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Labor advocates are concerned with SB 5061 in its current form

There is concern among labor advocates that SB 5061 — a bill that would provide unemployment insurance tax relief for businesses and increase the minimum weekly unemployment benefit for workers — could leave some workers worse off than before.

These concerns were aggravated after the bill was amended before passing in executive session. The amendment, sponsored by Sen. Curtis King (R – Yakima), limits an individual’s weekly benefit amount for unemployment compensation to the individual’s weekly wage using an annualized calculation. In other words, the amendment will prevent individuals from earning more through unemployment compensation than they did while working.

We believe SB 5061 in its present form is wildly insufficient — and that the amendment passed by the Senate committee Monday to establish a subminimum weekly benefit for the lowest-paid workers just made things worse,” said Sage Wilson, a spokesperson for Working Washington.

The “subminimum benefit” mentioned by Wilson would apply to workers who struggle to get enough hours. For example, minimum wage workers who average less than 14.6 hours per week currently receive a minimum benefit of $201 per week. Under King’s amendment, these workers will get a lower minimum than under current law.

Based on this issue and others, labor advocates say not enough information had been provided regarding the bill’s implementation and impact before the amendment passed.

One of my concerns about the amendment is that there had been no analysis of the impact that had been made available to the committee,” said Joe Kendo, Government Affairs Director for the Washington State Labor Council. “I think that also applies to the question of implementation of an effective ‘minimum cap’ that would be different for each applicant. How does it get operationalized? Would it delay benefits? We do not oppose the bill as amended, but I think we will need to look at what the impacts are and make adjustments if a balance doesn’t pan out in the analysis.”

Kendo did not lay blame on anyone’s feet for the dearth of information, saying that that the logistics of the session are making coordination more difficult.

The amendment passed 8 – 1, with Sen. Derek Stanford (D – Bothell) being the only no vote. A spokesperson for the bill’s prime sponsor, Sen. Karen Keiser (D- Des Moines), says that she is still working on the substance of the bill and is not yet ready to comment. Other Democrats on the committee did not respond to requests for comment.

There is also concern that the significant subset of impacted workers with mixed income sources — micro-business owners, gig workers and other contractors — would only get unemployment insurance (UI) based on their wage income. With the UI calculation only based on wage income, the amendment could complicate the disbursement of benefits to low-wage workers.

When considering changes to UI calculation mechanisms, policy makers have to consider what steps are necessary to implement, whether that requires IT updates (and associated costs), and whether those additional calculations might result in benefit delays … At some point you have to ask if the complexity of a proposal is worth the impact. By capping the minimum benefit at employment level wages for some presumably small number of applications, is the Legislature causing harm on the back end by unduly delaying or cutting benefits for some number of low-wage applicants?” asked Kendo.

Workers generally cannot collect UI if they quit their job, causing labor advocates to wonder why is it necessary to cap the minimum benefit. It would seem that current limits on collecting the benefit would eliminate the incentive to quit in order to earn more through UI.

Nobody is going to leave the stability of having a job – especially in this environment – for the prospect of time-limited benefits that might be slightly more than what they made while working,” Kendo continued. “We’re really only talking about extremely low-wage, part-time workers here. We run the risk of causing harm for some sub-set of unemployment applicants that may outweigh whatever cost containment the amendment is attempting to achieve.”

Wilson, of Working Washington, says another bill from Sen. Rebecca Saldaña (D – Seattle) makes a useful change by establishing UI eligibility for workers who leave a job due to caregiving needs. But that bill in conjunction with the current version SB 5061 fail to address what he says is the single most important issue workers have faced: receiving benefits promptly.

Wilson pointed to recent Employment Security Department (ESD) data showing 40,000 applicants waiting for a response to claims, with an average wait times of two weeks for simple claims and ten weeks for more complex claims.

In addition to delays, Wilson says SB 5061 should address “aggressive overpayment collections” and “unfair denials”:

While the current bill provides businesses various forms of tax holiday which they want to extend, it fails to place a parallel moratorium on ‘overpayment notices’ sent to workers. That means ESD could continue to take back benefits from people — during this pandemic, when they have no income — even in those cases where the initial erroneous payment was made by the department through no fault of the claimant.

Working Washington is calling for a set of amendments to address these issues.

Workers across the state are really looking to see the state treat workers’ need for relief with the same urgency they’re treating employer tax rates,” said Wilson. “And in the end this is a public health issue too: people need reliable income when they lose work in order to stay home & stay safe. The unemployment system is failing right now to do that job, and the Legislature needs to do something about it.”

SB 5061 is one component of the Democrats’ $2.2 billion COVID-19 relief package. The bill is currently sitting in the Rules committee.

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