June 15, 2021
In 2020, the state average annual wage was $76,741—an increase of 10.1% over 2019. According to the Employment Security Department (ESD), this is the largest annual percentage growth to the average wage ever.
The higher than normal increase in reported average wages can be attributed to the fact that thousands of lower-paid workers lost their jobs during the pandemic and higher-paid workers remained employed. While it is common for the average wage to rise during recessions, since lower wage workers are more likely to be laid off than higher paid ones, the shift during the pandemic recession was much more dramatic than during the Great Recession.
Unemployment insurance (UI) taxes and benefits, paid family and medical leave benefits, and workers’ compensation benefits are all calculated based on the state average wage.
So, the UI taxable wage base in CY 2022 will increase to $62,500 (it is currently $56,500). This means that employers will pay UI taxes on the first $62,500 paid to an employee. Washington’s taxable wage base is already the highest in the country. The next highest is Hawaii’s $47,400.
Additionally, for new UI claims opened beginning July 4, the minimum weekly benefit will increase to $295 and the maximum weekly benefit will increase to $929.
ESD didn’t announce the maximum weekly benefit for paid family and medical leave, but based on the statute, it will increase on Jan. 1 from $1,206 to $1,328.
The Department of Labor and Industries has not yet announced how the increase to the state average wage will affect workers’ compensation time-loss and pension benefit amounts.Categories: Economy , Employment Policy.