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@auburn-reporter.com.

To share your opinion for publication, submit a letter through our website https://www.auburn-reporter.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

Cash Cards Unlimited partners, left: Nick Nugwynne, right: Cassius Marsh (photo credit: Cash Cards Unlimited)
Former Seahawks player Cassius Marsh cashes in on trading cards

Marsh and his friend open physical and online trading card store as collectibles boom amid pandemic.

Teaser
First large-scale, human composting facility in the world will open in Auburn

“It’s what nature meant us to do. We just do it faster.”

The 7-story apartment building Teutsch Partners LLC has been at work on for Seattle-based NW Holdings for the last two years is nearing completion at 1st Street Southeast and South Division Street. The owners are set to begin leasing apartments this spring. Robert Whale/Auburn Reporter.
7-story apartment building nears finish line

The 7-story apartment building Teutsch Partners LLC has been at work on… Continue reading

Robert Whale/Auburn Reporter
A draft ordinance proposes to apply a square-footage tax on the city’s warehousing along with a possible Business and Occupation tax to help the city stave off steep deficits.
Auburn studies first draft of proposed B&O tax

Berk Consulting Agency of Seattle studied the city of Auburn’s general fund… Continue reading

Whole Foods grocery store entrance (Shutterstock)
King County considers grocery store worker hazard pay for those in unincorporated areas

The King County Metropolitan Council will vote during its next meeting on… Continue reading

Dan Olmstead of Poverty Bay Coffee Company. Courtesy photo
Paying their fair share of taxes: Ad features Auburn business owner

An Auburn coffee roaster is one of four small business owners in… Continue reading

Screenshot
WA Democrats consider new tax on billionaires

Plan could raise $5 billion from fewer than 100 taxpayers. Detractors fear it could drive Washington’s wealthiest out of state.

Last summer, people took advantage of the outdoor dining along First Avenue between Gowe and Titus streets in downtown Kent. In Phase 2 of the governor’s reopening plan, which was announced Jan. 28, restaurants can reopen at a maximum 25% capacity and a limit of six people per table. Photo courtesy of Kent Downtown Partnership
Restaurant reprieve: State to relax some indoor restrictions

On Monday, area restaurants and certain entertainment venues may resume indoor service, the governor said.

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

The vendor was located at the Southeast corner of Military Road S. and S. Star Lake Road.
Unlicensed food vendor shut down for selling tamales from ice chest

King County Public Health shut down the Federal Way vendor on Monday, Jan. 25.

Firefighters on Tuesday donated $1,000 to Athens Pizza and Pasta to help the restaurant continue to pay its employees until it can reopen after effecting necessary repairs following the December fire. Photo courtesy city of Auburn.
Firefighters step up for Athens Pizza

Union donates $1,000 to help owners pay employees while repairing restaurant.

2021 Chevrolet Blazer. Courtesy photo
Car review: 2021 Chevrolet Blazer

By Larry Lark, contributor When it comes to certain car models they… Continue reading