Businesses still pay for ESD's unemployment fiasco, just slower

Gov Inslee signed SB 5061 in early February. This bill was sped through the legislature pretty quickly, due to the outcry over 2021 unemployment insurance tax rates for businesses increasing by 500-700%, and in some cases by over 3500%, due to the heavy damage to the UI Fund from the state's forced business shutdowns and restrictions in 2020. Click here to see our previous reporting on this topic .

SB 5061 helps a bit, putting some limits on the immediate pain felt by businesses, but is widely seen as simply kicking the problem down the road, through about 2025. It delays some automatic tax increases, also capping some of the increased tax rate calculations, and those caps are allowed to rise a bit each year through 2025.

But if you are a business owner and an employer, over the next several years you will still be paying for:

• most of the unprecedented unemployment costs due to the state-ordered business shutdowns and restrictions in response to the pandemic,
• all the $350-million plus, out of 650+ million, that was stolen by foreign criminal gangs and not recovered, due to the incompetence and negligence at the state Employment Security Department (ESD),
• all the costs and penalties associated with repaying a loan from the federal government to shore up the UI fund,
• and will be penalized with an increased UI tax rate long into the future because the state, not businesses themselves, required employers to lay off employees.

As it stands now, the only employers who will escape these greatly increased costs imposed on them, will be those businesses that move to another state that didn't force layoffs, or, those that change their business model and no longer hire employees. There's one more method of escape as well, which will be businesses that simply do not survive the potential hardships of the next few years.