Today’s blog comes from our Lead Accountant, Adrienne Kaylor.
If you are an employer in Washington state, it’s important to make sure you are reporting wages for unemployment taxes correctly to the Employment Security Department. Reporting requirements are as follows:
Salaried or Commissioned Employees – Report actual hours worked. If hours are not tracked, report 40 hours per week for full-time employees.
Overtime – Report actual hours worked.
Vacation pay – Report the number of hours for leave with pay.
Payment in kind – Report actual hours worked.
Pay in lieu of notice – Report the hours that would have been worked.
Severance pay, bonuses, tips and gratuities – Report zero (0) hours.
You’ll notice that sick time hours are not listed as reportable. According to WAC code 192-310-040, any hours paid for sick time do not need to be reported, as long as they are paid under a qualified plan. A qualified plan is a plan that covers everyone and all employees have access to – in an employee handbook or posted visibly for everyone to see.
As of January 1, 2018, all WA employers are required to offer paid sick leave to their employees and to notify them in writing that the sick time is available to them. If you are abiding by these state requirements, you are paying sick leave under a qualified plan and do not need to report sick wages for unemployment taxes. For more information, or to be sure your plan meets the requirements, contact ESD’s employer registration line at 855-829-8243.