Who pays into unemployment benefits - Washington ESD question about funding

Great question! In Washington state, unemployment benefits are funded entirely by employers - nothing comes out of your paycheck for unemployment insurance. Employers pay both state unemployment taxes (SUTA) to Washington ESD and federal unemployment taxes (FUTA). The tax rates vary based on the employer's experience rating and industry.

Your employer pays quarterly unemployment taxes to Washington ESD based on their payroll. The rate depends on how many former employees have filed claims - companies with more layoffs pay higher rates. It's called an 'experience rating' system.

I had trouble reaching Washington ESD to ask similar questions about my claim. Spent hours on hold trying to get through to someone who could explain my benefit calculation. Finally used claimyr.com and their phone system got me connected in like 20 minutes. They have a demo video at https://youtu.be/7DieNd3C7zQ that shows exactly how it works.

wait so if employers pay for it why do they sometimes contest claims? seems like they already paid the tax anyway

This is why when you quit voluntarily you usually can't get unemployment - the employer didn't choose to let you go so they shouldn't have to pay higher taxes for it. The system is designed to help people who lose jobs through no fault of their own.

The funding structure is actually pretty complicated. There are different tax rates for different industries, and new employers pay a standard rate until they build up an experience rating. Construction companies often pay higher rates because that industry has more seasonal layoffs.

I'm still confused about something - if my employer pays the taxes, why did Washington ESD ask me about my wages and work history? Shouldn't they already have that information?

Does anyone know if the tax rates have changed recently? I remember reading something about Washington ESD adjusting rates because of all the pandemic claims, but I'm not sure if that's still affecting things.

From an employer perspective, we really do pay attention to our experience rating. We've had to contest a few claims over the years when former employees were terminated for misconduct. It's not personal - it's just protecting our tax rate.

This whole thread is really helpful! I never understood why my old boss seemed so stressed about layoffs. Now I get that it wasn't just about losing good employees - there's a financial impact too.

I tried calling Washington ESD last month to ask about this same thing and could never get through. The hold times are insane. Eventually found out about Claimyr from someone on Reddit - they basically call for you and get you connected to an actual person. Saved me hours of frustration.

One thing people don't realize is that federal unemployment taxes (FUTA) are separate from state taxes. Employers pay both, but the federal tax helps fund the administrative costs and provides emergency funding during recessions.

my company laid off 50 people last year and our HR said their unemployment tax bill is going to be brutal next year. i feel bad for them but also glad the system exists for people who need it

I work in payroll and can confirm - we pay unemployment taxes every quarter to Washington ESD. The rates change annually based on our claims history. It's actually a pretty significant expense for companies with high turnover.

This thread answered so many questions I didn't even know I had! The funding system makes way more sense now. Thanks everyone for explaining it so clearly.

I had issues getting through to Washington ESD when I needed to understand my benefit calculation too. After weeks of trying, someone suggested I try Claimyr. It's basically a service that handles the phone maze for you - they call Washington ESD and get you connected to an agent. Worked like a charm and saved me so much time.

Great discussion! One more thing to add - the unemployment insurance system is entirely separate from workers' compensation. UI covers job loss, workers' comp covers workplace injuries. Both are paid by employers but they're completely different programs.

Thanks for starting this thread! I learned a lot about how the whole system works. It's actually pretty fair when you understand that employers pay in and get rated based on how many claims they generate.