by Matt Landers, Director of Public Policy & Government Relations
| Feb 01, 2021
On Friday night, the Washington State Legislature passed ESSB 5061
, an emergency bill to address the significant increases in unemployment insurance faced by businesses at the start of this year. GSBA supported these efforts and will continue to advocate for continued support of small businesses in the management of the unemployment system as well as efforts to keep the program fully funded so that it can continue its essential role for workers. This bill reduces the various automatic formulas that determine unemployment insurance rates, as well as increases the benefits for the neediest workers. In total, this bill represents over $1 billion in taxes that are being waived or delayed.
What will ESSB 5061 do for employers?
- Experience rate: the benefit ratio calculation period is extended from 4 to 5 years, resulting in a lower average experience rate
- Social tax: maximum lowered from 1.22% currently to 0.5% in 2021, gradually increasing to 0.9% in 2025
- Solvency surcharge: suspended for 5 years. This is an automatic surcharge that typically kicks in when the fund is below a certain level, to a maximum of 0.2%
- Voluntary Contribution surcharge: will not be charged through May 2026
- Shared Work programs: now 100% reimbursed by federal CARES Act through March 14, 2021 and will not be charged to employers
- Makes certain unemployment insurance benefits non-chargeable to employers' experience rates, including all weeks between March 21 and May 30, 2020.
What will ESSB 5061 do for employees?
- Expands eligibility for those in high-risk households, particularly in instances where someone in a high-risk household leaves work voluntarily
- Waives waiting period when federally reimbursed
- Increases weekly benefit threshold by increasing minimum from 15% to 20% of average weekly wage (maximum remains the same)
- Ends deduction of lump sum pensions from weekly benefit amounts
You can read the full bill here, or the Legislature's 6-page summary here.
This bill now heads to the Governor's desk for final signature. As it is designated emergency legislation, it will take effect immediately.
Later this week there will be additional emergency bills that impact small businesses, including HB 1095 which makes certain COVID relief grants tax-exempt, and a new $2.2 billion COVID relief bill.
Please reach out to GSBA staff if you have any questions about ongoing legislative work (MattL@thegsba.org) or how these new rules might impact your business (firstname.lastname@example.org).