Stock photo

Stock photo

State Senate passes $1.7 billion in unemployment insurance tax relief

Targets relief to the most affected businesses; helps low-wage workers by raising their benefits

  • Thursday, January 28, 2021 10:27am
  • Business

All businesses in Washington would see significant relief from unemployment taxes, including reductions in bills due in April, if Senate Bill 5061 is passed by the Legislature by mid-February.

The bill, which passed on the Senate floor Jan. 27 with an overwhelming bipartisan majority, has an emergency clause and if the House also approves it, would take effect as soon as Gov. Jay Inslee signs it into law, according to a state Senate Democrats news release.

SB 5061, sponsored by Sen. Karen Keiser, D-Des Moines, targets relief to the most affected businesses and helps low-wage workers by raising their benefits.

“This issue is urgent,” Keiser said. “Employers are seeing increases of 300% to 500% and more in their unemployment premiums. SB 5061 provides a bridge for those who need it most.”

This bill prevents $1.7 billion in automatic unemployment insurance (UI) tax increases from taking effect from 2021 to 2025, including $920 million this year, triggered by massive, pandemic-induced layoffs in 2020. One of the ways it does that is by removing from businesses’ future UI tax calculations the effects of $1.2 billion in benefits paid out from March 22 through May 30, 2020. That means businesses would never need to pay back the state’s UI trust fund for those benefits.

“That’s like having an accident wiped off of your car insurance record,” said Keiser, whose 33rd District includes SeaTac, Kent, Des Moines, Burien and Normandy Park. “It keeps the insurance company from increasing your rates later on.”

The bill passed on a 42-7 vote and would help the lowest-wage workers by raising the minimum benefit from 15% of Washington’s average weekly wage to 20%. People who make between $21,000 and $27,800 per year would receive a larger share of their weekly wages in benefits. Washington would continue to provide the nation’s highest minimum weekly benefit, which would be projected to rise from $201 to $270 in July.

“This is going to help thousands of low-wage workers in our state who might end up being homeless because they can’t afford to pay the rent or keep the lights on or keep groceries on the table,” Keiser said. “This is real people. This isn’t just numbers.”

Finally, the bill would prepare Washington state better for the next health emergency by making changes that would automatically take effect when the governor declares such an emergency. Among those:

• It would allow people at high risk who cannot work from home to voluntarily quit and still receive UI benefits, while waiving charges from their employer’s experience tax rate.

• It would waive charges for an employer who reduces operations or shuts down due to an infectious public health emergency.

• When federal funds are available, as they have been during this pandemic, it would waive the one-week unpaid waiting period before benefits can be allocated.

The bill would also rebuild Washington state’s UI trust fund to prepare for the next recession. Before the COVID-19 pandemic, the trust fund balance of stood at $4.8 billion, the second strongest in the nation. Absorbing the cost of benefits paid out during the pandemic has reduced the fund to $1.4 billion. Under SB 5061, the trust fund would be projected to grow to $3.2 billion by 2025.

“This is not a perfect bill,” Keiser said. “We still have a lot left to do to help workers who were hit hard by this pandemic and by delays in getting their benefits. We are working on legislation, including bills sponsored by my colleagues Sen. Steve Conway (SB 5193) and Sen. Rebecca Saldaña (SB 5064), to make the system more responsive to workers as well as expanding who can receive benefits.

“In a crisis like this awful pandemic, we have to rely on the strength and resiliency of the safety net we already have in place. Fortunately, ours is of the strongest in the country. But the pandemic has also revealed where our systems need significant improvement.”

SB 5061 takes a big first step to strengthen our state’s benefits while helping small businesses avoid huge premium increases, Keiser said.

“We have learned from the experience of the pandemic,” she said. “With these bills, we plan not just to do better next time but to do better now.”

The bill now goes to the House for consideration.


Talk to us

Please share your story tips by emailing editor@rentonreporter.com.

To share your opinion for publication, submit a letter through our website https://www.rentonreporter.com/submit-letter/. Include your name, address and daytime phone number. (We’ll only publish your name and hometown.) Please keep letters to 300 words or less.

More in Business

A heatmap showing the inclusivity of each state, which is based on the total Business Climate Score. The green states are the most inclusive, while the red are least inclusive; yellow and orange fall in the middle. Courtesy of Out Leadership.
Washington ranks 13th in State LGBTQ+ Business Climate Index

Washington’s lowest score was 13 out of 20 points in the Work Environment and Employment section.

Garlic Naan, Paneer Kebab, Biryani Chicken and Bhindi Masala from Rice-N-Curry (Photo by Cameron Sheppard/Sound Publishing)
Downtown Renton’s Rice-N-Curry serves comforting Indian dishes made with care

Owner Gurminder Kaur said she learned the recipes from her mother.

Robert Toomey, CFA/CFP, is Vice President of Research for S. R. Schill & Associates on Mercer Island.
News of market volatility has felt like a pinball machine lately | Guest column

Webster’s dictionary defines the word volatility as “characterized by or subject to… Continue reading

tsr
Dick’s Drive-In to open new location in Federal Way

This will be Dick’s ninth burger restaurant; plans to open in 2023.

Kinwell clinic lobby in Renton (Courtesy of Kinwell Medical Group)
Kinwell Medical Group opens new clinic at The Landing in Renton

Kinwell clinics offer in-person and telehealth visits, online appointment scheduling, and they tout reduced wait times.

A chicken sandwich from Yummy Meats Deli (Photo by Cameron Sheppard/Sound Publishing)
Here’s a Szechuan-style take on Nashville hot fried chicken

Why a literal hole-in-the-wall chicken joint is worth the trip to Renton.

Robert Toomey, CFA/CFP, is Vice President of Research for S. R. Schill & Associates on Mercer Island.
Volatility and disciplined planning in 2022’s stock market | Guest column

The stock market in January experienced significantly increased volatility. In the first… Continue reading

Menchie’s location in Federal Way. (Photo by Cameron Sheppard/Sound Publishing)
Investigation: Menchie’s locations failed to pay workers, stole tips

Multiple King County locations involved, including Federal Way, Bellevue and two Renton shops.

Snoqualmie Casino. Courtesy photo
Kirkland-based company sues to challenge ‘tribal gaming monopoly’ in Washington

Company called the state’s policy an “erroneous application of the Indian Gaming Regulatory Act.”

Robert Toomey, CFA/CFP, is Vice President of Research for S. R. Schill & Associates on Mercer Island.
The forces behind our current COVID-induced inflation | Guest column

Recent inflation numbers have been quite high and at levels not seen… Continue reading

Robert Toomey, CFA/CFP, is Vice President of Research for S. R. Schill & Associates on Mercer Island.
The ‘year end’ elements of financial planning | Guest column

With the end of the year fast approaching, we remind clients that… Continue reading