Tag Archives: Employment Security Department

Schoesler files bill to protect workers from new payroll tax

More than a month before the start of the 2022 legislative session, 9th District Sen. Mark Schoesler has filed a bill that would look into private-market alternatives to the state’s new long-term care program, supported by an unpopular payroll tax set to go into effect Jan. 1.

Schoesler’s proposal, Senate Bill 5503, would authorize a joint legislative committee to study the financial products available through the private market to replace the long-term services and supports trust program.

“It’s easy to see why this new long-term care tax is so unpopular,” said Schoesler, R-Ritzville. “First of all, many workers won’t be able to afford it – people earning an average wage will lose hundreds from their paychecks each year. Too many people would pay the tax yet never receive benefits. Some can’t take advantage of the one-time opt-out from the program this year. People who live in other states but work in Washington would have to pay this payroll tax without being eligible for benefits. Finally, this long-term care plan isn’t portable, so if you move out of Washington, you receive zero benefit, even if you’ve paid the tax for years and years. Talk about unfair!

“Who trusts state government – especially the state Employment Security Department – to manage a program like this effectively? It’s time for the Legislature to create a joint committee to examine private-market alternatives to this program and look for a better way to provide long-term care in Washington,” added Schoesler.

The WA Cares Fund, passed in 2019 by the Legislature and signed by Gov. Jay Inslee, creates a 0.58% payroll deduction on employees, set to begin Jan. 1. If someone earns $50,000 a year, they will pay $290 a year for this tax until they quit, retire or leave the state. Starting in 2025, eligible beneficiaries could then start claiming up to a lifetime maximum of $36,500 to help pay for home care, meal delivery, assisted living or other needs.

As of Dec. 1, about 430,000 people had requested an exemption from both the new long-term care program, known as WA Cares Fund, and the payroll tax to fund it.

Schoesler’s bill will be assigned to a Senate committee when the Legislature convenes Jan. 10. His measure is one of several bills, already prefiled, that focus on the long-term care program and the payroll tax funding it.

The 2022 legislative session is scheduled to last 60 days.

Schoesler bill would help stabilize UI rates for employers amid call for rate hike

Following yesterday’s announcement by the state Employment Security Department that it will raise both minimum and maximum weekly unemployment benefits for jobless workers, 9th District Sen. Mark Schoesler pointed out that legislation he introduced would provide relief and help stabilize unemployment-insurance rates for Washington employers who pay UI taxes.

Schoesler’s proposal, Senate Bill 5197, would offer relief by adjusting the calculation used to determine UI taxes. Much like a tuition cap gives certainty to families and students about the costs of higher education, his bill would create a cap on the maximum UI wages subject to tax to provide welcome stability for employers when it comes to this particular cost of doing business. It was introduced during the 2021 legislative session and received a public hearing in the Senate Labor, Commerce and Tribal Affairs Committee but was not passed by the committee.

“Employers in Washington will be forced to pay more in unemployment-insurance taxes for reasons that aren’t their fault,” said Schoesler, R-Ritzville. “My bill is eligible for consideration again during the next legislative session. It would at least provide some needed stability at a time when employers really need it.

“One of my concerns about ESD’s proposed increase in unemployment benefits is that it will cause jobless workers to have less incentive to search for a new job and rejoin the workforce. There are certain sectors of our economy, especially restaurants and retail, that really need more workers. We need to get our unemployed back to work, not make it easier for them to stay unemployed when more workers are needed,” added Schoesler, a member of the Labor, Commerce and Tribal Affairs Committee.

The Employment Security Department yesterday announced that Washington’s average annual wage grew by 10.1 percent in 2020 to $76,741. According to ESD, the average annual wage is used to calculate unemployment benefits for jobless workers and Paid Family and Medical Leave benefits. The minimum weekly unemployment benefit, calculated at 20 percent of the average weekly wage, will increase by $94 to $295, for new claims opened on or after July 4. At the same time, the maximum weekly benefit, which is the greater of $496 or 63 percent of the average weekly wage, will increase by $85 to $929.

Schoesler, who owns and operates a wheat farm near Ritzville, says the past 15 months have been especially difficult and unusual for most Washington employers.

“Soon after COVID-19 reached Washington, our state government forced many businesses to close, driving up the number of unemployment claims and draining the fund that pays those claims. Many businesses in our state are still struggling, and the last thing they need right now is a sharp increase in paying UI taxes. My bill would provide needed relief and stability.”

Schoesler introduces bill to provide relief for employers on UI taxes

Sen. Mark Schoesler has introduced a bill that seeks to provide relief for Washington employers who are facing the possibility of paying higher unemployment-insurance taxes as they also struggle with the effects of the COVID-19 economic shutdown.

Senate Bill 5197 would adjust the calculation used to determine UI taxes. Much like a tuition cap gives certainty to families and students about the costs of higher education, Schoesler’s bill would create a cap on UI taxes to provide welcome stability for employers when it comes to this particular cost of doing business.

“The state’s unemployment insurance fund shrank significantly over the past year for a couple of reasons,” said Schoesler, R-Ritzville. “The economic shutdown caused by COVID caused workers in our state to file a shockingly high number of unemployment claims – and then hundreds of millions of dollars were lost by our state Employment Security Department to foreign fraudsters. Now employers in Washington could be forced to pay more in unemployment insurance taxes, for reasons that aren’t their fault. My bill would at least provide some needed stability at a time when our job providers really need it.”

Schoesler, who owns and operates a wheat farm near Ritzville, says the past year has been especially difficult and unusual for most Washington employers.

“First the government forces so many of them to close, driving up the number of unemployment claims and draining the fund that pays those claims; then the government wants more tax to refill the fund! A local chamber member, who was forced to lay off people during the initial lockdown but hired them all back as soon as possible, told me their UI rate went from about .4% to nearly 4%. That’s as unfair as it gets.”

Schoesler said his bill is different than Gov. Jay Inslee’s requested legislation, SB 5061, which would reduce the financial pain for employers facing bigger UI taxes by spreading the increase out over a longer period.

“One thing that I don’t like about the governor’s proposal is that it also would increase UI benefits in conjunction with the tax hike and extend eligibility beyond layoffs to what are called ‘voluntary quits.’ That’s hardly a satisfactory solution, in my opinion,” said Schoesler.

The 9th District legislator is a co-sponsor of SB 5171, which would take $1 billion from the state’s rainy-day fund to help “backfill” the unemployment insurance money that had to be paid out so unexpectedly.

“Our state’s rainy-day fund was created so it can be used for real emergencies. It’s an appropriate source for this needed relief, and could make the difference between survival and failure for employers who are still hanging on,” said Schoesler.

SB 5197 has been referred to the Senate Labor, Commerce and Tribal Affairs Committee. SB 5171 has been sent to the Senate Ways and Means Committee. No public hearing has been scheduled for either proposal.