On February 11, 2011, Governor Gregoire signed into law legislation to reduce the 2011 unemployment tax rates for Washington employers. Engrossed House Bill 1091 retroactively lowers the rates for approximately 90% of Washington employers by reducing the method in which the adjustment factors are calculated for the first 34 of the 40 rate classes.
Based on the projected revised 2011 tax rate tables of HB1091 (attached), employers currently assigned the lowest unemployment tax rates can expect to see an a significant reduction (i.e. from 1.33% to 0.49%); whereas employers assigned the highest tax rate (6.00%) can expect to see no change. The attached table shows the current 2011 total unemployment tax rates and the proposed changes under the current law (minus the 0.03% employment administrative fund). For budgetary purposes, you can use this table to estimate your revised 2011 tax rate.
Currently the Washington Employment Security Department is in the process of recalculating each employer’s assigned 2011 unemployment tax rate. To date the flat social cost factor and the tax rate array have not been finalized by the Department. However, the Department anticipates that the calculations will be completed by the end of February and that revised 2011 unemployment tax rates will be mailed to employers during the first week of March. As a result, employers should receive the revised notice prior to the April 30, 2011 deadline for filing their first quarter 2011 reports.
In addition to the changes made to the 2011 tax rate calculation, House Bill 1091 provides for (1) the continuation of weekly benefits for claimants who have exhausted their unemployment benefits and are in a state-approved training program, and (2) an increase of $25 to a claimant’s weekly benefit amount. These changes have been enacted to meet the August 2011 deadline for compliance with the American Recovery and Reinvestment Act of 2009 and allow Washington to take advantage of $98 million in federally funded modernization incentive payments.
If there are any questions, please feel free to contact Eric Rigney at (615) 242-8246.
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