In an effort to provide relief to employers as unemployment tax rates increase from 2021 to 2022, the Washington State Legislature has passed Senate Bill 5873 2021-22 and the bill was signed into law on March 11, 2022 by Governor Jay Inslee.
Unemployment tax rates had increased from 2021 to 2022 due to a decrease in the solvency of the state’s unemployment trust fund. When the trust fund decreases, triggers in Washington Employment Security Law increase tax rates to replenish the fund accordingly. In 2022, the social cost factor was set to increase to 0.75, up from 0.50 in 2021, which would have resulted in higher tax rates for most experience-rated employers.
SB 5873 retroactively decreases the social cost factor back to 2021 levels (0.50) effective January 1, 2022, and as a result, most tax rates are expected to be lower once the Department completes is recalculations.
According to our contacts at the Department, revised tax rate notices reflecting the lower rates are to be mailed out on March 31, 2022. Should these revised notices not arrive in time to adjust your contribution rate for first quarter 2022, we would advise that you pay at your originally assigned rate. The Department has indicated that should this action generate an overpayment on the employer’s account, you will have an opportunity to either use that overpayment toward future tax liabilities or request a refund once the credit amount is established.
As always, we will continue to monitor this situation and provide updates as they become available. If there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.
