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Senate Bill 5061 was signed into law this morning by Governor Inslee.
The bill provides immediate relief to businesses that faced unemployment premium increases of up to 700% caused by the mismanagement of the unemployment trust fund and pandemic cost of unemployment benefits.
The bill, however, does not address long-term structural changes that are needed to the UI trust fund.
As Washington Policy Center has recommended previously, there are several additional reforms that are needed.
- The Employment Security Department (ESD) should adopt new streamlined, properly authenticated systems to enable claims to be made efficiently, automatically, and securely.
- Pre-registration of employees and identity verification should be completed when employees are hired rather than when they are laid off.
- Lawmakers should legalize individual unemployment accounts to improve fund stability.
- Personal accounts should be used to provide workers with an added financial asset, encourage saving for retirement, and would relieve the state of most of the administrative cost, complication, and fraud of the current system.
Senate Bill 5061 is a step in the right direction, but it does not go far enough with reforms and the increase in benefit payments will create a long-term funding issue. The cap on the unemployment tax rates is, however, desperately needed. For some employers the cap will make the difference between staying in business or not.
Washington Policy Center’s full ESD/UI reform recommendations can be read here.
