Labor & Commerce

Recent steps toward ensuring fairness, prosperity and safety in Washington’s workplaces:

Reforms to Unemployment Insurance programs:

2006: The legislature changed benefit calculations to 2-quarter averaging and retention of 4-quarter averaging for tax charging (“pay at 2, charge at 4”) permanent. It also made change in weekly benefit calculation multiplier to 3.85% permanent and capped tax rates for selected industries at 5.7% beginning in 2008. The legislation reduced social cost factor rate reduction calculation (under which rate is reduced depending on trust fund balance) and changed solvency tax trigger provision.

Estimated impact: ESD estimated these changes would reduce taxes by $444 million from 2007 through 2014.

2009: Legislation passed that moved the state back to 2-quarter averaging for employer benefit charges (“pay at 2, charge at 2”). It also reduced experience tax charges for rate classes 2-39 and reduced the flat social cost factor floor depending on the months of benefits in the Trust Fund, as well as modified the eligibility period for extended benefits for individuals eligible for EUC.

Estimated impact: ESD estimated these changes would reduce taxes by $385 million from 2010 through 2015.

2011: Legislation reduced unemployment tax rates beginning in 2011.  Enacted legislation also allowed long-term jobless workers to collect federally funded “extended benefits” through end of 2011 and qualified state for $98 million in federal funds by improving access to Training Benefits Program for dislocated workers, and made two additional changes affecting all participants.

Estimated impact: ESD estimates a total savings for employers of about $360 million from 2011 through 2017. The legislation also increased unemployment benefits by $25 a week for new claims opened during the March 6-Nov. 5, 2011, time period.

2012 UI tax rates: The flat social tax rate is 42% lower than it would have been under 2006 law. Employers in all rate classes would be paying higher total taxes under 2006 law. The differences are most significant in the lower rate classes, such as 70% for rate class 1 and 58% for rate class 2.

Reforms to Workers Compensation Programs: In 2011, reforms were made to the Workers' Compensation System to lower costs and reduce incidents of long-term disability.

Estimated cost savings: $1.1 billion over the next four years. The reforms also resulted in no average rate increase for employers paying into the workers' compensation system.

Improving workers’ rights and creating efficiencies in government: In 2002 the legislature passed the Civil Service Reform Act, which gave state employees the right to bargain over wages and health care benefits. This reform also included the ability of the state to contract out for services and has allowed the state to contract out some functions to the private sector.