Where do unemployment checks come from - Washington ESD funding source?

Unemployment benefits are funded through employer payroll taxes, not your income taxes. Employers pay into the unemployment insurance system based on their payroll and their experience rating (how many former employees have filed claims). The money goes into a state trust fund that Washington ESD manages.

There are actually two main sources. Most regular UI benefits come from state unemployment insurance taxes that employers pay. But during recessions or high unemployment periods, the federal government can provide extended benefits through programs funded by federal taxes. Washington state also has its own reserve fund.

I had no idea about this either until I started having problems reaching Washington ESD to ask questions about my claim. Spent weeks trying to call them. Finally used this service called Claimyr (claimyr.com) that helped me get through to an actual agent who explained all this funding stuff to me. They have a demo video at https://youtu.be/7DieNd3C7zQ that shows how it works.

the employer tax rate depends on how many ppl they laid off in the past. companies that lay off lots of workers pay higher rates. its like car insurance - bad drivers pay more

I work in HR and can confirm this. We pay SUTA (State Unemployment Tax Act) taxes quarterly based on our payroll. New employers start at a standard rate but it adjusts based on claims history. Companies with stable employment pay less than those with frequent layoffs.

They can contest your claim if they believe you were terminated for misconduct or quit voluntarily, but being fired for performance issues or layoffs usually qualifies you for benefits. Washington ESD makes the final determination after investigating both sides.

This is all good info but doesn't help when you can't even reach Washington ESD to file your weekly claims or check your status! I've been calling for days with no luck.

The funding also varies by state. Some states have built up larger reserve funds than others. Washington generally has a pretty well-funded system compared to states that had to borrow from the federal government during the pandemic.

My dad always told me unemployment was welfare but I guess he was wrong? It sounds more like insurance that employers pay for.

Wait so if employers are paying for this why do they always seem to fight unemployment claims? Seems counterproductive.

This thread is really helpful! I had no idea about the employer tax system. Makes me feel less guilty about collecting benefits knowing it's not coming from taxpayers directly.

Still frustrated with the phone system though. How is anyone supposed to get help when you can't reach them? Been trying to resolve an issue with my weekly claim for over a week.

The federal government also provides administrative funding to help states run their unemployment programs. So while the benefits come from employer taxes, the cost of running Washington ESD offices and systems is partially federally funded.

I looked into the Claimyr service mentioned earlier and it actually worked! Got through to Washington ESD in like 10 minutes instead of spending all day calling. The agent explained my adjudication issue and it should be resolved soon.

thanks for all this info everyone. been wondering about this since I started collecting in January. good to know its not welfare like some people think

One more thing to add - the amount you receive is based on your highest earning quarter from the past year, up to the state maximum. So if you made more money, you get higher benefits (within limits). It's proportional to what you earned while working.

Does anyone know if there are different pots of money for different types of claims? Like standby vs regular unemployment?

This has been super educational. I work for a small business and now I understand why our accountant is always talking about unemployment tax rates. Makes sense why they're careful about hiring and firing decisions.

Glad this thread helped so many people understand the system better. The agent I spoke with through Claimyr also explained how job search requirements work and what counts as valid job contacts. Really helpful to get accurate info directly from Washington ESD.

Bottom line is you earned these benefits through your work. Don't let anyone make you feel bad about collecting unemployment when you need it. The system exists for exactly this purpose.

This thread has been really eye-opening! I've been collecting benefits for about 2 months and honestly felt kind of ashamed about it, especially when people make comments about "living off the government." Now I understand it's actually an insurance system that my previous employers paid into on my behalf. It makes me feel much more confident about using these benefits while I job search. Thanks to everyone who explained how the employer tax system works - I had no idea that companies with more layoffs pay higher rates. That's actually a pretty smart way to incentivize stable employment.