Well, Washington DC is a bit more than a territory, though it isn’t quite a state. But as we have seen in past discussions about the District of Columbia, this Washington still has its own department of labor and its own rules and regulations for employers—such as the labor laws on workers’ comp that we discussed a few weeks back.
As with workers’ comp, the capital also has its own system set up for employers for unemployment insurance. Again, as we have seen elsewhere in the states of the Union, in the District of Columbia this system is contingent upon the cooperation of employers like you. That includes paying quarterly taxes based on the wages you are paying your current employees, how many former employees that you have on unemployment benefits, and how well you cooperate with the system.
The system also works smoothly when employers can provide all of the timely and accurate employee information that the government authorities need. For instance, were you former employees truly laid off or did you fire them for disciplinary reasons? Can you prove it? How much is each of your employees earning this quarter? For how many hours worked?
Provide all of this info to the Washington DC unemployment system, and your former employees will receive the proper benefits that they are due. This includes weekly paychecks for as much as 50 percent of what they were earning with you at work, for as many as 26 weeks or longer.
As a whole, what you ensure your former employees is a safety net while they look for new work, or while they wait for an economic upturn for you so that you could hire them back sometime down the road. And what you ensure is a stronger community to help your business in the present and future.
I’m not going to stop on this thread just yet. I have a whole other blog entry here to try to convince you of the power of organization, of forms, of files, and of keeping on it from the time you become an employer to the time that you become a 1000-person company to the time that you become a global multinational corporation operating multiple 1000-person facilities. OK, maybe I am getting a little carried away here.
But imagine this scenario: you are a new employer in the state of Washington. In Washington, way out on the West Coast, you are required as soon as you become a new employer to complete and send in a master application to the unemployment insurance system out there. Once you get this master application in to the state, they give you a Unified Business Identifier Number, or UBI Number. They also open you an account with the Washington Department of Labor and Industries and Revenue, as well as an account with the division of Employment Security, which is directly responsible for the state’s unemployment insurance system.
This is even the case if you owned your own business before, but only now just took on employees. In that case, you also would have to file a master application, a new one if you already have filed on, indicating that you now have employees and could be liable to pay unemployment insurance taxes for those employees. The only difference with this process is that you have to provide the state officials with your Unified Business Identifier Number that you first were given when you began your company.
What is my point here? Imagine if, as soon as you became an employer, you established a system to keep track of your first employee, and all future employees. This info system, complete with personnel files, human resource forms, and training materials, would not be filled to the brim with employee files just yet. But the system would be in place and ready to take on each and every employee that you hired down the road. How easy would that make your life when it comes to reporting on their wages and employment status to Washington state every quarter?
Recent media coverage and concern from citizens has sparked an interest in how theatre and entertainment industry personnel should be reported for Unemployment Insurance Tax purposes. Under current laws, most individuals working in the theater and entertainment industry are considered employees and their wages should be reported to the Employment Security Department (ESD). Additionally, the workplace should also post Washington Unemployment Insurance posters.
However, there are exceptions. In considering whether taxes should be paid on an individual’s wages, the department applies an Employment Exception Test. This test helps us decide whether the individual is an employee, a volunteer, or an independent
The following questions help determine if the individual you pay is an independent contractor.
1. Are you hiring someone for more than personal labor?
This is someone who brings his or her own employees to perform the work and you are not supervising them, or brings more than “ordinary hand tools” to the job and you are not supervising the work. Examples include props, costumes, instruments, etc.
If you answered “Yes” to one of the two scenarios above, then unemployment insurance tax is NOT due. If “No,” see question #2.
2. Are you supervising the individual’s work?
Are you only scheduling and inspecting the work? If you answered “Yes” to this question then you are considered “not supervising” and unemployment insurance tax is NOT due.
Are you telling your worker or a subcontractor’s workers how to do the job, assigning tasks, training, keeping time sheets, paying a wage, or setting regular hours? If you answered “Yes” to this question, then you are supervising and required to pay unemployment insurance tax. Whenever you are required to pay UI, then you are also required to post Washington Unemployment Insurance posters.
If “No,” see question #3.
3. Do workers have an established business of their own?
Supervision: Do they perform the work free of your direction and control?
Business office: Do they maintain and pay for a place of business that is separate from yours?
Previously established business: Do they have an established, independent business that existed before they worked at your business? Evidence may include other customers or advertising.
State and Federal taxes: When you entered into the work arrangement, were they responsible for filing Federal taxes or other taxes to appropriate state agencies?
Required registrations: Do they have all required registrations, such as a UBI number or a contractor registration number?
Maintains books: Do they maintain a set of books dedicated to the expenses and earnings of the business?
If you answered “Yes” to ALL SIX bullets above, then unemployment tax is NOT due.
If an employee has lost his or her job in Washington, the general steps for gaining unemployment insurance benefits are very similar to every other state. First, the employee must have first been employed with an organization and have been receiving a base amount of pay for a base period of time.
I have found that no state allows an employee to collect unemployment insurance benefits without having first been employed. Thus, if you are hired for a job, you must first report to the job before you can begin collecting the benefits if you become unemployed.
Next, the employee must be unemployed through no fault of his or her own. The employee cannot quit or perform their duty in a way which would warrant due firing. The employee must be laid off or the organization for which he or she works must close down.
The employee must continue to file claims once he or she is accepted to receive unemployment insurance benefits. The claims must be filed on a weekly basis and the employee must report an job earnings or job offers. In the event that a job is offered, the employee will likely not be able to turn it down and continue to receive the benefits of unemployment.
If an employee is receiving unemployment benefits, but is offered a part time job, the employee may accept the part time job and still receive partial unemployment benefits. The amount of earnings will be deducted from the maximum amount of money that the unemployed person could earn if he or she continued to only collect unemployment.
One major misconception with unemployment insurance is that the workers pay for it with their income tax and social security. In actuality, the employers are the people paying for the unemployment insurance. Employers will pay based on the amount of hours that the former employee claims, thus the majority of employers have unemployment insurance to cover the cost of the unemployed worker.