If they haven’t already, businesses across Washington State should be preparing to pay significantly more next year in unemployment security taxes.
Record claims during the pandemic have drawn down the state’s trust fund for benefits, which is fed by taxes on employers. The new taxes will work to replenish the fund.
Until now, the issue has been discussed during off-season Legislative committee meetings and within a task force of business and labor representatives. But it’s now beginning to receive media coverage.
Washington Retail contract lobbyist Bruce Beckett commented in an online Lens article that the new business tax burden would be a drag on the economy and discourage employers from hiring back laid off workers.
The Seattle Times editorialized that the 2021 Legislature needs to find relief for businesses. This year alone, for example, the state expects to pay out approximately $5.3 billion in unemployment benefits compared with just $1.01 billion in 2019, before the pandemic broke out, according to recently released figures from the state Employment Security Department.
The Times projects that employers’ unemployment taxes next year could rise $224 per employee for workers earning at least $56,500 a year.
Washington Retail believes employers should not be penalized for pandemic related unemployment insurance costs; those costs were driven by pandemic related curtailments, not business decisions. We are advocating for some portion of federal CARES Act funding to be used to help replenish the unemployment insurance trust fund. It further urges the Legislature to amend the UI tax system, even temporarily, to avert the massive tax hikes projected over the next two years.