Navigating Increasing Unemployment Expenses in Washington
Washington’s Employment Security Department has announced significant updates to the weekly benefit amounts and taxable wage base that will impact nonprofits across the state. These changes are essential for financial and HR planning within your organization.
Effective July 7, 2024
Maximum Weekly Benefit Amount:
- The maximum weekly benefit amount will increase to $1,079, up from the previous $1,019.
Minimum Weekly Benefit Amount:
- The minimum weekly benefit amount will increase to $342, up from $323.
Due to legislative changes (SB 5061), claimants who receive a weekly benefit amount below 20% of the average weekly wage will have their weekly benefit amount be equal to their personal average weekly wage, up to $342.
Beginning January 1, 2025
Taxable Wage Base:
- The taxable wage base will increase to $72,800, representing a 6.3% rise from $68,500 in 2024.
This substantial increase in the taxable wage base means that employers, including nonprofits, will be liable for unemployment insurance taxes on a higher amount of each employee’s earnings.
What This Means for Nonprofits
Nonprofits in Washington need to be aware of these updates and prepare accordingly. The increase in both the maximum and minimum weekly benefit amounts, coupled with the rise in the taxable wage base, may lead to higher unemployment costs.
Steps to Take
- Review and Adjust Budgets: Assess the financial impact of the increased benefit amounts and taxable wage base. Ensure your budget can accommodate these changes.
- Educate Your Team: Inform your HR and financial teams about these updates and how they will impact your organization.
- Stay Informed: Keep up with any further announcements from the Washington Employment Security Department to ensure compliance.
- Consider Unemployment Insurance Alternatives: Explore options like joining the 501(c) Agencies Trust to manage your unemployment claims and costs more effectively.
Conclusion
As Washington’s unemployment tax rates change with the increased weekly benefit amounts and taxable wage base, 501(c)(3) nonprofits must strategically explore options to manage these costs effectively. The reimbursement method offers a potential for savings and greater control over unemployment expenses. However, careful consideration of each organization’s specific financial and operational needs is crucial, ideally in consultation with a financial advisor. With thoughtful planning, Washington’s nonprofits can adeptly navigate these changes, ensuring they remain financially healthy and mission-focused.
About Us
For more than 40 years, 501(c) Services has been a leader in offering solutions for unemployment costs, claims management, and HR support to nonprofit organizations. Two of our most popular programs are the 501(c) Agencies Trust and 501(c) HR Services. We understand the importance of compliance and accuracy and are committed to providing our clients with customized plans that fit their needs.
Contact us today to see if your organization could benefit from our services.
Are you already working with us and need assistance with HR or unemployment issues? Contact us here.
The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources.
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