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July 21, 2020
2020-1853

Washington employers have a time-sensitive opportunity to apply for relief of some of their COVID-19 UI benefit charges

Washington legislation under HB 2965 provides $25 million in emergency funds for the state's COVID-19 unemployment account to be used for relieving employer accounts of charges related to COVID-19 unemployment insurance (UI) benefits (termed "offsets").

Under guidance issued by the Washington Employment Security Department, employers that make state unemployment insurance (SUI) contributions can apply to have some of their COVID-19 UI benefits offset from the state's COVID-19 unemployment account rather than having the benefits impact their experience rating (potentially resulting in a higher SUI tax rate in 2021).

The application, once available will posted to the Department's website.

Eligible employers

Employers are eligible to apply for the UI benefit offset if the Department paid UI benefits in the first two quarters of 2020 to employees who:

  • Were temporarily laid off as a direct or indirect consequence of COVID-19

AND

  • Returned to work for the employer after the layoff

How the offset program works

Application for the UI benefit offset is voluntary.

Once available, employers will provide within the application a list of employees meeting the two requirements above. The Department notes that employers should not include in the employee list those receiving UI benefits through the state's SharedWork program because benefits paid under that program are not charged to employers.

The offset applies only to COVID-19 UI benefits paid in the 2020 first quarter after February 29, 2020, and to all COVID-19 UI benefits paid in the 2020 second quarter.

The Department will determine the amount of the employer's offset by using a formula based on the number of approved applications, the total amount of eligible benefit charges on all approved applications, and the $25 million available.

Employers will be notified if the application is denied. There is no appeal process in the event of a denial.

How to apply

The Department will post an application online or employers can request a paper copy. The Department has not yet completed the application, but it will post a link and instructions to its website. All employers that pay SUI contributions will be sent a notice once the application is available.

The application must be submitted online or postmarked no later than September 30, 2020.

Documents needed for the application process include:

  • The employer's first and second quarter Statement of Benefit Charges
  • Any documents that show the employer re-employed staff who were laid off due to COVID-19
  • First and second quarter payroll documents

Employers are not required to submit the documentation above with their application; however, the Department may request it later. Employers are responsible for maintaining the required documents in their records.

Ernst & Young LLP insights

Given that the offset program has limited funds, the filing of applications for relief of COVID-19 UI benefit charges is time sensitive. Employers should act quickly to gather the requirement documents and to file their applications well before the September 30, 2020, deadline.

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)
   • Kristie Lowery (kristie.lowery@ey.com)
   • Peter Berard (peter.berard@ey.com)

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