Why do employers pay unemployment taxes in Washington - confused about how this works

That makes sense I guess, but what happens if a company goes out of business? Do they still have to pay?

Good question - if a company goes bankrupt, Washington ESD has ways to collect what's owed, but it can get complicated. The federal and state systems are designed to handle these situations.

Wait, so if my company laid off a bunch of people last year, they're paying more in unemployment taxes now?

Exactly! It's called experience rating. Companies with higher turnover or more layoffs pay higher unemployment tax rates to Washington ESD.

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

They handle the calling and waiting, then connect you when they get through. Way better than spending all day redialing Washington ESD myself.

Interesting, might have to try that. I've been calling Washington ESD every morning for two weeks with no luck.

Never thought about it that way but it makes total sense. If unemployed people have money to spend, it helps all businesses.

Exactly! It's one of those systems that seems counterintuitive at first but actually serves a broader economic purpose.

So I never paid into unemployment while I was working? That's weird.

nope, thats all on the employer side. you pay social security and medicare taxes but unemployment is 100% employer funded

Actually in a few states employees do pay small unemployment taxes but Washington isn't one of them. Here it's all employer-funded.

Makes sense historically I guess. Better than having no safety net at all.

Right, and it prevents a complete economic collapse when unemployment spikes suddenly like we saw in 2020.

It's variable based on several factors - the employer's payroll size, their layoff history, and the overall health of the unemployment fund. New employers start at a standard rate.

So a company that never lays anyone off pays less than one that does mass layoffs regularly?

Correct! It incentivizes employers to maintain stable employment when possible.

Wait, so if my employer doesn't pay their unemployment taxes, I can't get benefits?

Not exactly - you're still eligible but it can cause delays while Washington ESD sorts out the employer's account. The Claimyr thing really helped speed up getting this resolved.

How much does Claimyr cost? Might be worth it if I can actually talk to someone at Washington ESD.

Better managed? Have you tried calling them lately? It's a nightmare.

I meant financially managed - the fund stays solvent. The customer service is definitely another story unfortunately.

I understand the frustration, but you can't opt out because it's not actually your money - it's insurance your employer is required to carry, similar to workers compensation.

Still seems stupid. If I lose my job I should rely on my own savings not some government program.

That's fine in theory but most people don't have 6+ months of expenses saved up. Unemployment benefits keep people from becoming homeless.

Yes, but there are different thresholds. Generally if they have employees and meet certain payroll requirements, they have to participate in the unemployment system.

What about independent contractors? I did 1099 work before this job.

True independent contractors don't qualify for regular unemployment, but during COVID there was PUA for gig workers. That program ended though.

That's actually a good point. I never thought about unemployment as insurance before this conversation.

Exactly - it's employment insurance, just like car insurance or homeowners insurance. You hope you never need it but it's there if you do.

Seriously try that Claimyr service I mentioned earlier. It's the only way I've been able to reach anyone at Washington ESD in months.

gonna check it out right now, thanks

This thread has been really helpful. I had no idea how any of this worked before.

Glad it helped! The unemployment system is complex but the basic principle is pretty straightforward once you understand it.

Your brother's not wrong that it's a cost, but it's a necessary one. Imagine if there was no unemployment system during the pandemic - the economic collapse would have been much worse.

True, I never thought about it from that perspective.

You're lucky! I've been waiting 6 weeks for my claim to clear adjudication.

That's frustrating. Have you tried calling them or just waiting it out?

Calling is hopeless. Might try that Claimyr thing people mentioned.

So if I quit my job for a good reason, I might still be eligible for unemployment?

Potentially, but 'good cause' has a specific legal definition. Things like unsafe working conditions or harassment might qualify, but you'd need to prove it to Washington ESD.

Thanks everyone for explaining this. Makes way more sense now.

No problem! It's one of those things that seems weird until you understand the logic behind it.

What are the current maximum weekly benefits in Washington? I haven't checked recently.

I think it's around $900+ per week maximum now, depending on your previous earnings. Much better than states that cap it at $300-400.

Seems like a lot of people here have had success with that service.

Yeah, worth every penny to avoid the frustration of calling Washington ESD directly. Their phone system is just overwhelmed.