On Feb. 8, Gov. Jay Inslee signed into law Senate Bill 5061, which provides $1.73 billion in relief for businesses through the unemployment system. Your Washington Hospitality Association’s State Government Affairs team worked relentlessly since the session began on Jan. 11 to pass this bill. Businesses will receive new unemployment insurance rate notices before the first payment is due at the end of April.

“The hospitality industry has been hit the hardest by this pandemic, and on behalf of the hundreds of thousands of employees and thousands of businesses that have been impacted, we are grateful this is the first bill this session the legislature and the governor have taken action on,” said Washington Hospitality Association President and CEO Anthony Anton. “Historic relief is on the way for workers and businesses, and SB 5061 sets the groundwork for additional relief efforts underway.”

Here are some highlights of Senate Bill 5061:

  • Non-charges benefits for all employers during the stay-home order, March 22–May 30, 2020
    • 2021 rates are based on a 4-year, look-back period that ends June 30, 2020.
  • No solvency surcharge until 2025 (0.2% savings)
  • Caps the social tax rate
    • Drops the rate from 1.22% to .5%
    • The legislation will then cap social tax rates at 0.75% in 2022, 0.8% in 2023, 0.85% in 2024 and 0.9% in 2025.
  • Changes to the voluntary contribution plan
    • Currently there is a program within unemployment insurance that allows an employer to “buy off” their experience rate charges at one time rather than incorporate the charges into their rates for 4 years. To be eligible, a business has to jump at least 12 rate classes and there are a few other restrictions and surcharges.
      • The bill will lower the number of increased rate classes for a business to be eligible to “buy down” its own rates.
      • These changes are important because lawmakers could appropriate state or federal dollars to “buy down” rates, rather than having impacted businesses buy them down.
  • Increases the minimum weekly benefit for claimants
    • The current minimum weekly benefit is $201, which is a calculation of the average weekly wage.
      • The bill will increase the minimum benefit to 20% of the average weekly wage, or $270.
      • An amendment was added to cap the benefit payment so that claimants cannot receive more from state unemployment benefits than they did from their average wages.
  • Taxable wage base study
    • The Employment Security Department will study the impact and equity of increasing the taxable wage base and report back to the legislature at a later date.

Additional relief efforts are still underway and will be developed and worked on for the remainder of the regular legislative session. SB 5061 will provide the emergency relief hospitality businesses need in advance of the first quarterly payment while your team works to secure more relief for the industry.