Most businesses will pay less in unemployment taxes

Published 12:11 pm Thursday, December 1, 2011

Businesses will pay an average of 13 percent less in unemployment taxes in 2012 and will see rates for workers compensation remain flat, state officials said Thursday.

Gov. Chris Gregoire said a tax reform bill approved earlier this year will mean the unemployment tax rate will drop by 13 percent next year and that 88 percent of businesses will pay less than they do now.

Businesses should save about $207 million, the governor said.

“The stability of our unemployment benefits fund and tax system is the envy of many other states,” said Paul Trause, employment security commissioner. “No other state has been able to reduce taxes and provide temporary benefit increases in this economy.”

Workers compensation taxes were estimated to rise this year, but will remain flat thanks to improving claim trends and the tax reform bill, Gregoire said.

While the rates remain flat, businesses could see their bills go up or down depending on their claim history.

The announcement drew praise from business groups.

“This is a welcome surprise for employers,” said Kris Tefft of the Association of Washington Business.

The state chapter of the National Federation of Independent Business offered “qualified praise”, saying small businesses would be relieved by the news but that work still needs to be done on the state’s workers’ compensation insurance, which is mandatory for employers.

“Washington has the second-highest workers’ compensation cost per employee and provides the third-highest benefit package in the country, said Patrick Connor, state director.