Wash. Lawmakers Reach Agreement on Unemployment Insurance

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Washington lawmakers have reached a bipartisan agreement on changes to unemployment benefits, a controversial issue that has divided labor and business interests for years.

Rep. Steve Conway, D-Tacoma, said it was “something of a miracle” to have before us a bipartisan resolution. “Let us vote and let us end this historic debate for a while,” he said.

Republicans and Democrats from both the House and the Senate negotiated the final deal, which was quickly passed by the House Thursday night on a 97-1 vote. It now goes to the Senate for concurrence before being sent to Gov. Chris Gregoire, who has said she would sign it.

Under the negotiated plan, seasonal workers — laborers who may only work for six months out of the year — will receive full unemployment benefits under so-called “two-quarter averaging.” But employers will only have to pay taxes under “four-quarter averaging,” meaning they’ll pay less taxes because the payment would be based on the employee’s average earnings over 12 months instead of six months.

“I think there’s something in this compromise for everyone,” said Sen. Linda Evans Parlette, R-Wenatchee. “It’s a tremendous, positive step to try and get a balance.”

The state has extra money in its unemployment insurance fund since altering tax laws three years ago, when lawmakers rushed through a reform package negotiated to persuade the Boeing Co. to build its new plane, the 787, in Washington state.

The reforms called for “four-quarter averaging” — calculating unemployment benefits as a percentage of the worker’s wages over all four quarters of the previous year. But under a measure passed last year, the state switched back to two-quarter averaging, which businesses argued created an unfair tax burden, among other problems.

Under the two-quarter approach made permanent in the bill, a nurse who made $40,000 for 12 months of work would receive the same unemployment benefits as a construction worker who made $20,000 for his or her six months of work. The formula determines a person’s benefits based on the two most productive quarters of work, which, in the case of the nurse and construction worker, would both be $20,000.

Seasonal benefits help farmers, construction workers, community college teachers and others who don’t have full-year occupations.

The bill caps unemployment tax rates for the fishing and agriculture industries until Jan. 1, 2008, at 5.4 percent; after that date, the cap moves to 5.7 percent.

“Not everybody got what they wanted. But we are here and it is amazing,” said Cary Condotta, R-East Wenatchee, who said the compromise stabilizes the system. “It’s a good agreement.”

The measure also calls for the state Employment Security Department to evaluate repeat unemployment claims, job search requirements and the prevention of corporate fraud. Findings and recommendations would be reported to committees of the Legislature by Dec. 1.

The unemployment insurance bill is Senate Bill 6885.