When does an employer not have to pay unemployment benefits in Washington ESD?
I'm trying to understand the rules around when employers don't have to contribute to unemployment insurance. My boss mentioned something about certain types of workers not being covered, but I want to make sure I understand this correctly. Does anyone know the specific situations where Washington ESD doesn't require employers to pay into the unemployment system? I'm particularly confused about independent contractors vs employees and whether there are exemptions for small businesses or certain industries.
59 comments


Fatima Al-Farsi
There are several categories where employers don't pay unemployment taxes in Washington. Independent contractors are the big one - if you're properly classified as a 1099 contractor, your employer doesn't pay UI taxes for you. Also, certain family members working for family businesses, some agricultural workers, and employees of non-profit religious organizations are often exempt.
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Giovanni Greco
•Thanks! How do I know if I'm properly classified as an independent contractor vs employee? I feel like my boss might be misclassifying me.
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Fatima Al-Farsi
•Washington ESD has specific tests for this - it's about control, financial relationship, and type of relationship. If your employer controls when, where, and how you work, provides equipment, and you do work that's integral to their business, you're probably an employee.
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Dylan Wright
I had this same confusion when I got laid off! Turns out my employer WAS paying into unemployment the whole time, I just didn't realize it shows up differently on paystubs. But yeah, independent contractors are definitely not covered unless they opt into voluntary coverage.
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Giovanni Greco
•Wait, there's voluntary coverage for contractors? How does that work?
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Dylan Wright
•Yeah, independent contractors can elect coverage through Washington ESD if they want to pay into the system themselves. But most people don't know about it.
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Sofia Torres
If you're having trouble getting through to Washington ESD to clarify your employment status, I found this service called Claimyr that helps you actually reach an agent. They have a video demo at https://youtu.be/7DieNd3C7zQ and their website is claimyr.com. Really helped me when I couldn't get through the phone lines to resolve my classification question.
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Giovanni Greco
•Interesting, I've been trying to call Washington ESD for weeks about this. How does Claimyr actually work?
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Sofia Torres
•They basically help you navigate the phone system and get connected to an actual person at Washington ESD. Way easier than spending hours on hold only to get disconnected.
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GalacticGuardian
Also worth noting that even if your employer doesn't pay unemployment taxes, that doesn't automatically mean you can't get benefits. Sometimes there are issues with misclassification or unreported wages that Washington ESD can investigate.
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Dmitry Smirnov
•This is so confusing! I worked for a company that said I was a contractor but treated me like an employee. When I filed for unemployment, Washington ESD is investigating the whole thing.
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GalacticGuardian
•That's exactly the kind of case where ESD will do a classification review. They'll look at the actual working relationship, not just what the employer called you.
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Ava Rodriguez
Small businesses still have to pay unemployment taxes in Washington as long as they meet the threshold requirements. I think it's if they pay wages of $1,000 or more in any quarter, but don't quote me on the exact amount.
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Fatima Al-Farsi
•You're close - it's actually if they pay wages of $1,000 or more in any calendar quarter, or if they have one or more employees for 20 weeks during the year, whether consecutive or not.
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Ava Rodriguez
•Thanks for the correction! The rules are pretty specific.
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Miguel Diaz
One thing people don't realize is that even if your employer wasn't supposed to pay unemployment taxes, you might still be eligible for benefits if you have other qualifying wages from a different job within your base period.
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Giovanni Greco
•What's a base period? I keep seeing that term but don't understand it.
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Miguel Diaz
•The base period is the first four of the last five completed calendar quarters before you file your claim. Washington ESD looks at your wages during that time to determine eligibility and benefit amount.
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Sofia Torres
Speaking of getting answers from Washington ESD, I can't stress enough how much Claimyr helped me. Instead of playing phone tag for weeks, I got connected to an agent who explained my whole situation in one call. Definitely worth checking out their site at claimyr.com if you're stuck in phone hell.
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Zainab Ahmed
•I'm skeptical of services like this. Can't you just call Washington ESD directly?
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Sofia Torres
•Sure, you can try calling directly, but good luck getting through. I tried for three weeks before using Claimyr. Sometimes paying for a solution is worth your sanity.
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Connor Gallagher
There are also some weird exemptions for things like real estate agents, insurance agents, and some commission-only sales positions. The rules get pretty complex depending on your industry.
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Giovanni Greco
•I work in sales on commission - does that mean my employer doesn't pay unemployment for me?
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Connor Gallagher
•Not necessarily. It depends on how the commission structure works and whether you're classified as an employee or independent contractor. You should check with Washington ESD directly.
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Dmitry Smirnov
UGH this is all so complicated! Why can't they just make it simple - if you work, you're covered. Period. The whole contractor vs employee thing is such a mess and employers abuse it constantly.
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Fatima Al-Farsi
•I understand the frustration, but there are legitimate reasons for different classifications. The key is making sure employers aren't misclassifying people to avoid paying taxes.
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Dmitry Smirnov
•Yeah but how are regular workers supposed to know all these rules? It should be the employer's responsibility to get it right, not ours to figure out if we're being cheated.
