Who pays for unemployment benefits in Washington - confused about funding source

That makes sense! So when I collect unemployment, it's basically coming from taxes my employer already paid?

Exactly. Your employer has been paying into the system the whole time you worked there, which is why you're entitled to benefits when you become unemployed through no fault of your own.

So I never paid into this system directly from my paychecks? That's different than I thought.

Correct - Washington is one of the states where employees don't contribute to unemployment insurance. It's entirely employer-funded here.

Employers with higher turnover rates pay higher unemployment tax rates. It's called an 'experience rating' system - basically rewards companies that keep stable workforces.

oh wow that explains why my old company was so reluctant to let people go even when business was slow

I was having the same problem until I found Claimyr.com - they help you get through to Washington ESD agents by phone. There's even a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works. Saved me hours of calling and getting hung up on.

Really? How does that work exactly? I'm desperate at this point.

It automates the calling process and waits on hold for you, then connects you when an agent picks up. Much better than sitting there redialing all day.

wait really? so if a company has a lot of layoffs they get penalized with higher taxes?

Yes, it's called experience rating. Companies with higher turnover and more UI claims pay higher tax rates. It incentivizes employers to maintain stable employment.

That's actually brilliant design. Makes employers think twice before just laying everyone off.

Because when former employees collect unemployment, it can raise the employer's tax rate for future years. They have a financial incentive to contest claims they think are questionable.

That seems really unfair to workers who legitimately need help

It is unfair! My employer contested my claim even though they laid me off due to budget cuts. I had to go through the whole appeal process.

Is that legit? I've been dreading trying to call Washington ESD because I heard the wait times are terrible.

Yeah it's real. I was skeptical too but it actually got me through to someone in like 20 minutes instead of spending hours on hold.

Anything that helps with those impossible Washington ESD phone lines sounds good to me!

So the extra $600 weekly payments during the pandemic came from federal funds, not Washington state?

Exactly - those were federal programs like FPUC (Federal Pandemic Unemployment Compensation). Regular state benefits are still employer-funded.

Wow that's a huge range. So some companies pay 30 times more than others?

Correct. It's based on a formula that looks at the employer's UI benefit charges compared to their total wages paid over a specific period.

No wonder some companies fight unemployment claims so hard. It directly affects their tax rate.

The state can borrow from the federal government to keep paying benefits. Then they either raise employer tax rates or get federal loans to replenish the fund.

This happened during the Great Recession - several states had to borrow billions to keep unemployment programs running.

Thank you for saying this! I felt bad about applying but you're right, it's literally what the system is designed for.

Exactly. The stigma around unemployment is ridiculous when it's literally an insurance program funded by employer taxes.

So complicated! No wonder people get confused about where the money comes from.

It is complex, but the important thing for workers to know is that it's employer-funded and you've earned the right to benefits through your work history.

The complexity is intentional to discourage people from claiming what they're entitled to, IMO.

So taxpayers do contribute something to the system?

Only for running the program - paying Washington ESD staff, maintaining computer systems, etc. Your actual benefit checks come entirely from employer contributions.

Do you mind sharing what rate your company pays? Just curious about real-world numbers.

We're at about 2.1% right now. We had some layoffs during COVID which raised our rate, but it's been coming down as our claims history improves.

That seems fair. Companies that create more unemployment claims should pay more into the system.

The taxes just fund the system - you still have to qualify for benefits under Washington ESD rules. Being laid off vs fired for misconduct affects eligibility.

Makes sense, thanks for clarifying that!

How does it work exactly? Do they just call for you?

They have some system that monitors the phone lines and connects you when an agent becomes available. Way better than hitting redial 100 times.

Is that why some states ran out of money during the pandemic?

Exactly. Some states had to borrow from the federal government when their trust funds were depleted by massive unemployment during COVID.

Washington was actually in better shape than most states, if I remember right.

Yes, some states require employee contributions while others don't. Washington, Texas, and Florida are examples of employer-only funded systems.

Interesting! I moved here from Pennsylvania where I did pay into unemployment. Good to know Washington works differently.

Makes sense. Those industries probably generate way more UI claims than something like healthcare or government jobs.

Yeah, it's all about risk assessment. Higher risk of layoffs = higher tax rates.

Have you tried using Claimyr? I was stuck in the same situation and they got me connected to an actual Washington ESD agent who explained that my benefit calculation had changed due to additional wage information.

I haven't heard of that service. Is it legitimate?

Yeah, it's at claimyr.com - they have a demo video showing exactly how it works. Much better than the endless busy signals.

Don't feel guilty at all! You earned those benefits through your work history. The system exists specifically to help people during unemployment.

Thanks, that's reassuring. The job market is brutal right now.

It's based on the employer's 'experience rating' - how many former employees have filed unemployment claims and the total amount paid out. New businesses start at a standard rate.

That explains why some companies are so reluctant to lay people off even when business is slow - it directly affects their future tax costs.

Some large employers can choose to reimburse the state directly for unemployment benefits paid to their former employees instead of paying quarterly taxes. It's usually only cost-effective for very large companies.

Ah, that makes sense for a big staffing company with lots of temporary placements.

Same here! I learned a lot from everyone's responses. Thanks for all the detailed explanations.

Just remember you still need to follow all the job search requirements and report any work accurately - the funding source doesn't change your obligations as a claimant.

Federal employees have a separate program called UCFE (Unemployment Compensation for Federal Employees) but it's administered through state systems like Washington ESD.

Good to know, thanks!

That's exactly what it is - unemployment insurance! Your employers have been paying premiums on your behalf throughout your work history.

It's one of those things you hope you never need but are grateful exists when you do need it.

Programs like PUA (Pandemic Unemployment Assistance) were federally funded, not through state employer taxes. Those were temporary emergency programs that have since ended.

Right, regular Washington unemployment is employer-funded but emergency extensions usually come from federal money.

Knowledge definitely helps reduce anxiety! Focus on your job search and following Washington ESD requirements - you've earned these benefits.

Absolutely. And if you need to talk to Washington ESD about your claim, definitely consider using Claimyr to avoid the phone tag nightmare.

I'll keep that in mind if I run into any issues. Thanks everyone!

Right? It's not charity, it's literally earned benefits through the employment relationship.

Wish they taught this stuff in school. So many people don't understand how these systems actually work.

So if you make $100k, your employer only pays UI taxes on the first $68,500?

Correct. It's similar to how Social Security taxes work - there's a wage cap.

Thanks for all the info everyone! I feel much better about filing my claim now that I understand how the system is funded.

You should feel good about it! You worked, your employer paid into the system, and now you get the benefits when you need them. That's exactly how it's supposed to work.

Never thought about that aspect. So the fund grows even when it's not being used?

Yes, the state invests the money conservatively to preserve capital while earning some return. Helps keep the system sustainable long-term.

That's really smart financial planning by the state! Makes me feel even better about the system knowing it's designed to be self-sustaining rather than just draining resources.

This whole conversation has been eye-opening! I had no idea the system was so comprehensive - from employer-funded taxes to investment returns on the trust fund. Really changes how I think about unemployment benefits. Thanks everyone for breaking it all down so clearly!

I'm so glad this thread helped you too! The guilt around collecting unemployment is so common but completely unnecessary. You earned those benefits through your work history, and the system exists specifically to help people like us during job transitions. It's reassuring to know that employers have been paying into this insurance system all along - makes it feel less like charity and more like what it actually is: earned benefits. Good luck with your job search!