The Washington State Senate on Tuesday unanimously passed Senate Bill 6524, which would ease the penalty for businesses that fail to pay their unemployment insurance tax in a timely manner. The bill’s sponsor, Sen. Curtis King, R-Yakima, said reducing that burden will help small businesses that are struggling to survive.

“Businesses that are delinquent in their UI payments are charged a penalty which is currently two-tenths of 1 percent above the highest rate on the scale, which is 5.4 percent,” King said. “Even if your rate is the lowest on the 40-point scale, one delinquency will jack your rate up to 5.6 percent as a penalty. That’s counterproductive to encouraging the growth of businesses in Washington. My bill decreases that penalty to 1 percent over whatever rate the business is currently paying.”

SB 6524 would also allow business owners who enter into an approved agency-deferred payment contract within 30 days of notification of delinquency to deduct one-half of 1 percent from the delinquent tax rate.

“This kind of thing happens in the private sector with individuals all the time,” King said. “If people can’t pay their bills but join a consumer credit counseling service, often their payments are reduced significantly because they’re showing the collecting agency that they are willing to make arrangements. My bill would afford that same ability to business owners who pay unemployment insurance tax.”

“Lots of businesses are struggling right now,” King continued. “In fact, one of the businesses in my district fell behind on its payments last year for the first time in its decades-long history of operation. It set up a payment plan with Employment Security Department but had to suffer the penalty for a one-time infraction. If this bill becomes law, the system would become more fair and equitable for businesses that may just be suffering a temporary setback.”

SB 6524 will have a public hearing in the House Commerce and Labor Committee on Feb. 23.