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AstroAlpha
Also, don't forget about the lookback rule. Even if your most recent employer didn't pay unemployment taxes, Washington ESD will look at all your employers during the base period to see if you have enough qualifying wages from other jobs.
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Giovanni Greco
•That's actually really helpful to know. I had three different jobs last year with different employment arrangements.
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AstroAlpha
•Exactly! As long as you have enough qualifying wages from covered employment during your base period, you could still be eligible even if your last job wasn't covered.
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Yara Khoury
Here's something most people don't know: if you think you were misclassified, you can request a determination from Washington ESD. They'll investigate and if they find you were actually an employee, your employer might have to pay back taxes plus penalties.
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Keisha Taylor
•How do you request that determination? Through the regular Washington ESD website?
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Yara Khoury
•You can file a request online or by phone. There's a specific form for employment classification determinations. Just be prepared - it can take a while to process.
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Paolo Longo
I'm dealing with this exact issue right now. My employer said I was a contractor but I worked set hours at their location using their equipment. Filed for unemployment and now ESD is doing an investigation. It's been two months and still no resolution.
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Sofia Torres
•Two months is a long time! Have you tried using Claimyr to get through to someone who can give you an update? Sometimes these investigations stall and you need to follow up directly with an agent.
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Paolo Longo
•I haven't heard of Claimyr before. Is it legitimate? I'm desperate at this point.
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Sofia Torres
•Yes, it's legit. They just help you navigate the phone system to reach actual ESD staff. Check out their demo video at https://youtu.be/7DieNd3C7zQ to see how it works.
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Amina Bah
Another exemption people forget about is domestic workers in private homes. Nannies, housekeepers, etc. are often not covered unless the employer pays more than a certain threshold amount per quarter.
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Oliver Becker
•What's the threshold for domestic workers?
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Amina Bah
•I believe it's $1,000 per quarter, same as other small employers, but domestic worker rules can be different. You'd need to check with Washington ESD for the current requirements.
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CosmicCowboy
The whole gig economy has made this even more confusing. Companies like Uber and DoorDash classify drivers as contractors, but some states are changing those rules. Washington might be different than other places.
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Natasha Orlova
•Yeah, I drive for rideshare and was told I can't get unemployment because I'm a contractor. But I've heard other drivers in some states can get benefits now.
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CosmicCowboy
•It's definitely state-specific. Washington has been pretty strict about the contractor classification for gig workers, but things are evolving.
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Javier Cruz
One more thing - student workers at colleges and universities are often exempt from unemployment coverage. If you work for your school while enrolled, your employer typically doesn't pay UI taxes for those wages.
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Emma Thompson
•Wait, really? I worked at my college bookstore and thought that was regular employment.
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Javier Cruz
•There are specific rules about student employment. Generally, if you're enrolled at least half-time and working for the same institution, those wages aren't subject to unemployment taxes.
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Malik Jackson
For anyone still confused about their classification, the most important thing is to document everything. Keep records of your work schedule, equipment provided, training received, etc. This evidence matters if there's ever a dispute.
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Giovanni Greco
•That's great advice. I wish I had kept better records when I was unsure about my status.
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Malik Jackson
•It's never too late to start! Even if you're no longer at that job, try to reconstruct what you can remember. Email trails, schedules, anything that shows the nature of the work relationship.
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Isabella Costa
The bottom line is that if you're unsure about your employment classification or whether your employer should have been paying unemployment taxes, don't just assume you're not eligible. File a claim and let Washington ESD make the determination.
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StarSurfer
•Good point. The worst they can say is no, but you might be surprised and find out you are eligible.
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Isabella Costa
•Exactly. I've seen people miss out on benefits they were entitled to because they assumed they weren't covered. Always worth applying.
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Ravi Malhotra
This thread has been super helpful! I had no idea there were so many different exemptions and classifications. Thanks everyone for sharing your knowledge and experiences.
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Giovanni Greco
•Agreed! I feel much more informed now about when employers do and don't have to pay into the unemployment system.
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Sofia Torres
•And remember, if you need to talk to someone at Washington ESD about your specific situation, Claimyr can help you get through. Much better than waiting on hold for hours!
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Freya Christensen
Final reminder - unemployment law changes periodically, so make sure you're looking at current information. What was true a few years ago might not apply today, especially with all the changes that happened during the pandemic.
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Omar Hassan
•Good point about things changing. Always best to get current info directly from Washington ESD or a knowledgeable agent.
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Freya Christensen
•Absolutely. The Washington ESD website has the most up-to-date information, but sometimes talking to a real person is the only way to get clarity on complex situations.
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Dmitry Volkov
One category that hasn't been mentioned yet is elected officials and board members of non-profits. These positions are typically exempt from unemployment coverage in Washington. Also, if you're working for a spouse's business as the only employee, that's usually exempt too. The key thing to remember is that these exemptions are based on the specific working relationship, not just the job title. I've seen cases where someone thought they were exempt but actually weren't because their situation didn't meet all the criteria.
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