Companies covered by the Washington unemployment compensation system that want to exempt corporate officers from unemployment coverage must mail the required exemption forms to the Washington State Employment Security Department (ESD) by Jan. 15, 2009. (Please see our September 2007 advisory bulletin, “Unemployment Law Revisions Set Forth New Employer Requirements,” which summarizes changes to the state's unemployment compensation laws and provides some history behind the changes.)

While previously the default was that corporate officers were generally not covered by unemployment, the new default is that they are automatically covered (and unemployment contributions must be made on their earnings) unless they meet certain criteria and are specifically exempted by the corporation. The exemption has to be on an ESD form and must be postmarked or faxed by Jan. 15, 2009, to be effective. If it is not, the exemption would not be effective until Jan. 1, 2010. Separate requests must be submitted for each officer. The exemption requirements vary with different types of corporations.

Note, also, that any request for exemption of corporate officers from the unemployment system must also match the registration information which is on file with the ESD relating to such corporate officers. That information may need to be updated (there is a separate form for that purpose).

Here are links to helpful information on the Washington Employment Security Department Web site:

  • Cover letter about exempting corporate officers

  • Process and forms for exempting corporate officers
    (This initial Web link walks you through the process with links to the relevant forms, since the exemption eligibility depends on the type of corporation.)

  • FAQs about exempting corporate officers
    (This link includes some Q&As with information about calculating the effect of exemption on unemployment taxes.)

  • Eligibility for unemployment benefits of corporate officers