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Washington state's unemployment fund: Bad news but a silver lining, too

About the Author
Elizabeth New
Director of Worker Rights Policy and Health Care Policy

The last time I asked how many striking workers in the state were collecting unemployment insurance benefits while choosing not to work, the Employment Security Department (ESD) told me that, as of Oct. 18, it had paid 180 claimants for a combined 820 weeks in 2026, totaling $610,217.

That is more than $600,000 from an employer-funded safety net that should be reserved for workers who lose work through no fault of their own. The fund now serves two purposes: unemployment insurance and strike support. 

Workers generally cannot collect unemployment benefits simply because they choose not to work, and choosing not to work as part of a strike should not receive special treatment. Yet it does, since Democratic lawmakers decided to do unions a favor by requiring employers to finance unemployment benefits for workers striking against them. 

Lawmakers should have said “no” to that request and told organized labor to use its dues revenue to support the workers it urges to strike. Helping workers through a strike should definitely take priority over massive funding of ballot measures and candidates.

When the law was being debated, there was also concern about the trust fund falling low enough this year to trigger a solvency surcharge on employers. I recently asked ESD whether that surcharge was likely. The department told me the trust fund balance was approximately $3.7 billion. “Based on this fund balance, the solvency tax will not trigger for 2027 for the Unemployment Insurance program. We will be providing a comprehensive update at our next UIAC meeting in December,” ESD told me.

That is welcome news for Washington state’s employers — for now. 

“Early projections have both 2028 and 2029 as very close. It’s likely the solvency tax will trigger for at least one of those years, but could trigger for both,” the department representative added.

Those projections do not establish that strike benefits will cause a surcharge. They do, however, raise a reasonable question: Why add another use for a fund whose future solvency is already uncertain?

ESD’s first annual report on the impact of strikes on the trust fund is due to the Legislature by Dec. 31. Lawmakers should use that report to reconsider this union favor and restore the fund’s focus on workers who lose work through no fault of their own. 

One safeguard Washington Policy Center pursued is already in law: ESD must notify striking workers applying for unemployment benefits about potential repayment obligations if they later receive retroactive wages for the same weeks. I hope that warning is helping workers avoid unexpected debt, and I hope it is better protecting both the fund and the employers that finance it.

Workers need employers, and legislators should stop giving businesses more reasons to leave the state and fewer reasons to hire here. Minimum-wage mandates and a long list of taxes, including unemployment insurance taxes, add to the cost of employing people.

Lawmakers should prioritize unemployed workers in a state where unemployment remains above the national rate. In September, Washington’s unemployment rate was 4.8%, compared with 4.2% nationally. Those workers need a safety net. Legislators should protect it. Unions can and should fund their own strike support.

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