December 2, 2011 in Business

‘Good news’ for business, Gregoire says

Unemployment taxes will drop in 2012
By The Spokesman-Review
 

Gregoire
(Full-size photo)

OLYMPIA – Most Washington businesses will see lower unemployment taxes and many will have no increase in their workers’ compensation rates in 2012.

In announcing the new rates for next year, Gov. Chris Gregoire said they represent “real reform” accomplished with bipartisan work in the Legislature earlier this year.

“This is good news at a time when our employers are desperate for good news,” she said.

Under the unemployment insurance and workers’ comp rates announced Thursday:

• Across the state 88 percent of businesses will pay lower unemployment tax rates, including some companies that have laid off workers in the last four years. About 11 percent will pay higher rates because of the level of benefits paid to former employees.

• Unemployment taxes will drop in all 40 rate classes. The rate 1 class, which covers some of the state’s smallest businesses, will drop by 71 percent. The total amount of unemployment taxes that will be collected by the state in 2012 will drop an estimated $200 million.

• There will be no general rate increase for workers’ compensation, for the first time since 2007. Some individual employers will see their rates go up, depending on their claims history or their industry. Of the state’s 317 risk classes for jobs and industries, 171 classes will go up and 146 will go down or stay the same.

State officials said this year’s reform of the workers’ comp system would save about $1.1 billion over four years.

Sen. Janea Holmquist Newbry, R-Moses Lake, who helped push the reforms through the Legislature, called the rates “great news for our workers, employers and those looking for jobs.”

The Association of Washington Business, which functions as the state’s chamber of commerce, called it a “welcome surprise for employers.”

But the Washington office of the National Federation of Independent Business said the announcement rated only a “half clap.” Workers’ compensation insurance is still too expensive, NFIB State Director Patrick Connor said, and injured workers stay off the job longer than in most other states. The NFIB has for years pushed for an end to the state system that all but the largest employers are required to use, but those efforts have lost both in the Legislature and at the ballot box.


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