Reimbursable employers

Unemployment Insurance (UI)


Important reimbursable employer billing statement updates:

 

Federal pandemic unemployment benefits expired on the week ending Sept. 4, 2021.

As a result, you might begin seeing more benefit charges on your third-quarter billing statement.

You could see on your statement:

  • Higher benefit charges.
    After Sept. 4, the federal government will no longer pay any benefit charges for former employees receiving regular unemployment benefits or SharedWork benefits. Currently, the federal government is paying 75 percent of regular benefits and 100 percent of SharedWork benefits. 

  • More former employees listed.
    As pandemic unemployment programs expire, some claimants will transfer to regular unemployment insurance benefits.

 

  

  

The unpaid waiting week is coming back.
Claimants will once again have an unpaid waiting week starting with claims filed for the week ending Sept. 11. This change won’t affect your benefit charges. 


Create an account and use EAMS

ESD’s Employer Account Management Services (EAMS) is a handy tool for keeping up with your tax account. We recommend all employers create an account in EAMS. Visit the eServices website and begin.


Due dates

Tax payments are due to the Employment Security Department (ESD) 60 days following the end of the calendar quarter. For example, quarter four ended on Dec 31, so quarterly bill payments are due on Feb 28.

 

Deferred Payment plans and Delinquent payments

If you can’t make your tax payments, ESD may be able to help. We can work with you on payment plans. Visit our website page on deferred payment contracts and learn more.

 

Quarterly statements of benefit charges

You’ll receive your benefit charging statements quarterly instead of monthly.

 

Reading a billing statement

Take a look at an example of a reimbursable employer's billing statement example and see what each seaction means. 

Choice of tax payment method

Once per year, qualified employers use this form (Choice of Tax Method Payment) for choosing unemployment insurance payments. Form must be received by ESD at least 30 days before the beginning of any taxable year.

When completed please sign and submit via one of the following methods:

Fax: 800-794-7657
email: uifiles@esd.wa.gov

Mail: Employment Security Department
Registration Unit
P.O. Box 9046
Olympia, WA 98507-9046


What are reimbursable employers?

Some nonprofit organizations, states and political subdivisions of the state, and federally recognized Indian tribes may qualify to reimburse the department for unemployment benefits actually paid to separated employees instead of paying unemployment taxes. In the Revised Code of Washington (RCW), the term is "payment in lieu of contribution"

For a nonprofit organization to qualify, they must be a section 501 (c)(3) tax-exempt organization under the federal tax code and must provide the department with a copy of its section 501 (c)(3) letter.

If a new employer chooses and qualifies for the reimbursable method, the department may require it to post a bond or security deposit. Political subdivisions and nonprofit hospitals, colleges, and universities are not required to post a bond or security deposit. For a new employer, the department will base the amount of any required bond on the projected taxable payroll for the coming year, multiplied by the industry average tax rate, with the result rounded down.

For an existing reimbursable employer, the department will base the amount of any required bond based on individual wages of each employee for the previous four complete calendar quarters, multiplied by new taxable wage amounts using the maximum taxable wage base assigned for the coming year, with the result rounded down.

If a reimbursable employer switches to the taxable method, the employer will be assigned the industry average rate until it satisfies the requirements to become a "qualified employer" under RCW 50.29.010. This does not apply to delinquent employers under WAC 192-330-110.

(information from WAC 192-300-060)


Frequently asked questions

Who are reimbursable employers?
Only employers who are exempt from Federal Unemployment Tax Act (FUTA) may choose the reimbursable method of paying for unemployment insurance. This includes governmental entities (federal, state, and local), their political subdivisions, and 501(c)(3) nonprofit agencies (religious, educational, charitable, and scientific organizations).

State, federal, and military employers must be reimbursable; while local governmental accounts, subdivisions, and 501(c)(3) nonprofit agencies may choose to be either taxable or reimbursable.

How do reimbursable employers differ from taxable employers?
Taxable employers pay a percentage of their taxable wages each quarter to the Employment Security Department as insurance for unemployment benefits. Reimbursable employers are billed for their share of benefits that were paid to former employees.

How else are reimbursable employers different?
They submit quarterly reports the same as taxable employers. However, they make no payments with their reports. Employment Security bills them quarterly if there are any benefit charges to their accounts. Payment is due 30 days after the billing date.

How does an employer switch payment method?
An account remains reimbursable until an employer asks to change to the taxable method, or the department converts the account due to delinquent payments. Any request to switch payment methods must be received by November 30 for the following year.
An employer that chooses reimbursable status must remain with that payment method for two calendar years. If the reimbursable method is chosen, ESD may require a surety bond before the request is processed. A nonprofit organization that becomes taxable must remain taxable for one year, while local government agencies and political subdivisions must remain taxable for two years.

What happens if an employer switches from reimbursable to taxable?
Upon switching from the reimbursable to taxable method, an employer gets a new account number and is treated like a new business. Wages reported are subject to Unemployment Insurance tax. No longer billed for benefits paid to former employees, the employer pays a tax rate that is based on benefits paid in previous years. These benefits determine an experience rate. If you switch from reimbursable to taxable payment method, you still have to pay for outstanding reimbursable benefit charges. In other words, you cannot avoid paying for benefits paid to your former employees while you were under the reimbursable method.

What else should I know about being a reimbursable employer?
A reimbursable employer is charged when benefits are paid to former employees, even if the last employer was different. Furthermore, a reimbursable employer is not eligible for relief of benefit charges. If Employment Security determines that it overpaid a former employee, the reimbursable employer is issued a credit when the money is recovered.

What is a reimbursable employer for the purposes of unemployment insurance?
Some nonprofit organizations, states and political subdivisions of the state, and Indian tribes may qualify as reimbursable employers which reimburse the Employment Security Department (ESD) for unemployment benefits actually paid to separated employees instead of paying unemployment taxes.

How are reimbursable employers billed for unemployment benefits paid to their employees?
Reimbursable employers are billed the quarter after unemployment benefits are paid. Accordingly, benefits paid January through March were billed to reimbursable employers in April and are due by May 31.

What can reimbursable employers do now to seek relief for unemployment benefit charges if they are unable to make a full payment to ESD?
To explore potential repayment plans, reimbursable employers who are unable to pay their bills should contact the Employment Security Department via email at ESCTAX@ESD.WA.GOV.