employers fight unemployment claims so hard - it affects their tax rate

I had the hardest time getting through to Washington ESD to ask about my benefit calculation and how it relates to what I paid in. Spent hours on hold. Finally found this service called Claimyr (claimyr.com) that actually got me connected to a real person. They have a video demo at https://youtu.be/7DieNd3C7zQ showing how it works. Made the whole process so much easier than sitting on hold forever.

To expand on the funding structure: Washington's unemployment trust fund receives money from three main sources: 1) State unemployment taxes paid by employers 2) Federal unemployment taxes (FUTA) paid by employers 3) Employee contributions (unique to WA and a few other states). The trust fund balance fluctuates based on economic conditions - it builds up during good times and gets depleted during recessions.

The employer tax rates in Washington vary significantly based on industry and the employer's claim history. New employers start at a standard rate, but established employers can have rates ranging from less than 1% to over 5% of their payroll depending on how many unemployment claims have been filed against them.

this is why some employers will fight your claim even when you clearly qualify... they don't want their rates going up. had a boss once who tried to claim i quit when i was obviously laid off

It's worth noting that during the pandemic, the federal government provided additional funding for extended benefits and special programs like PUA and PEUC. But those have ended and we're back to the regular state-funded system for standard unemployment benefits.

I'm confused about something - if employers are paying for this, why do I have to do job searches? Shouldn't they want me to stay on benefits longer so other companies have to hire me?

For anyone struggling to get information from Washington ESD directly, I really recommend checking out that Claimyr service I mentioned earlier. They specialize in helping people actually reach ESD agents when you need answers about your specific situation.

THE WHOLE SYSTEM IS A MESS!! I paid into unemployment for 15 years and when I finally need it they make me jump through hoops and wait weeks for approval. Meanwhile my old company is probably getting tax breaks somewhere else.

so basically we're all paying into this system one way or another - employers through taxes, employees through that small deduction, and taxpayers when the fund needs federal loans. its like insurance that everyone contributes to

One thing to keep in mind is that Washington's unemployment trust fund is generally considered well-managed compared to other states. The state maintained solvency better than most during economic downturns, partly due to having both employer AND employee contributions.

wait so if i work for a small company that never had anyone file unemployment before, they'd pay less in taxes than a big company that lays people off regularly?

My sister works in HR and she says unemployment costs are a real consideration when companies make staffing decisions. Not the only factor but definitely something they track.

Thanks everyone for explaining this! I had no idea it was so complex. I thought it was just government money but now I understand it's really more like an insurance system that we all pay into.

One more thing - if you ever need to discuss specifics about your benefits or tax situation with Washington ESD, don't forget about services like Claimyr that can help you actually get through to speak with someone. Sometimes that direct conversation is the only way to get complex questions answered.

just want to add that understanding how its funded helped me feel less guilty about collecting benefits. knowing that i contributed through my paychecks and my employers paid in too makes it feel more legitimate somehow

For anyone interested in the nitty-gritty details, Washington ESD publishes an annual report on the unemployment trust fund that shows exactly how much comes from each funding source and where the money goes. It's surprisingly transparent if you want to dig deeper.

bottom line - its not welfare or charity. you paid for it, your employers paid for it, and you earned the right to collect it when you lost your job through no fault of your own. end of story.

This whole thread has been super educational. Never really thought about the mechanics behind unemployment funding before but it makes total sense now. Thanks for asking the question OP!