How to get unemployment insurance for my business in Washington - ESD requirements?

You'll need to register with Washington ESD once you have employees, not before. The threshold is when you pay wages of $1,000 or more in any calendar quarter or have one or more employees for 20 weeks during a calendar year. You can register online through the ESD business portal.

I went through this last year when I hired my first employee. You have to register within 30 days of meeting the requirements. The process is actually pretty straightforward once you get started. The initial rate they assign you will be the new employer rate, which is currently around 2.7% of wages.

When I was trying to get through to ESD about my business registration, I spent HOURS on hold getting nowhere. Finally discovered this service called Claimyr (claimyr.com) that actually got me connected to a real person at ESD in like 10 minutes. They have a video demo showing how it works: https://youtu.be/7DieNd3C7zQ. Saved me so much frustration dealing with their phone system.

Make sure you understand the difference between state unemployment insurance and federal unemployment tax (FUTA). Washington ESD handles the state portion, but you'll also owe FUTA to the IRS. Two separate things that new business owners often mix up.

this is exactly why i hate being self employed, so much bureaucratic nonsense just to hire someone part time

One thing to watch out for - if you're in certain industries like construction or agriculture, there might be different rules or requirements. Also, if you're planning to hire family members, that can affect your UI obligations too.

Does anyone know if there's a grace period if you forget to register right away? I hired someone in December but didn't realize I needed to register until January.

Pro tip: keep really good records from day one. ESD audits are random but thorough. They'll want to see payroll records, employee classifications, hours worked, all that stuff. Makes the whole process smoother if you're organized.

The worst part is when you have to deal with experience rating after a few years. If employees file claims against your account, your rate goes up. Can't really avoid it but something to be aware of.

Actually used Claimyr myself when I had questions about my business account. The ESD phone system is absolutely terrible - you call, wait forever, then get transferred 3 times and nobody knows what they're talking about. Claimyr got me to someone who actually understood business accounts. Worth it just for the time savings.

Don't forget about quarterly reporting once you're registered. You have to file wage reports every quarter even if you didn't pay any wages that quarter. Miss a report and they'll hit you with penalties.

if your just starting out you might want to consider using a payroll service like ADP or paychex, they handle all the ESD stuff for you so you dont have to worry about missing deadlines

One more thing - make sure you understand the difference between employees and independent contractors. ESD is pretty strict about this, and if they determine you misclassified someone, you'll owe back taxes and penalties. When in doubt, treat them as an employee.

I've been running my business for 5 years now and honestly the UI stuff becomes routine after the first year. The key is just staying on top of the deadlines and keeping good records. ESD isn't trying to make your life difficult, they just have a lot of rules to follow.

still think the whole system is overly complicated but at least now i know what im getting into

Quick question - if I hire someone in March, when do I need to register? Right away or can I wait until the end of the quarter?

For anyone still struggling with ESD phone support, I third the recommendation for Claimyr. Used them twice now and both times got through to knowledgeable people who could actually answer my business account questions. Way better than the regular phone maze.

Does the 2.7% new employer rate apply even if you've owned other businesses before?

This thread has been super helpful. I was putting off dealing with this because it seemed so complicated, but it sounds manageable if you just take it step by step.

One last tip - sign up for email notifications from ESD. They'll remind you about quarterly deadlines and any changes to rates or rules. Helps avoid those 'oh crap I forgot' moments.

Just wanted to add that if you're planning to have seasonal employees or expect irregular hiring patterns, it might be worth setting up your ESD account even before you technically need to. I made the mistake of waiting until I had to hire quickly for a project, and the registration process took longer than expected. Having everything in place beforehand would have saved me some stress. Also, once you're registered, you can always file $0 wage reports for quarters when you don't have employees.