Landmark agreement announced on unemployment insurance bill

OLYMPIA – A breakthrough was achieved today as Democratic and Republican leaders in the Senate and House of Representatives announced agreement on Senate Bill 6885 to make permanent changes in the way in which unemployment insurance benefits are calculated.

The House is expected to pass the measure this evening with changes agreed to by the Senate. The bill would then return to the Senate for concurrence before being sent to the governor for her signature.

Bill sponsor and chair of the Senate Labor, Commerce, Research & Development Committee, Sen. Jeanne Kohl-Welles, D-Seattle, praised her colleagues for their exceptional dedication to crafting a workable solution to a complex issue.

“We’ve spent countless hours individually with stakeholder groups and then collectively to strike a balance among so many interests and needs,” Kohl-Welles said. “None of us wanted to have to keep revisiting this issue year after year. We wanted an agreement that could work — for our working people and for our employer community. I’m appreciative of the hard work of this group in developing a bill that we can all live with. This is one of the crowning achievements of the session.”

“This is an historic and balanced compromise on unemployment insurance,” said Rep. Steve Conway, D-Tacoma, chair of the House Commerce and Labor Committee. “In 2003, legislation was passed over labor’s objections. In ’05, business interests weren’t pleased with the end result. Today we have a bill that protects claimants as well as reduces taxes for business, and ensures a well-funded trust fund for the future.”

“All throughout these negotiations I’ve said that we needed to come to a compromise that takes us to a fair and equitable system,” said Sen. Linda Evans Parlette, R-Wenatchee, ranking Republican on the Senate Labor, Commerce, Research & Development Committee. “With leadership from legislators on both sides of the aisle, today we took a good first step to accomplishing that. I’m so pleased to see that all the hard work my colleagues and I dedicated to the Unemployment Insurance Task Force has culminated in this working compromise.”

“I’m proud of the work we did on this bill,” said Rep. Cary Condotta, R-East Wenatchee, ranking Republican on the House Commerce and Labor Committee. “All of us sat down at the table committed to come up with a workable solution. What came out of the negotiation was a rate structure that will create less subsidizing between rate classes and, most importantly, will stabilize rates for our state’s businesses. It’s a solution for all involved and a true bipartisan legislative effort.”

SB 6885 would retain the two-quarter averaging system put in place temporarily in 2005 as the basis for determining benefits. The bill’s primary features affecting benefits include:

• Two-quarter averaging, with an individual’s weekly benefit amount set at 3.85 percent of the average in the two quarters of the base year in which wages were highest, and
• Considering it good cause when a spouse’s mandatory military transfer causes relocation, regardless of the state to which the individual relocates. This provision would apply to new claims on or after July 2, 2006.

The bill makes several important changes to the way unemployment taxes are assessed to employers, including:

• Charging benefits as though the weekly benefit amount is 1 percent of wages in all four quarters of the base year, or charging at four quarters.
• Reducing social taxes when the unemployment insurance trust fund contains enough funding for 10 or more months of benefits.
• For seasonal industries such as agriculture, fishing and food processing, the maximum tax rate would be capped at 5.4 percent until January 2008, and then move to 5.7 percent.

In addition, the bill calls for the state Employment Security Department to look into the issue of repeat episodes of unemployment, enhanced job search requirements, employer turnover and the prevention of corporate fraud. Findings and recommendations would be reported to committees of the Legislature by Dec. 1, 2006.

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