Hiring employees | Washington Department of Revenue

You must have a registered business in order to hire employees in Washington state.

Businesses and domestic (household) employers must establish employer accounts to report employee hours and wages. To establish or reopen employer accounts, you must file a Business License Application with Business Licensing Service (BLS).

If you know you will be hiring employees at the time of application, including minors and domestic (household), select the “Hire Employees” or “Hire Employees under 18” for the purpose of the application.

Types of employees

An employee is someone subject to your control. Control exists when the employer determines the employees’ work schedule, hours, and job responsibilities. Types of employees:

Adults: No special restrictions.
Minors under 18: Apply for a permit to employ minors when you submit the Business License Application.
Minors under 16: Contact the Department of Labor & Industries for additional requirements.
Employees working in Washington for an out-of-state business with no Washington location.
Domestic (household) employees that work in or around your home. Instructions on how to file an application for domestic (household) employees is found under Hire domestic (household) employees.
Temporary workers.
Emergency workers.

Independent contractors are not considered employees. They:

Engage in their own independent occupation or business.
Are registered or licensed with the appropriate state and federal agencies.
Usually advertise their services and have a significant investment in their business.
Keep business records and file taxes as a business.

Employer requirements

In-state business/employer

File your Business License Application for hiring employees, no sooner than 90 days before you plan to hire.

By submitting the application, your business will be registered for Workers’ Compensation through the Department of Labor & Industries, and Unemployment Insurance through the Employment Security Department. You will receive account information and directions on how to file quarterly wage/hour reports from each agency individually after registering.
These reports are required quarterly even if you have no active employees or hours to report. Failure to submit your quarterly reports will result in the assessment of penalties and interest.

Report your new hires to the Department of Social and Health Services within 20 days of hire.

If you have already applied to hire employees at a location, you do not need to apply again when you have new hires. Instead, each time you hire an employee, you must report the hiring to the Department of Social and Health Services.

Out-of-state business/employer

File your Business License Application for hiring employees, no sooner than 90 days before you plan to hire.

By submitting the application, your business will be registered for Workers’ Compensation through the Department of Labor & Industries, and Unemployment Insurance through the Employment Security Department. You will receive account information and directions on how to file quarterly wage/hour reports from each agency individually after registering.
These reports are required quarterly even if you have no active employees or hours to report. Failure to submit your quarterly reports will result in the assessment of penalties and interest.

Report your new hires to the Department of Social and Health Services within 20 days of hire.

If you have already applied to hire employees at a location, you do not need to apply again when you have new hires. Instead, each time you hire an employee, you must report the hiring to the Department of Social and Health Services.

Domestic (household)

Instructions on how to file an application for domestic (household) employees is found under Hire domestic (household) employees.

Paid Family Medical Leave (PFML)

Paid Family Medical Leave is required for employers, including out-of-state companies that have employees working in the state of Washington. For more information, visit Washington Paid Family and Medical Leave.

When you sign-up with Paid Family Medical Leave you are required to submit a copy of your Business License Application.

Frequently asked questions

Do I need to apply for employees under each location?

Yes, you need employee accounts with LNI and ESD for each location that has employees.

What is my State Unemployment Insurance (SUI) number?

The Employment Security Department (ESD) administers the Unemployment Insurance program and can provide you with assistance or account numbers. Contact ESD directly at 1-855-829-9243.

What is the tax rate for Employment Security Department (ESD) and Labor and Industries (L&I)?

For more information on how to determine your ESD and L&I tax rates, visit ESD's Determining your tax rate and L&I's Calculating premium rates.

What is the Worker Compensation account ID number? When will I receive Worker Compensation information?

The Department of Labor and Industries (L&I) will contact you once they receive your application, usually within one week of the Department of Revenue (DOR) processing the application, to set-up your Worker Compensation Account. For more information, visit L&I’s How to get a Workers Compensation Account.

When will I receive my Participant Activation Code (PAC)?

The Department of Labor and Industries (L&I) issue Participant Activation Codes (PAC). For more information, contact L&I directly at 360-902-4817.

What steps do I need to take if I no longer have employees working in Washington state?

Visit Close my account for instructions and information on how to close your account.

I am a temporary employee, do I need to do anything?

Independent Contractors (1099):
Independent Contractors are not employees of a business and are paid under the Federal 1099 classification. They may be required to register with DOR to obtain a Unified Business Identifier (UBI) number. If you are required to register as a business, DOR will assign a filing frequency and you will be required to file and pay tax returns according to that schedule.

Independent Contractors can voluntarily elect to participate in the Unemployment Insurance program by indicating such on the Business License Application.

Permanent employees temporarily in Washington:
Permanent employees of a business located outside Washington state but work temporarily inside Washington state will not have additional reporting or registration requirements with DOR. Washington state does not have a personal income tax and the business is not required to provide copies of the W-2s for income tax purposes. ESD and L&I recommend that employees follow-up with their employer to ensure that the business has registered for both Unemployment Insurance and Worker’s Compensation.

I am an out-of-state business whose payroll is set up in my state, why do I need to apply to hire employees in Washington?

Unemployment Insurance and Worker’s Compensation coverage are required for employees who work inside Washington state. In order for employees to receive these benefits you must be registered with ESD and L&I and pay into these programs. By indicating on the Business License Application that your business will have at least one employee located in Washington state, DOR will notify both L&I and ESD who will then reach out to you directly regarding next steps in setting up employer accounts with them.

Out-of-state businesses that have an employee located in Washington state will trigger physical nexus for the business that may result in the business incurring a business tax-reporting obligation.